Corporate Governance: Part II
Now, as a result of a few bad apples, many CEOs and directors find their professional reputations tarnished by doubt, despite the fact that most of them are honest, hardworking souls who abide by the rules of business. In this climate of skepticism, corporate accountability and executive trustworthiness have taken on a whole new dimension.
In this Antiphony Insights, James D. Robinson III, Co-Founder and General Partner of RRE Ventures, former Chairman and Chief Executive Officer of the American Express Company, and an experienced Director for several corporations, shares his thoughts on some of the steps business leaders must take to help restore confidence in their business results and help reinvigorate the overall business environment.
As always, we hope you find this information valuable. If you have any thoughts or suggestions, please contact us at insights@antiphony.com.
James D. Robinson III
is Co-Founder and General Partner at RRE Ventures (http://www.rre.com).
He currently serves as a Director of the Bristol-Myers Squibb Company, The
Coca-Cola Company, Novell, Inc. and Pinnacor, Inc. Mr. Robinson serves as
chair of the Executive Committee of First Data Corporation as well as a
member of its board, and as non-executive Chairman of Violy, Byorum &
Partners Holdings. In addition, Mr. Robinson serves on the boards of Apriva,
e-Duction, Inc., eOneGlobal, NetVendor Systems, Inc., Qpass, and Returns
OnLine, Inc. - all private companies.
Restoring Faith in Our Business Leaders
The recent slew of corporate governance scandals has resulted in a complete loss of trust and respect for CEOs and their businesses. That’s the perception we face today, despite the fact that most CEOs are honest and their Boards try to do the right thing.
Our system has been put at serious risk by some rogue CEOs, their senior associates and even some directors.
Ours is the best system in the world, by far the best system for mobilizing capital to finance investment, support innovation, allow risk-taking and create jobs. Corporate scandal stupidity has put this at risk. It affects all of us and we are paying a heavy price.
Here’s what must be done –
Board duty will grow in scope and diligence. It will include greater assessment of risk, strategy and ethical issues - so much more than just financials. Boards must adopt a culture and style to operate constructively, openly and effectively with the CEO and management. By becoming more engaged, boards, in fact, can become a competitive advantage.
It’s very important that boards remember their ultimate goal is to do the best job they can (individually and collectively) to help the CEO build the best damn company that can be built. Their mission is not to be jail keepers. Directors must be very careful not to so traumatize management that the company stops taking legitimate risks.
We’ll see tougher compensation practices. Yes, the day of the mega option party is over… and should be, because it went way beyond sensible boundaries. Options will be expensed; although, we have yet to see a standard valuation practice emerge.
But if we are to reestablish the trust and confidence our economic system warrants, there must be accountability and it must be with the greatest transparency possible.
It’s up to each of us to support that cure by insisting on the right set of values in our companies – values that embrace trust and confidence. Values that deliver fairness and credibility. Laws alone will not get the job done.
Plato said a few years back,
Good people do not need laws to tell them how to act responsibly, while bad people will find a way around the laws.
Your companies, whether large or small, through your leadership and values, represent the DNA that’s needed to restore our economic system to its rightful position of greatness. We need each other. Let’s just do it.
Corporate Values
Jeffrey
Babin, Antiphony
(jbabin@antiphony.com)
Ask 10 customers, investors, business partners, and employees what your
company stands for.
How many different answers will you get?
Corporate values create the foundation upon which you build an organization.
Every aspect of business should reflect a core sense of why and how you
conduct business.
This goes well beyond the laminated placards and wallet cards that espouse
values and are distributed to employees.
Respond to the increased public attention on corporate conduct and policy:
- Review your company's values.
- Develop a clear, concise statement.
- Assess how your business reflects your values.
- Communicate and live by them.
Contact us today at
insights@antiphony.com to learn more about our Corporate Governance
programs.
Execution: The Discipline of Getting
Things Done
Larry Bossidy, Ram Charan (ISBN: 0609610570)
As the marketplace increases focus on business basics, execution
is one of the concepts that companies should adopt as religion. This practical
guide explores the concept, the practice, and the tremendous impact execution
can have on a company's success.
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