The news that FMC Corp. was joining the S&P 500 stock index this month brought to mind a former chairman and CEO of FMC who wrote one of the hardest-hitting articles on director responsibilities that I have published as editor of Directors & Boards.
Robert Malott (pictured) was his name, and we titled his article — to perfectly reflect the no-nonsense nature of his commentary — "Directors: Step Up to Your Responsibilities."
Malott joined FMC, which we described in the article as one of the world's leading producers of chemicals and machinery, in 1952. He was elected CEO in 1972 and chairman of the board in 1973. He retired in 1991, but stayed on the FMC board as chairman of the executive committee and also was serving on the boards of Amoco Corp. and United Technologies Corp. when we were working together in 1992 to publish his article.
How about these four pointers of Bob's for showing what it means to step up to your responsibilities:
• "If a CEO wants strong board members, he will get them."
• "If a CEO wants the board involved, it will be."
• "If the CEO feels the board role includes tough-minded evaluation of his own performance, the board will oblige."
• "And if the board chooses, evaluates, and rewards a CEO on the basis of shareholder value, the directors will get a CEO who puts shareholder value first."
Beautiful stuff. And Bob also tells in his article a candid story about how he came to lead FMC:
"I was invited to become FMC Corp.'s chief executive office in a very civilized manner. The chairman of the board's search committee invited me to dinner in San Francisco, and over drinks broke the news. I was the board's choice for the top job.
"My response rather startled the director. Instead of the usual, 'I am honored by the board''s confidence in me, etc.' I replied flatly, 'How do you know that I'm the man you want?'
"No board member had asked me what I stood for, or what I would do as CEO. As it happened, I had a number of plans, most of which represented a significant break with the status quo. The directors needed to know about those plans. They needed to accept them. They needed to give me the authority to move forward decisively, without being routinely second-guessed. And they needed to hold me accountable for achieving what would now be mutually agreed-upon goals."
Something makes me think that the board never regretted its choice, however naively made, of Bob Malott as FMC's CEO. As the company steps up to inclusion in the S&P 500, let's give a nod to its past leader who not only stepped up the company's governance but, even more, stepped up Corporate America's governance thinking and practices.