Changes to corporate governance requirements and strategies are coming from higher stakeholder engagement, an increased risk environment, and regulatory requirements: What do the board of directors from leading companies think? n the summer of 2013, 934 public company directors responded to our 2013 Annual Corporate Directors Survey. The focus of this year’s research not only reflects in-depth analysis of contemporary governance trends, but also emphasizes how boards are reacting to a rapidly evolving landscape.
Rumors and speculation abound when it comes to discussions about CEO succession at high-profile companies such as Ford, Proctor & Gamble, and Cisco Systems. “That’s because succession planning processes are not transparent and may be less systematic than you would expect,” says Stanford Graduate School of Business faculty member David Larcker, who codirected this new study about CEO succession by The Rock Center for Corporate Governance at Stanford University and The Institute of Executive Development (IED).
The study is based on in-depth interviews with executives and directors at 20 companies regarding their succession and executive development practices. The researchers found that only 46% of respondents have a formal process for developing successor candidates for key executive positions. What’s more, only 25% of respondents agreed that there was an adequate pool of ready successor candidates for the CEO position at their companies.
It is vital that the distinction between practice and decision standards be as clear in the world of human capital as it is in the world of finance and accounting.
Like GAAP standards, emerging HR standards should describe typical practices or measurements that are “feasible at scale” for most organizations. As more organizations adopt them, we will see more common approaches to measuring things like employee turnover and cost-per-hire, and the resulting data will be more easily compared and analyzed. As research uncovers links with organizational performance, we may in the future see a better case for a set of decision standards that can justifiably be connected to organizational performance. Practice standards are a prerequisite to decision standards in HR, just as they were in finance and accounting.
It didn’t garner much attention, but earlier this month, the chairman of a Fortune 500 company was kicked out of his job, and it wasn’t by management. Shareholders voted out Ray Irani, the chairman and former CEO of Occidental Petroleum, at the company’s annual meeting, with 76 percent of investors denying Irani the post. Irani had planned to retire in 2014, but criticism of his outsized compensation package—he averaged over $80 million in annual salary over the past decade—and questions about his using the board to attempt to replace his successor, CEO Stephen Chazen, led to an early demise.
In the past, the corporate governance discourse pertaining to Indian companies has revolved substantially around family owned businesses and government-owned (public sector) companies. Another type of companies that ...
ENTREPRISE - Sur presque tous les critères de performance des conseils d'administration, la France progresse et reflète la révolution qui est en train de faire changer la gouvernance des entreprises dans le monde entier.
This article focuses on two key aspects of the relationship between risk and strategy: (1) understanding the organization’s strategic risks and the related risk management processes, and (2) understanding how risk is considered and embedded in the organization’s strategy setting and performance measurement processes
Abstract: Directors from academia served on the boards of more than one third of S&P 1,500 firms over the 1998-2006 period. This paper investigates the effects of academic directors on corporate governance and firm performance. We find that companies with directors from academia are associated with higher performance. In addition, we find that professors without administrative jobs drive the positive relation between academic directors and firm performance. We also show that professors’ educational backgrounds affect the identified relationship. For example, academic directors with business-related degrees have the most positive impacts on firm performance among all the academic fields considered in our regressions. Furthermore, we show that academic directors play an important governance role through their monitoring and advising functions. Specifically, we find that the presence of academic directors is associated with higher acquisition performance, higher number of patents, higher stock price informativeness, lower discretionary accruals, lower CEO compensation, and higher CEO turnover-performance sensitivity. Overall, our results provide supportive evidence that academic directors are effective monitors and valuable advisors, and that firms benefit from academic directors.
The authors: "Our paper is the first to focus entirely on the impact of academic directors on corporate governance and firm performance. Our analysis extends the literature on board characteristics and firm performance. We find that directors from academia are beneficial to shareholders. Our results indicate that both directors' monitoring and advising functions are important for board efficacy and firm performance. Furthermore, our study complements the board-independence literature by showing that independence is not enough to enhance board efficacy. Additional director attributes, such as advising abilities, could be important for making outside directors more beneficial to firm value. Therefore, this paper furthers our understanding on the relation between board independence and firm value. "
Professors in the Boardroom and their Impact on Corporate Governance and Firm Performance
Bill Francis Rensselaer Polytechnic Institute (RPI) - Lally School of Management & Technology
Iftekhar Hasan Bank of Finland
Qiang Wu Rensselaer Polytechnic Institute (RPI) - Lally School of Management and Technology
Competitive Intelligence (CI) should provide management at all levels with early warnings of changes in the competitive landscape, including opportunity signals. It is a crucial part of corporate management in the modern and fast changing economy. By analyzing other actors (customers and competitors as well as regulators) moves, CI allows companies to anticipate market development and act in accordance, before the competition does. Below are 10 deliverables I think a competent CI program should be able to deliver:
Scrutiny over executive compensation and governance is crowding out board focus on critical talent issues that impact corporate performance. As a result, most boards lack a deep understanding of talent issues outside executive leadership (executive compensation, CEO succession, and CEO performance). The best boards seek more understanding of talent issues and higher levels of assurance about critical talent risks.
CEB research finds that boards at top-performing companies are twice as likely to have a deep understanding of talent issues as boards at lower-performing competitors. CEB’s benchmark shows the best boards improve talent assurance in two ways. First, they expand the perimeter of talent issues they monitor beyond executive leadership to include issues that impact other critical talent segments, such as engagement capital, the employee value proposition, and workforce planning. The best boards also reshape and deepen conversations on executive performance evaluation and succession in the following ways:
• CEO and Executive Performance Evaluation—Treat talent measurement like financial measurement: require robust analytics and clear links to business value. - Instead of “ready-now” successors, evaluate leadership potential, benchmark with competitors’, and differentiate leaders who are “developable” from those unlikely to change. -In addition to business performance, reward improvements to engagement capital, particularly future-oriented workforce engagement. -Instead of tracking compliance violations, hold CEOs accountable for boosting integrity capital by building a culture of integrity.
• CEO Succession Planning—Readiness is a red herring. Don’t try to predict the competencies a leader will need when succession is triggered or assume the competencies are the same as the ones your leaders have now. Increase optionality by asking the CEO to broaden the experience profiles of direct reports and rising leaders.
At many companies, the whole organization is becoming more responsible for customer engagement. A few are extending this thinking to the boardroom. A McKinsey Quarterly Governance article.
Three tips for improving engagement
First, much as most boards now include a strategy day in their calendar of meetings, we think it’s worth considering a customer-engagement day to take stock of the broadest strategic implications of changes in the marketing environment and of the company’s position with customers. On such a day, the directors of another Asia-based services company took decisive action to rethink its premium-pricing strategy after coming to grips with big changes under way in the customer base.
Second, it’s important to be mindful of the board’s composition, given the fast-changing nature of marketing. For example, including more board members with public-sector experience—including political-campaign skills—can provide valuable counsel to today’s ever-more-exposed CEOs.
Third, it’s important to keep board involvement strategic in nature and clearly aimed at governance issues and not the day-to-day management of marketing activities. To be sure, it can be valuable for board members with specialized expertise to provide it fairly regularly; we know of one company that’s asked an innovation guru on the board to work closely, between meetings, with the head of R&D. Yet any such involvement must ultimately connect back to the board; otherwise, there’s a risk of creating a cadre of shadow managers. In this case, the R&D director and board member jointly update the board on innovation efforts to ensure that it remains plugged in.
The Other Duty of Corporate Governance Forbes According to BusinessDictionary.com, corporate governance is “The Framework of rules and practices by which a board of directors ensures accountability, fairness, and transparency in a company's...
It’s time to transform corporate governance. Innovation and technology can simplify and improve board development and management.
Virtually every aspect of corporate America has been affected by the adoption of new technology. Social networks and collaboration technologies are revolutionizing and changing the way companies are run, products are made, information is shared and the way employees are recruited.
There is one aspect of nonprofit, private and public companies, however, that has made little or no progress when it comes to innovation — the way corporate boards are recruited and managed.
Corporate America is fully aware that this process is flawed. Most recently, headlines from scandals that have occurred at Best Buy, Chesapeake Energy, Groupon, Wal-Mart and Yahoo have put the spotlight on corporate governance. Besides a general disdain for illegal and deplorable actions, corporate boards have suddenly felt the pressure to fortify their teams with the same virtues they always strived for, with an increased emphasis on personal and professional integrity....
[Maybe a helpful tool, but let's not overstate things ~ Jeff]
The European Corporate Governance Institute is a pan-European not-for-profit organisation established to improve corporate governance through fostering independent scientific research and related activities.
Economic TimesCorporate governance can't flourish when nation's systems of governance faltersEconomic TimesOne of the key issues that affect the conduct of business in India and its related governance is the dominance of the owner, who uses his...
Sharing your scoops to your social media accounts is a must to distribute your curated content. Not only will it drive traffic and leads through your content, but it will help show your expertise with your followers.
How to integrate my topics' content to my website?
Integrating your curated content to your website or blog will allow you to increase your website visitors’ engagement, boost SEO and acquire new visitors. By redirecting your social media traffic to your website, Scoop.it will also help you generate more qualified traffic and leads from your curation work.
Distributing your curated content through a newsletter is a great way to nurture and engage your email subscribers will developing your traffic and visibility.
Creating engaging newsletters with your curated content is really easy.