Friday, February 27, 2009

Boris Yavitz, 1923-2009: A Board Flashback

Boris Yavitz, a former dean of the Columbia Business School, died on Feb. 14 at the age of 85.

His New York Times obit doesn't mention it, but he was a big-time corporate director in addition to having a distinguished academic career. His directorships included J.C. Penney Co., Sterling Drug Inc., Barnes Group Inc., St. Regis Corp., Crane Co., and Medusa Corp. The Times does mention his service as a director and deputy chairman of the Federal Reserve Bank of New York.

We had the pleasure of Bob Yavitz's company at a roundtable that Directors & Boards held in 2000 (where he was photographed above). A major topic was the change in behavior of boards over the years. Here is a singular observation that he made:

"What I saw in the very early years of my service, which goes back to about 1975 ... [is that] most boards were not much more than rubber stamps. The CEO said 'Jump' and directors were allowed just one question: 'How high?' It wasn't a matter of not arguing with the boss — you typically didn't even question him."

Yavitz lived long enough to see a behavioral change. "There is a very different flavor now in most boards," he added. "It is getting much harder to find the bad guys because there has been a vast improvement. More and more companies are doing the right thing in terms of board composition, the number of outsiders, avoiding beholden directors, evaluating the CEO, and so on. We've come to a point where most boards are independent enough and concerned enough that I don't see us going back to the bad old days."

When we hosted him at our roundtable, Yavitz was a corporate governance consultant. He was a forceful presence in our group discussion, as I imagine he was in front of the classroom or in running a faculty meeting or chiming in at a board meeting. He may have jumped a bit in his younger days on boards, but I can't imagine that before too long he helped bring to the boardroom the progressive changes that characterize present-day boards.

I'm sure we all have days when we wonder just how much progress boards have made, especially when we look at boards that have presided over wrecked companies. But then, let's ask ourselves: Are there any CEOs who can still say "Jump" to their boards? Even a better question: Are there any boards that would respond, "How high?" If either question strikes you as even a bit laughable, perhaps that is a testament to the progress of time, the evolution of best practices, and the footprints left behind in boardrooms by a leader like Bob Yavitz.