Who Speaks for the Board?

In the news coverage of the tumult at AIG, one particular Wall Street Journal article caught my attention — and not in a good way. Last November the WSJ reported that new CEO Robert Benmosche was threatening to quit, and that the AIG board was scrambling to salvage the situation. Pretty momentous developments, considering the still precarious state not only of AIG but of the broader financial community and markets.

Asked by the reporters about what was happening at the board level, this is what ended up in the article: "A spokesman for the giant insurer said the company doesn't comment on board activities."

Well, okay.

Then, next question: Who does speak for the board?

Unfortunately, no one seems to. Many if not most boards simply have no voice of their own.

That has been the longstanding tradition — that the corporation speaks with one voice, that of management's.

Is this a good thing anymore? Is this responsible behavior for boards in today's environment of fuller transparency and disclosure — to have no voice of their own? And, if they were to decide to find their voice, whose voice should it be? And how should it be expressed? Should a board have its own PR representation, just as many are now doing in hiring their own independent compensation advisers? Are we headed down that path?

All good questions, I think. And I am on a search for some answers. Stay tuned. I am going to ask some smart people — in governance, the investor community, and corporate communications — to help me with some answers. I will be making this a major feature article in the Second Quarter edition of Directors & Boards.

It should be a good one — one that advances leadership thinking in what are, or should be, "new normal" best board practices.

ROI: Return on Insight

Last week I met a fellow who championed the use of ROI. No, not return on investment. His ROI metric is one that his firm uses in its consulting work with clients — return on insight. He explained how his firm delivers what all consulting firms should deliver: value-generating insights to its clients. I had never heard that usage of ROI before.

Value-generating insights. That's what this blog, "Boards At Their Best," endeavors to deliver. Today marks its first anniversary.

I started this blog as an academic exercise. A year ago I was teaching a course in "Fundamentals of Public Relations Writing" at Temple University, my alma mater. For a final paper, I intended to give the class the assignment to start a blog. If I wanted each of them to become bloggers so as to be adept at this important capability for a PR practitioner, I figured I better become a blogger myself to test the doability of the assignment. If I could create a blog, then anyone could do it, certainly twentysomethings with a lot higher comfort level with technology and social media.

The title of the blog was chosen with care, as was the subtitle: "Insights on Leadership and Corporate Governance." I try to make sure each posting has a nugget of distinctive advice or perspective that you won't find in the mainstream media or elsewhere in the blogosphere. That's why I like that ROI metric — return on insight. I invite and encourage you to return here often over the next 12 months of postings to see how you would score its ROI.

'Get Me on the Cover of Business Week'

This was tough news to wake up to on this Monday morning — Bloomberg reporting that McGraw-Hill is looking to dispose of Business Week magazine. This is another gut punch for those of us in the media business.

Depending on what happens with this disposal, I may have to dispose of a reading I use in my "Fundamentals of Public Relations Writing" class at Temple University.

I teach the students, all budding PR practitioners, a concept of my own formulation that I term the "high hurdle" — which means that if they want to show leadership ability, they must find out what publication their company or client's CEO most desires to be prominently featured in and then pull out all the stops to get their CEO into it. (It needn't necessarily be a publication — it could be a TV show, like CNBC's "Squawk Box" or "The Today Show" or "Oprah," or it might be a high-profile speaking slot, perhaps to the Council on Foreign Relations or the Economics Club of New York or a trade industry keynoter.)

I share with the students a compelling example of the "high hurdle" that comes from the book, Confessions of a PR Man (New American Library, 1988), written by Robert Wood, president of Carl Byoir back in the days when it was one of the PR industry's venerable firms. Listen in on the exchange between Wood and his client Burt Sack, the PR director for Howard Johnson & Co., which took place when the two were reviewing the HoJo PR strategy in the 1960s.

Wood writes: "Burt leaned back in his chair. 'There's one objective that towers over all the others,' he said. 'It's this — Mr. Johnson wants to be on the cover of Business Week.' He was referring to Howard B. Johnson, the founder's son and now the CEO.

"I laughed. 'The cover of Business Week? That's a lot easier said than done.'

" 'Don't laugh, Bob. This is serious. He really wants it.'

"I shrugged. 'Okay, we'll do our best. It isn't impossible. We have had clients on the cover before. But it doesn't happen every week, Burt.'

" 'I know that. But I've got to warn you. No matter what else you do for us, Mr. Johnson will never be completely satisfied until he sees that cover.' "

Thus begins my class's case study of meeting the "high hurdle" and making a client happy. For the record, Bob Wood exercised highest-order media relations skills and got Howard Johnson its cover story.

For most of my three-decade career as a business writer and editor, the cover of Business Week was a plum placement. My lesson in leadership will still be taught to the incoming generation of PR execs, but I'll maybe be retiring this reading now that Business Week is falling down the rabbit hole.

There is an addendum to this case study: The HoJo PR director raises his glass in a post-cover celebratory toast and says to Bob Wood, in all seriousness, "Well, here's to the Time cover we're looking for next." Time cover? Hoo boy. I say no more.

Boards: Down Those Jets, Up That PR

I've asked the question privately to myself, and now I'm going public with it: How is it that the Citigroup directors are still warming their boardroom seats? 

Maureen Dowd's recent column on the "Citiboobs" was the tipping point for me. After reading it, see if you don't agree that this question cries out for an answer after all that the shareholders, the financial markets, and the taxpayers have been through with this lumbering carcass of a bank. Such outcries will come, I'm sure, at the annual meeting this spring.

It appears that not only is there a lack of financial savvy on this board to have kept Citigroup from virtual insolvency, but the corporate jet fiasco indicates there is not a lick of PR sensibility either. (Jet illustration by Jean Kristie.)

I teach PR as an adjunct instructor at Temple University, so I am doubly tuned-in to stinks like this. In fact, one of the early articles I published after becoming editor of Directors & Boards was a 1982 piece I titled "The Missing Director," which argued that boards need a greater PR awareness of their actions and thus more boards should have PR executives on them. "There would be fewer unpleasant surprises in terms of hostile public reaction to corporate moves because the communicators were in at the beginning," stated the author, Gerald Voros, who was then president and COO of Ketchum Communications.

The argument still holds, more than ever in today's crisis environment. Directors can't count on the accomplished executives sitting around the table with them to be PR smart. They should be somewhat PR savvy if they've gotten to this point in their careers. But boards so often exist in a cloistered chamber that seems to make them tone deaf to public perception and reaction. Combine that with the natural reluctance to push back against management and you've got a combustible mix that's perfect for uncorking PR disasters.

With the board on the line the way it is these days, here are two suggestions: recruit a top PR exec for your next board opening; or, failing that, the board should start getting more face time with the organization's top PR counselor. Maybe that person needs to start sitting in on board meetings. The Citiboobs could have used such an extra set of eyes and ears in the boardroom to shoot down the TARP jet and warn of other miscues from years of questionable oversight.