Tuesday, September 14, 2010

All Directors Are Not Equal

Good things happen again for a past Directors & Boards author. Our congratulations to Dr. Curtis Crawford (pictured) on being selected to receive a special award at next month's annual conference of the National Association of Corporate Directors. He is being honored with the B. Kenneth West Lifetime Achievement Award. This award, named for an esteemed former NACD chairman, recognizes individuals who have been instrumental in bringing management, boards, and investors together to find common ground on issues of transparency, director independence, and corporate responsibility.

In his article for Directors & Boards, which appeared in our First Quarter 2008 edition, Dr. Crawford put the fork into the notion that all directors are equal. Here is a taste of his disagreement with that "polite fiction":

"Corporate directors are chosen from a pool of highly qualified people, and being selected as a shareholder representative is a very significant achievement that demonstrates that the director has cleared a high hurdle of competence. However, it is naive to assume that all directors are equally capable in every respect.

"While traditional boards might find it useful to maintain this polite fiction, all directors and boards are not equal. Maintaining this position is an excellent way to enforce a status quo that limits the board's performance.

"Although all directors are high achievers with equal legal responsibilities to serve, exercise duty of care, and act in good faith, they differ substantially in the kinds of value they can contribute to the board. Each director embodies differences in experience, background, interests, and tenure, which is desirable, considering that multiple talents are necessary for the board to execute its responsibility effectively."

That wasn't the only notion he pooh-poohed in his article. He also had the temerity to argue that "even CEOs who are generally great leaders do not necessarily make the best directors."

Dr. Crawford comes to his conclusions from having been in a lot of boardrooms and seen a lot of directors in action. He is president and CEO of XCEO Inc., a consulting firm that provides governance support to corporate boards. A couple of the boards he currently serves on are DuPont Co. and ITT Corp. He has held positions with such companies as IBM, AT&T, and Lucent Technologies, and is the author of two books on leadership and governance. Additional passages from his article can be found in this adaptation that ran in the September e-Briefing.

I wonder what other notions he may challenge when he takes to the stage of the JW Marriott Hotel in Washington, D.C., on Monday evening, Oct. 18, to receive his award. I hope to be a friendly face in the audience for this past author, and will report back on this blog.