A Hot Trend

It's not often a quarterly journal like Directors & Boards can beat the Wall Street Journal in getting a story into circulation. It's fun when it happens.

We experienced that this month when our current edition featured a major article on a trend we think is about to explode: how HR officers will become much closer and more valued counselors for the board — a trend that will include chief human resource officers (CHROs) becoming desirable board candidates. We titled it "A Strengthening Nexus: Boards and the CHRO." That issue hit the street Dec. 4. On Dec. 14 the WSJ reported that "HR Executives Suddenly Get Hot," with the article subhead adding "Profession Is in Demand for Board Seats as Firms Seek Guidance on Pay Deals."

I like this as a compelling example of the serendipity of good ideas being explored by multiple sources at the same time . . . as well as affirmation of our respective trend identification.

Kathy Herbert (pictured) is what I termed in the Directors & Boards article a preeminent example of the HR expert who has been recruited as an outside director. She is the former EVP of human resources of Albertson's Inc. who is serving on the board of Covidien PLC, the Tyco Healthcare Group unit that was spun off to Tyco International's shareholders in 2007, at which time she joined the board. She authored for us a Top 10 list of "What the Board Needs from the HR Chief." This is a primer for board members who want better advice on which to make key human capital, compensation, and succession and management development decisions — as well as a primer for HR officers on how to become a trusted adviser to the board. Her views were supplemented by two top HR officers, Angela Lalor of 3M Co. and Ian Ziskin of Northrop Grumman Corp., who discussed the impact that progressive HR practices can have on the governance of public companies today.

I have some skin in this trend. I've published pieces on the HR-Board relationship that date back a decade and more, so I've been an early advocate for the strengthened nexus. And now I have been invited to participate in the meetings coming up in 2010 of the CHRO Board Academy. Formed by Dennis Carey, senior client partner of Korn/Ferry International, the CHRO Board Academy is an organization that specializes in preparing HR executives to work with their boards as well as to serve on outside boards. The above-mentioned Ian Ziskin along with Daniel J. Phelan, chief of staff for GlaxoSmithKline, are co-chairs of the CHRO Board Academy.

I look forward to bringing to the readers of Directors & Boards more thought leadership on how HR executives not only have gotten hot but stay hot in the bubbling cauldron that corporate governance likely will be in 2010 and beyond.

Photo of Kathy Herbert by Kathy Richland ©2009

CEOs Have First 100 Days, Too

All the focus this week on President Obama marking his first 100 days in office should call to attention that this period of time is crucial in the life of every new CEO.

I went back into the Directors & Boards archives to dig out "The CEO's First 100 Days," an article I published in 2002 by two longtime and respected CEO recruiters, Dennis Carey and Dayton Ogden. Their prime thesis: If a new CEO is to succeed, the most important thing he or she can do is to move quickly to put their own team in place.

"Personnel is policy, goes a favorite Washington saying," the authors write. "It is no less true in the private sector. Indeed, the reason so many companies falter after a new leader takes charge is usually due neither to flawed management nor leadership style but rather the inability or failure of a CEO to assemble his own senior team that can enthusiastically implement a new strategic direction."

Here are two specific tactics they offer:

• Look Right Away for the Stars: "New CEOs ought to spend less time on grand planning and more time on determining whether top managers fit their vision. With this knowledge, the CEO can weed out the disloyal, push aside the deadwood, and pass over ineffective veteran managers to elevate star players several rungs below," Carey and Ogden write. The board should encourage the new CEO to conduct what the authors call an "independent human capital audit" to better learn about the talent he has and facilitate the selection of a new team.

• Do a Board Reassessment: "The fact that a new CEO inherits a board someone else appointed doesn't make change any easier," the authors acknowledge. They recommend that a leadership change is a good time for the board to do its own internal assessment — a process that would "encourage some of their members to step down and make room for new blood." This is a "delicate matter," they recognize, but nonetheless the board, with the best interests of the corporation in mind, ought to create an opportunity for the new CEO "to select some of his most trusted advisers as directors."

"The 'first hundred days' is a yardstick usually reserved for a new President in the White House," Carey and Ogden observed in their article seven years ago. "But it is exactly the type of timetable more CEOs need to follow."