A Tag Line Retired

"Directors & Boards is to the field of corporate governance what Variety is to show business."

That was the judgment rendered 10 years ago by the New York Stock Exchange's nyse magazine, at that time a well-written and designed publication distributed to the Exchange's member companies. In its Winter 2001 issue, the magazine took a look at what was ahead for corporate boards and turned for insight to Directors & Boards as one of its primary sources.

When the article appeared and we saw what was written about us, our reaction was, "What a wise conclusion this authoritative outsider came to." Of course we used the NYSE's Variety comparison as a tag line in our promotional materials and other outreach to the governance marketplace. Beyond the feel-good nature of this commendation, we did feel they got it right — that we were producing a journal that anyone serving on a board or interested in being a director needed to read, just as anyone working in the entertainment industry needed to be reading Variety.

But that apparently is not the case anymore when it comes to Variety. A recent report in TheWrap, an online Hollywood news service, concludes that Variety has lost its once-dominant position in the entertainment must-read hierarchy: "Beset by aggressive competitors and shackled by a paywall in the age of instantaneous news coverage, Variety has become a shadow of its former self," writes TheWrap's Sharon Waxman.

As someone who first started being an avid Variety reader in my teens, I am saddened that it may be sliding into irrelevance. And I am almost inconsolable that it looks like we must retire what has been a venerable descriptor for Directors & Boards. As I read other coverage coming out of Hollywood that traces the ups and downs of the trade papers, it unfortunately appears that Variety is no longer to the field of show business what Directors & Boards is to corporate governance.

Juanita Kreps: No Napping for Her

I found in my archives a funny story Juanita Kreps told to Forbes magazine in 1976. She was sitting in a corporate board meeting during a complicated financial discussion. An elderly fellow director was beside her, napping peacefully. "Just as the vote was to be taken," she said, "he woke up and proceeded to explain the issue to me!"

Such was life for women on boards in that pioneering decade.

Kreps, who died on July 5, had some notable firsts that she leaves behind as her legacy. She is perhaps most well known for being the first woman to hold the position of U.S. Secretary of Commerce. She was Jimmy Carter's Commerce Secretary from 1977-1979. As the New York Times noted in its obit, not only was she the first woman but also the first economist (she was a professor of economics and vice president of Duke University) to hold this Cabinet post.

When she was appointed in 1972, she was the first female director of the New York Stock Exchange. And when you look at the impressive list of corporate boards that she served on, likely she was the first woman director to be welcomed into certain of these boardrooms: American Telephone & Telegraph Co., Armco Inc., Chrysler Corp., Citicorp, Deere & Co., Eastman Kodak Co., J.C. Penney Co. Inc., RJR Nabisco, UAL Corp., and Zurn Industries.

Another first: When the National Association of Corporate Directors inaugurated its Director of the Year Award in 1987, Juanita Kreps was the chosen one. That was a progressive call on the part of the NACD to institute this award by recognizing a prominent woman in the boardroom.

She seems to have been the right woman at the right time for her government, business, and academic engagements. But more than anything related to gender, as the NACD award attested, she brought "gold standard" thinking into the boardroom. Here is a key observation Forbes reported about her back in the mid-1970s:

• She says she's on the board to make management talk about things they would otherwise overlook. "Our job is not only voting on questions brought before the board," she observes, "but deciding what subjects to insist on discussing." There is just one thing that bothers her: "The trouble isn't whether you have the courage to raise the issues. Where you might fall down in your obligation to stockholders is in not knowing enough about what's going on to make an intelligent decision."

Boards at their best — that was Juanita Kreps.

Leon Panetta, in New Territory Again

A past Directors & Boards author is in the news — Leon Panetta has been named by President-elect Barack Obama to be the next director of the Central Intelligence Agency. Initial reports hint that he may run into some flack in the approval process on Capitol Hill and within the intelligence establishment. Those criticisms, at least in regards to his governing philosophy, may be off the mark. 

A reading of Mr. Panetta's cover piece he authored for the Winter 2003 issue should assuage any doubters as to his intentions to lead an agency that will be run with a responsive notion of accountability and, crucially, one that will earn the public's trust.

He was all about trust six years ago in his article. As a board member of the New York Stock Exchange, he had just served as co-chair of a committee that proposed important new post-Enron standards and changes in the governance of NYSE-listed companies. 

His table-pounding thesis: It's one thing for boards to say that they are exercising proper oversight in the boardroom, but it's something else entirely to prove it ... and boards had better be thinking about how to prove it to restore the public's trust in corporate governance. "This is new territory for boards," he wrote in his article. "It isn't clear how far we will have to go — not to do our jobs well, but to make it apparent that we have done so."

Also this: "Can we end the long tradition of the boardroom as a sealed chamber from which we issue only unanimous endorsements of management's actions and results? Can we move toward more transparency about the boardroom process without undermining the ability of management teams to produce the results that shareholders want?" CIA vetters may want to read that last statement closely. 

Panetta pointed the way to restoring the credibility of a vital institution — the public company board of directors. I'm rooting for him to bring his quest for accountability and trust to the CIA.

Come to think of it, with his board experiences and laser focus on improving corporate governance, why wasn't he the choice for the new head of another three-letter government agency — the SEC? We desperately need a restoration of trust there.