Three Key TSR Incentive Design Considerations

As proxy advisors and shareholders continue to focus on improving the relationship between compensation and shareholder returns, and new pay for performance rules are finalized by the U.S. Securities and Exchange Commission, it is likely that more companies will consider adapting incentives based on Total Shareholder Return (TSR) principles. Ultimately, companies need to balance shareholder value creation with executive motivation and retention when deciding whether a TSR-based incentive plan is appropriate and aligns with the company’s compensation philosophy.

If TSR is utilized in a performance-based award package, companies need to consider the following three factors: whether TSR should be measured on an absolute or relative basis, the appropriate TSR performance hurdle, and whether there will be a cap on payouts based on absolute TSR performance.

1. Absolute versus Relative TSR. Absolute TSR requires the company to set stock price targets that must be achieved to earn a payout. Establishing an absolute stock price level at the beginning of a performance period can be challenging, as a declining stock market could make goal achievement difficult to achieve, while a “buoyant” stock market could make the absolute goal relatively easy to achieve. The challenge with relative TSR is that it requires the company to select a peer group or index that is appropriate for relative TSR performance comparisons. Identifying an appropriate comparator can be particularly challenging for companies in unique markets or industries with just a few competitors.

deloitteblogfigure1A well-designed TSR plan might provide that when a company achieves both low absolute TSR and relative TSR, little to no payouts would be allowed (Figure 1, box C); similarly, when absolute TSR and relative TSR performance are high, payouts would be sizable (Figure 1, box B).

In cases of high absolute TSR with low relative performance (Figure 1, box A), some type of reduction in payouts might be appropriate, as the company underperformed the stock market. Similarly, in cases of low absolute TSR and high relative TSR performance (Figure 1, box D), management could be rewarded for out-performing a down stock market.

Competitive practice, however, does not often combine these two concepts. Most plans are based on relative TSR, with no adjustment for absolute performance. The few companies that set absolute stock price (or TSR) goals do not consider relative performance. A few large companies have introduced payout caps when absolute performance is negative, a concept which is discussed below.

2.TSR Performance Hurdle. If absolute TSR is utilized, a company will need to decide a minimum stock price level that must be achieved to trigger a payout (e.g., the current stock price is $15, and a trigger price of $30 is established before a payout can be earned). Determining an absolute stock price, or TSR hurdle, should stretch the executive’s efforts, but should not be demotivating. That said, the performance of the overall stock market or the stock performance of the company’s industry sector can make the $30 target in the example either impossible or easy to achieve, which may not create the intended incentive.

For relative TSR, the company must decide the minimum level of relative performance compared to a peer group or market index that begins to provide a payout. This approach allows companies to avoid the need to set a specific stock price. However, it is important to remember that a relative TSR goal may not provide the intended motivation, as the goal is not as clear cut as the absolute stock price target (and, presumably, the underlying earnings or cash flow that must be achieved to support the target stock price).

deloitteblogfigure2A typical relative TSR performance curve for a US-based company is illustrated in Figure 2. The threshold level is often the most debated payout level on the performance curve, although competitive market practice suggests the 25th percentile is the most common threshold performance level. By way of contrast, a UK-based company would typically start payouts at 50thpercentile relative performance.

3. TSR Caps. In order to reward both relative and absolute performance, some companies with relative TSR plans have placed a cap on payouts when absolute TSR is negative. These caps often limit payouts to 100% of target despite the company’s ability to outperform in a down market, as shareholders lost value during the performance period.The obvious issue with this approach is the lack of symmetry. Specifically, if the share price increases significantly, but relative TSR is below the threshold level, no payouts will occur. Thus, shareholders will realize a significant increase in stock value and management does not receive a payout (contrast this result with stock options, where management would realize a significant amount of “intrinsic value”). The lack of symmetry and the general belief that out-performance in a down stock market should be rewarded has likely led companies to refrain from imposing caps on payouts.This may change as shareholders and the proxy advisory firms continue to apply pressure on companies to better align pay and performance. In addition, the SEC proposed rules required under Dodd Frank in July 2015 that when finalized will require disclosure of the relationship of pay and TSR (both relative and absolute). This disclosure could impact the design of incentive plans including TSR-based plans to further align realized compensation with shareholder returns (including the use of TSR caps).


Michael Kesner is principal and Jennifer Kwech is senior manager of Deloitte Consulting LLP’s Compensation Strategies Practice.

 

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.
This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation.

Three Key TSR Incentive Design Considerations

As proxy advisors and shareholders continue to focus on improving the relationship between compensation and shareholder returns, and new pay for performance rules are finalized by the U.S. Securities and Exchange Commission, it is likely that more companies will consider adapting incentives based on Total Shareholder Return (TSR) principles. Ultimately, companies need to balance shareholder value creation with executive motivation and retention when deciding whether a TSR-based incentive plan is appropriate and aligns with the company’s compensation philosophy.

If TSR is utilized in a performance-based award package, companies need to consider the following three factors: whether TSR should be measured on an absolute or relative basis, the appropriate TSR performance hurdle, and whether there will be a cap on payouts based on absolute TSR performance.

1. Absolute versus Relative TSR. Absolute TSR requires the company to set stock price targets that must be achieved to earn a payout. Establishing an absolute stock price level at the beginning of a performance period can be challenging, as a declining stock market could make goal achievement difficult to achieve, while a “buoyant” stock market could make the absolute goal relatively easy to achieve. The challenge with relative TSR is that it requires the company to select a peer group or index that is appropriate for relative TSR performance comparisons. Identifying an appropriate comparator can be particularly challenging for companies in unique markets or industries with just a few competitors.

A well-designed TSR plan might provide that when a company achieves both low absolute TSR and relative TSR, little to no payouts would be allowed (Figure 1, box C); similarly, when absolute TSR and relative TSR performance are high, payouts would be sizable (Figure 1, box B).

DeloitteFigure1In cases of high absolute TSR with low relative performance (Figure 1, box A), some type of reduction in payouts might be appropriate, as the company underperformed the stock market. Similarly, in cases of low absolute TSR and high relative TSR performance (Figure 1, box D), management could be rewarded for out-performing a down stock market.

Competitive practice, however, does not often combine these two concepts. Most plans are based on relative TSR, with no adjustment for absolute performance. The few companies that set absolute stock price (or TSR) goals do not consider relative performance. A few large companies have introduced payout caps when absolute performance is negative, a concept which is discussed below.

2.TSR Performance Hurdle. If absolute TSR is utilized, a company will need to decide a minimum stock price level that must be achieved to trigger a payout (e.g., the current stock price is $15, and a trigger price of $30 is established before a payout can be earned). Determining an absolute stock price, or TSR hurdle, should stretch the executive’s efforts, but should not be demotivating. That said, the performance of the overall stock market or the stock performance of the company’s industry sector can make the $30 target in the example either impossible or easy to achieve, which may not create the intended incentive.

For relative TSR, the company must decide the minimum level of relative performance compared to a peer group or market index that begins to provide a payout. This approach allows companies to avoid the need to set a specific stock price. However, it is important to remember that a relative TSR goal may not provide the intended motivation, as the goal is not as clear cut as the absolute stock price target (and, presumably, the underlying earnings or cash flow that must be achieved to support the target stock price).

deloitteblogfigure2A typical relative TSR performance curve for a US-based company is illustrated in Figure 2. The threshold level is often the most debated payout level on the performance curve, although competitive market practice suggests the 25th percentile is the most common threshold performance level. By way of contrast, a UK-based company would typically start payouts at 50th percentile relative performance

3. TSR Caps. In order to reward both relative and absolute performance, some companies with relative TSR plans have placed a cap on payouts when absolute TSR is negative. These caps often limit payouts to 100% of target despite the company’s ability to outperform in a down market, as shareholders lost value during the performance period.

The obvious issue with this approach is the lack of symmetry. Specifically, if the share price increases significantly, but relative TSR is below the threshold level, no payouts will occur. Thus, shareholders will realize a significant increase in stock value and management does not receive a payout (contrast this result with stock options, where management would realize a significant amount of “intrinsic value”). The lack of symmetry and the general belief that out-performance in a down stock market should be rewarded has likely led companies to refrain from imposing caps on payouts.

This may change as shareholders and the proxy advisory firms continue to apply pressure on companies to better align pay and performance. In addition, the SEC proposed rules required under Dodd Frank in July 2015 that when finalized will require disclosure of the relationship of pay and TSR (both relative and absolute). This disclosure could impact the design of incentive plans including TSR-based plans to further align realized compensation with shareholder returns (including the use of TSR caps).


Michael Kesner is principal and Jennifer Kwech is senior manager of Deloitte Consulting LLP’s Compensation Strategies Practice. 

 

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.
This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation.

Engagement as a Solution to the High Cost of Burnout

What’s secretly killing employee engagement?

Stunning reports on burnout levels in health care have forced organizations like Mayo Clinic and other major players to invest heavily in interventions.  Critical care providers are experiencing annual increases in severe burnout. One study found that 45-55% of physicians across all specialties experience burnout (compared to 26.2% of working adults in the general population!).  

These burnout rates should be unacceptable to top management. Burnout is serious, and it’s a formidable enemy of sustained engagement and productivity.  Some executives are investing in interventions to counter the consequences of burnout. Their concern goes well beyond caring about employees; it’s also smart business.

Unfortunately, some of our best business practices got us here. Decades of streamlining, increasing technology, and global competition have created environments that foster burnout.  The very efforts that increased efficiency are depleting our workforce and reducing effectiveness.

Career Partners International is helping organizations to assess and address engagement issues and help prevent burnout.  Companies who recognize the need to invest in preventative measures to keep their employees happy, healthy and engaged are seeing increased production and a positive effect on the success of their organization. 

What is burnout?

Burnout occurs in every sector and every industry. Entrepreneurs, executives, engineers, social workers, financial professionals, graphic artists, first responders, sales professionals and customer support staff all burn out in significant numbers. 

What’s worse, it is often the brightest, most dedicated, talented, and energetic employees who burn out. Career burnout occurs from the board room to the front line. It affects those who are passionate about what they do, the strivers and drivers in business. 

The very attitudes and qualities that make some people highly valuable may make them vulnerable. Individuals who get severe burnout lose the passion and sense purpose they started their careers with. They end up depleted, disillusioned and disengaged. They become lethargic, negative and ineffective.

This is more than a personal problem for employees. Greek researchers reported cognitive impairments of burnout such as deficits in attention and memory impairments.  Symptoms include the inability to concentrate, short and long term memory problems, decreased accuracy/higher error rates, and difficulty with problem solving and analytical tasks. 

Mental, emotion and physical exhaustion and unresolved stress lead to increased illness, absenteeism and “presenteeism” (being present at work but unproductive due to illness, lack of energy, focus, motivation, or work overload).  Individuals’ diminished confidence undermines initiative and follow-through. 

Cynicism and negative attitudes toward others sets in.  Relationships with clients and colleagues suffer as do efforts involving service, cooperation, and collaboration.  Safety is compromised as workers experience attention lapses or lack the energy or interest in ‘doing things right’. 

Job performance and ability to handle stress spiral downward as the symptoms continuously interact and exacerbate each other. This is a business problem.

How can we prevent or fix burnout?

There IS GOOD NEWS.  Burnout is reversible. Even better, ENGAGEMENT is the mirror opposite of burnout.  Increasing engagement is both the cure for and the benefit of reducing burnout.

Burnout varies across and within organizations.  There is no standardized way of evaluating specific causes and costs of burnout on safety, work quality, individual and team productivity, customer satisfaction, or the bottom line.

This does make it legitimately difficult for businesses to assess and address.

But, every effort to mitigate burnout will result in increased effectiveness and engagement.  And every sustained effort to create cultures that build engagement and restore energy will reduce burnout and its costs.

Effective initiatives at the individual and organizational levels are proving successful. Companies are working with experts like Career Partners International to design customized assessments of structures, stressors, and conditions that impair engagement and lead top performers to burn out.  Quality assessment enables organizations to pinpoint structural, cultural, and developmental goals for maximum impact. 

From job redesign to career management programs, companies are ensuring that employees stay engaged by providing stimulating challenges, fostering growth, increasing career opportunities and enhancing business and personal skills. 

Change management skills for leaders, managers, and employees reduce stress and increase buy-in, allowing companies to adapt and move forward quickly. Programs to improve individual skills in stress management, time management, job-specific competencies, and even mindfulness, have proven effective in counteracting burnout.

Team building activities, conflict resolution, consensus building, and communication training enhance employee engagement, investment, and success. Team environments that promote trust, confidence, and respect mitigate negative effects and pressure of high performance expectations. Research indicates that strong interpersonal relationships with co-workers is one of the most powerful antidotes for stress and burnout.

Enhancing current leader capabilities through leadership development can empower managers with advanced competencies in coaching, delegating, mentoring, motivating, and performance management.   Positive leadership increases engagement and reduces negative impact of burnout.  Leaders that foster cultures of trust, interpersonal relationships, safety, creativity, and an investment in the goals and mission can inspire employees to produce and sustain high performance over many years.  Leaders who prioritize and model self-care and rejuvenation instill these ‘safeguard behaviors’ in their reports.

Cultures that emphasize development, communication, fairness, and meaning and purpose sustain engagement and effort and outperform the competition now and over the long-term.  Preventing and fixing burnout doesn’t happen by accident, but by regular assessment and strategic investment.

About Career Partners International:

Career Partners International provides top quality talent management services to organizations of all sizes. Their offices around the world help assessengagedevelop, and transition talent in any industry. To find out more about Career Partners International and how you can maximize your organizational performance, reach out to an office near you or contact us today!

About the Author:

Cheryl Lynn Dratler provides subject matter expertise in burnout, complex career issues, career transition, employee and team development. She is a Master Career Counselor and Licensed Mental Health Counselor, and serves as Senior Career Consultant with Career Partners International, Florida – Caribbean.

 

The Mentoring Edge

Client satisfaction. Employee retention. Succession planning. These are not simply corporate buzz phrases. They are the competitive edge that differentiates a great company from all the rest. Mentoring is the critical component, and awareness of its importance has increased to the point that few question its value.

As a result, many companies have implemented mentoring programs. Unfortunately, without thoughtful program design, few of them succeed at fully engaging both the mentors and the mentees in a long-term, transformative relationship. To help companies understand how to create a successful mentoring program, we interviewed several Nashville business leaders to understand their experience.Quote

We started by looking at how transformative a good mentoring experience can be. When talking with Carolyn Kitts of Gresham, Smith & Partners, she shared a memorable experience:

“My first experience with a mentor was when I was working as an administrative assistant for the President of the company. I was hardworking, but lacked self-confidence. He saw something in me that I didn’t see I myself and he spent time helping and coaching me. It is because of him that I have the success I have now.” – Carolyn Kitts

For some leaders, such as Traci Nordberg of Vanderbilt University Medical Center, her transformative mentoring experience also came from a boss:

“Early on, I had a great boss at a critical time of my career. That person put me in situations I didn’t know I could handle, but he saw ability in me that I wasn’t aware of.” – Traci Nordberg

No matter who you have a mentoring experience with, according to Carolyn Kitts, “Being open and honest is what is needed to break through and have a great relationship.”

There are two schools of thought surrounding mentoring programs. Some favor informal mentoring where the mentoring relationship develops organically and both parties become invested in the growth process, as in the case of both Carolyn and Traci. Others believe a more formal approach is better because it ensures that mentors and mentees connect and provides a set of guidelines for how they can build a successful and productive relationship.

Both types of mentoring programs can be valuable and which one you choose depends on your organizational culture and resources you have available. Implementing a formal mentoring program can be challenging and requires a delicate balance of support and flexibility. If your company decides to undertake a formal mentoring program, here are some best practices to help ensure your program is successful.Best Practices

KISS – As best you can, keep it simple. Less is usually better.

Provide Guidelines and Training – Do not assume mentors and mentees know what to do. Provide guidelines on what is appropriate and what is not. Mentees need to be clear on what skills they want to develop from the relationship. That will determine which mentors to select. Mentors need to know what is expected of them in terms of time and preparation. Are they simply sharing their experiences or are they preparing the mentee for their next challenge or growth opportunity?

Flexibility – One size does not fit all. Each mentee will have a different set of goals and ideals they want from the relationship, so make sure your program can accommodate their unique needs. Suggest topics for their meetings to help them get started, but allow the latitude for the meetings to evolve to meet the needs of the relationship. The more you try to control things, the less likely it will work. The more flexibility you offer, the more likely it will work.

Reporting Structure – Although many bosses make great mentors, in a formal mentoring program you must make sure the mentor and mentee are not in the same chain of command. The success of a mentoring relationship depends on the mentee’s ability to safely and candidly share their experiences without fear of retribution. This is also a strong argument for encouraging external mentors.

Chemistry – It is critical that the mentor and mentee have chemistry with one another and are able to establish a good rapport. Without it, a lack of commitment to one another will likely surface and the relationship will fall apart. Giving the mentee more than one mentor to choose from and see who they connect with will help ensure a more successful relationship.

In discussing mentoring in relation to the overall leadership development strategy, everyone agreed that mentoring is an important strategy for growing the organization. Although mentoring can be used to address specific issues, it is usually used to develop leaders and help them advance to the next level in their careers. Mentors play an important role in helping mentees see and understand what success at the next level looks like and how to get there. They share their experiences both positive and negative as learning opportunities.

Best Practices

Evaluating organizational resources is a must when developing a mentoring program. For example, when talking with Traci Nordberg, she said, “It required a lot of organizational resources to do a mentoring program.” Not having sufficient resources is a common challenge among organizations. The smaller the organization, the less resources you have available; the larger the organization the more likely you will need a dedicated team to run the program.

Encourage employees to seek external mentors, particularly in high level positions where peers become scarce. External mentors bring an outside-the-box, objective perspective. Conversations are viewed as safe and can be extremely productive at solving challenges and understanding how to maneuver politics at the senior levels. Ginger Duncan of Ingram Barge had external mentors and said, “External mentoring gives you a perspective that you may not have because you get too silo focused in your world.”

Whether you decide to have an informal mentoring program or a formal one, internal or external, there is no question that mentoring will generate positive outcomes in your organization.

If you have additional questions on how to best integrate mentoring into your organization, contact your local CPI office.

Living in a Material World

veenaramani

Veena Ramani

It is clearer than ever before that sustainability practices can affect corporate value. That was the main thread of a panel that I led at the National Association of Corporate Directors’ 2016 Global Board Leaders’ Summit in Washington, D.C. My co-panelists Christianna Wood, director at H&R Block, and Seth Goldman, founder of Honest Tea, and I discussed the potential risks and opportunities that environmental and social issues pose to companies.

Sustainability is a broad term, and not every environmental or social issue belongs on the board agenda. But when an environmental or social issue has the potential to affect corporate revenue and earnings in the short and long term, sustainability absolutely should be on the table.

At the end of the day, it all comes down to materiality, and this is where corporate directors have a critical role to play.

Materiality is about determining a company’s priorities. As fiduciaries responsible for overseeing a company so that it not only survives but also thrives in the long term, directors have a responsibility to assess whether a company is making the right choices.

But the much harder question is: When does an environmental or social issue rise to the level of being material?

Here are some steps directors can take to drive discussions about whether sustainability issues are material to the companies that they oversee.

1.) Understand how sustainability is being integrated into your company’s efforts as a way to identify material issues.

There are a few ways to do this. Directors could point management towards the Sustainability Accounting Standards Board’s Company Implementation Guide, which provides a great starting point for companies to assess whether certain sustainability factors could be considered material for the purposes of the company’s financial filings. Directors could also integrate themselves more meaningfully into corporate efforts aimed at identifying material sustainability issues. They could provide perspectives on the connections between sustainability factors, corporate strategy, risk, and revenue.

2.) Include key issues being raised by critical stakeholders in the materiality exercise. 

While a broader range of stakeholders is raising a variety of issues these days, the financial community is a particularly critical constituency to direct attention towards. As we discussed in our panel, the U.S. investor community is starting to make the connections between sustainability and the financial value of companies in their portfolios. During the 2016 proxy season, close to 400 shareholder resolutions on climate change and other sustainability issues were filed. Large investors including CalPERS, CalSTRS and State Street Global Advisors are asking their portfolio companies to put directors with climate expertise on their boards.

In addition to tracking broad sustainability trends that investors are paying attention to, prudent directors could consider opportunities to engage directly with key shareholders to get a sense of issues specific to the company and the industry. Directors could also track and engage with the broader activist and advocacy community as a risk management exercise.

3.) Weigh in on the time frame over which issues are considered to be material.

Since the board in particular is responsible for long-term corporate performance, directors play an important role in examining whether their company’s materiality process focuses on considering issues over the long or short term.

Overall, momentum is building to adopt a more long-term view to encourage companies and boards to think more broadly about sustainability and materiality. The recently released Commonsense Corporate Governance Principles, which are backed by major U.S. companies including JPMorgan Chase & Co., Berkshire Hathaway, and Blackrock, support the move to long-term thinking. And more companies including Unilever, Coca Cola, and National Grid are moving away from the practice of issuing quarterly guidance specifically to encourage investors and other stakeholders to adopt long-term thinking.

4.) Disclose details on what you consider to be your company’s material priorities.

Noting that determinations of materiality depend on whom the company considers to be its most significant stakeholders, governance experts are starting to call on corporate boards to release a statement noting critical audiences that the company is oriented towards and issues that the corporation is prioritizing. Companies like the Dutch insurance company Aegon have started to issue such statements.

The process of helping to identify the right issues is just a first step in a director’s responsibility on materiality. Directors have an important role to play in ensuring that material issues, when identified are integrated into board deliberations on strategy, risk, revenue and accountability systems. However, getting to the right issues lays an important foundation for the company and its key stakeholders to build on.


Veena Ramani is a senior director at the sustainability nonprofit Ceres. She runs the organization’s program on corporate governance. She recently authored the report View From the Top: How Corporate Boards Engage on Sustainability Performance.

Living in a Material World

veenaramani

Veena Ramani

It is clearer than ever before that sustainability practices can affect corporate value. That was the main thread of a panel that I led at the National Association of Corporate Directors’ 2016 Global Board Leaders’ Summit in Washington, D.C. My co-panelists Christianna Wood, director at H&R Block, and Seth Goldman, founder of Honest Tea, and I discussed the potential risks and opportunities that environmental and social issues pose to companies.

Sustainability is a broad term, and not every environmental or social issue belongs on the board agenda. But when an environmental or social issue has the potential to affect corporate revenue and earnings in the short and long term, sustainability absolutely should be on the table.

At the end of the day, it all comes down to materiality, and this is where corporate directors have a critical role to play.

Materiality is about determining a company’s priorities. As fiduciaries responsible for overseeing a company so that it not only survives but also thrives in the long term, directors have a responsibility to assess whether a company is making the right choices.

But the much harder question is: When does an environmental or social issue rise to the level of being material?

Here are some steps directors can take to drive discussions about whether sustainability issues are material to the companies that they oversee.

1.) Understand how sustainability is being integrated into your company’s efforts as a way to identify material issues.

There are a few ways to do this. Directors could point management towards the Sustainability Accounting Standards Board’s Company Implementation Guide, which provides a great starting point for companies to assess whether certain sustainability factors could be considered material for the purposes of the company’s financial filings. Directors could also integrate themselves more meaningfully into corporate efforts aimed at identifying material sustainability issues. They could provide perspectives on the connections between sustainability factors, corporate strategy, risk, and revenue.

2.) Include key issues being raised by critical stakeholders in the materiality exercise. 

While a broader range of stakeholders is raising a variety of issues these days, the financial community is a particularly critical constituency to direct attention towards. As we discussed in our panel, the U.S. investor community is starting to make the connections between sustainability and the financial value of companies in their portfolios. During the 2016 proxy season, close to 400 shareholder resolutions on climate change and other sustainability issues were filed. Large investors including CalPERS, CalSTRS and State Street Global Advisors are asking their portfolio companies to put directors with climate expertise on their boards.

In addition to tracking broad sustainability trends that investors are paying attention to, prudent directors could consider opportunities to engage directly with key shareholders to get a sense of issues specific to the company and the industry. Directors could also track and engage with the broader activist and advocacy community as a risk management exercise.

3.) Weigh in on the time frame over which issues are considered to be material.

Since the board in particular is responsible for long-term corporate performance, directors play an important role in examining whether their company’s materiality process focuses on considering issues over the long or short term.

Overall, momentum is building to adopt a more long-term view to encourage companies and boards to think more broadly about sustainability and materiality. The recently released Commonsense Corporate Governance Principles, which are backed by major U.S. companies including JPMorgan Chase & Co., Berkshire Hathaway, and Blackrock, support the move to long-term thinking. And more companies including Unilever, Coca Cola, and National Grid are moving away from the practice of issuing quarterly guidance specifically to encourage investors and other stakeholders to adopt long-term thinking.

4.) Disclose details on what you consider to be your company’s material priorities.

Noting that determinations of materiality depend on whom the company considers to be its most significant stakeholders, governance experts are starting to call on corporate boards to release a statement noting critical audiences that the company is oriented towards and issues that the corporation is prioritizing. Companies like the Dutch insurance company Aegon have started to issue such statements.

The process of helping to identify the right issues is just a first step in a director’s responsibility on materiality. Directors have an important role to play in ensuring that material issues, when identified are integrated into board deliberations on strategy, risk, revenue and accountability systems. However, getting to the right issues lays an important foundation for the company and its key stakeholders to build on.


Veena Ramani is a senior director at the sustainability nonprofit Ceres. She runs the organization’s program on corporate governance. She recently authored the report View From the Top: How Corporate Boards Engage on Sustainability Performance.

Defeating Unconscious Bias

You can find it in every work environment, but most of us don’t see it.  It interferes with good management decision making, affecting everything from hiring, promotions, layoffs and teambuilding to advertising, marketing, product development and product placement.  It impacts our thought processes and can cloud our judgement. “According to Timothy Wilson, professor of psychology at the University of Virginia and author of the book Strangers to Ourselves: Discovering the Adaptive Unconscious, we are faced ­­with approximately 11 million pieces of information at any given moment. However, our brains are only able process about 40 of those bits of information at one time.  So, the brain generates shortcuts and uses past knowledge to make assumptions.  Most often, we don’t even recognize it’s happening.”1 This unconscious bias results in our making decisions based on what we expect, especially when it comes to “people” decisions like hiring the best person for the job.

“Most of us believe that we are ethical and unbiased. We imagine we’re good decision makers, able to objectively size up a job candidate or a venture deal and reach a fair and rational conclusion that’s in our, and our organization’s, best interests,” writes Harvard University researcher Mahzarin Banaji in Harvard Business Review. “But more than two decades of research confirms that, in reality, most of us fall woefully short of our inflated self-perception.”1  The result is our multiple unconscious biases serve as boundaries restricting and confining decision-making capabilities, as we see in the situations described below.

#1 — Jim approached the next candidate for the open marketing research assistant at his company.  He was excited to interview Janelle, because she recently graduated from the same college Jim attended, had great experience from her previous company and was highly recommended by a mutual colleague.  While waiting for Jim to arrive, Janelle listened to some music on her mobile phone and answered a few emails.  When Jim greeted Janelle, he was taken aback by her business casual attire, her natural curly hair and the backpack she slung over her shoulder as they walked to his office.  After the interview, his enthusiasm disappeared and he was reluctant to offer Janelle the job.  Jim is a 54-year-old White male from suburban Detroit. Janelle is a 26-year-old bi-racial woman from Madison, WI.

#2 — Angela is a 37-year-old Latina single mother from Chicago who advanced to IT director at a Minneapolis area Fortune 100 company.  She is in the midst of presenting her recommendation to implement a new manufacturing system in the company manufacturing plant in North Carolina, a project she’s researched for six months.  The meeting includes her peer, Nathan, the second IT director, a senior IT specialist, the division vice president, vice president of finance and vice president of engineering.  All are White males in their mid-50s. Nathan is married with two children.  In the midst of her presentation, the division vice president, Paul, wholeheartedly supports Angela’s recommendation and gives the green light for the project.  He stresses the need for a strong leader on-site in North Carolina, and then assigns the project to her colleague, Nathan. After the meeting, when Angela asked Paul why he suggested Nathan, Paul replied, “Well, I know you have to be available for your daughter.”

#3 — Becky, a 60-year old white female, came home from work distraught.  She explained to her husband that she had been put on a performance improvement plan by her new boss.  She was upset and confused, since she had received exemplary annual performance reviews each of  her 23 years at the mortgage brokerage firm at which she worked as an account manager, until they hired Marcus.  He is a 28-year-old supervisor and the new Client Relationship Manager.  Marcus told Becky that she wasn’t effective at managing her clients as he’d like her to be and that she needed to be more efficient in communicating with clients, perhaps using more email and reducing face-to-face and phone contact. He thought Becky needed to give this area of her job extra attention.  He suggested she attend supplemental webinar training, despite the fact that Becky had been commended by internal and external customers for the extra care and personal touch she brings to her job and had trained all of the new and younger account managers at the firm.

In each of the three situations, bias is the main culprit behind the decision making.  Whether biases are based on age, race, marital status, class, gender, religion, sexual orientation, culture, or other factors, our biases impact our world view and how we understand, respond, and react to every experience. What can we do to defeat the unconscious bias that influences who we hire, fire, promote, and value as high potential in our organizations?  Here are six strategies every person can apply right now.

Check Your Initial Thoughts

Your first impressions may be clues to any biases you have.  Ask yourself, “Would I feel the same way, if this person were part of different group?”  Pause long enough to give yourself time to process what you are doing and how biases might be affecting your decision. 

Be Logical

Utilize the power of logic.  Process how many people you actually know that conform to your actual bias.  You will likely find that the number of people that conform to your bias that you personally know are quite few.  Avoid allowing urgency or professional pressures to cause you to override logic and default to bias.

Focus On Skills And Eliminate Distractions

Ensure job candidates go through the same selection process when hiring for an open position.  Define clear evaluation criteria and standards prior to reviewing resumes.  Implement blind resume reviews, eliminating any identifying factors that could bias hiring managers.   Avoid unstructured interviews by using assessments and predetermined interview questions.   

Check the Data

Review company hiring trends over a specified period time.  Does the data reveal a tendency toward hiring White males and away from hiring underrepresented people groups?  Is there evidence of a preference for candidates under 30 years of age?

While management may stand in denial over any internal corporate bias, disproving the data in company records may reveal another story. Look at the data.

Tackle the “M” Word – Microaggression

You may have seen or experienced a time when someone new and tried to join in a conversation with a group and they responded by acting as if the person wasn’t in the room, by physically turning away from them or by talking to everyone around the person never acknowledging their presence. Or perhaps, you were the one, consciously or unconsciously, who ignored the new person.  With body language, words and distinctly pernicious behaviors, we send subtle and not so subtle signals that adversely impact our current and future interactions with individuals we encounter at work and throughout our circles of influence.  These all too familiar behavioral and verbal indignities that convey insulting, unwelcoming and sometimes intimidating comments about race, religion, sexual orientation, socio-economic status and gender are called microaggressions.  As team members become aware of who they typically interact with, how they interact with one another and how their behavior and language affects others in their workspace, the environment becomes more equitable for everyone and the effects of unconscious bias dissipate.

Be Intentional

Act as if the bias doesn’t exist. Intentionally adjust behavior to counter any biases you tend to exhibit. Set a month long specific, measurable goal to try new language and behaviors and note the differences in your encounters with team members.  Don’t hold so rigidly to what you think you know, that you disregard evidence of anything that might change your mind and thereby change your actions

Promote Connectedness

Value difference and concentrate on commonalities.  Lead to connect ideas and people — as one who is a builds bridges between cultures, between gender, between generations, trying to find common ground. Reach out to people who are different and talk about music, food, movies, books or sports.  As you realize how little difference exits, bias begins to fade. 

The bottom line is this:  The desire to defeat unconscious bias is not enough.  In order to see organizational improvement and increased productivity, strategies have to be implemented in the workplace leader to leader, team to team and business unit by business unit. Desire is a powerful force for change.  However, a rational and open mind are the necessary tools.  One without the other gets us nowhere. To defeat unconscious bias, we must have an awareness of unconscious biases, use our thoughts to weaken them and behave in ways that run counter to what our unconscious biases tell us to. 


1 Porter, Jane. “You’re More Biased Than You Think.” Jane Porter 10.06.14 5:33 AM. FastCompany.com, 6 Oct. 2014. Web. 4 Oct. 2016.

 

 

Help Your Company to Face Its Future Confidently

Jim DeLoach

Jim DeLoach

The uncertainty of looking to the future presses boards to consider how confident their senior executives and supporting teams are in executing strategy. How can the board help the companies they oversee to face the future with a greater sense of confidence?

Confidence is neither a cliché nor an assertion of mere optimism. Rather, it is a quality that drives leaders and their companies forward. The Oxford English Dictionary defines confidence as “the state of feeling certain about the truth of something” and “a feeling of self-assurance arising from one’s appreciation of one’s own abilities or qualities.” This definition focuses on the board and management’s appreciation of the collective capabilities of the enterprise, including the ability to carry out a company’s vision. It raises three fundamental questions:

  • Do we know where we’re going directionally and why? Are our people committed to achieving a common vision that is clearly articulated, meaningful, and aspirational?
  • Are we prepared for the journey? Does our staff have the capabilities to execute our strategy? Do we have a great team, a strong roadmap, and the required processes, systems and alliances, and sufficient resources to sustain our journey?
  • Do we possess the ability, will, and discipline to cope with change along the way, no matter what happens? Does our board have the mental toughness to stay on course? Is our management team agile and adaptive enough to recognize market opportunities and emerging risks, and capitalize on, endure, or overcome them by making timely adjustments to strategy and capabilities?

Definitive, positive responses to these questions from the board will enable confidence across the organization.

Looking back on experiences working with successful companies, seven attributes were identified that organizations must have when facing the uncertainty of future markets.

How to Build the Foundation for Confidence

  1. Confident organizations share commitment to a vision. Commitment to a vision provides a shared “future pull” that is both inspiring and motivating. This perspective fuels enterprise-wide focus and energy to learn, which encourages participation and altruistic camaraderie. An effective vision crafted by the board and executive team leads people at all levels of a company to recognize that the enterprise’s success and their personal success are inextricably linked.
  2. Confident organizations have a heightened awareness of the environment. A confident organization constantly reality tests its market understanding by facilitating effective listening to customers, suppliers, employees, and other stakeholders. Boards should encourage companies to generate sources of new learning, encouraging systemic thinking in distilling and acting on the environment feedback received, with the objective of driving continuous improvement. The confident organization fosters a culture of sharing and supports formal and informal continuous feedback loops to flatten the organization, get closer to the customer, and promote a preparedness mindset.
  3. Confident organizations align their required capabilities. It is a never-ending priority of the board to ensure that the right talent and capabilities are in place to achieve differentiation in the marketplace and execute strategies successfully. Capabilities include an enterprise’s superior know-how, innovative processes, proprietary systems, distinctive brands, collaborative cultures, and a unique set of supplier and customer relationships.

How to Sustain Confidence

Achieving a foundation of confidence is necessary, but alone is not enough without concerted efforts to sustain confidence. Astute directors and executives know that the ability, will, and discipline to cope with change are also needed to sustain their journey. Those winning traits are enabled by the attributes below.

  1. Confident organizations are risk-savvy. The confident organization is secure in the knowledge that it has considered all plausible risk scenarios, knows its breakpoint in the event of extreme scenarios, and has effective response plans in place (including plans to exit the strategy if circumstances warrant). Most importantly, the confident organization should have an effective early-warning capability in place to alert decision-makers of changes in the marketplace that affect the validity of critical strategic assumptions. In a truly confident organization, no idea or person is above challenge and contrarian views are welcomed.
  2. Confident organizations learn aggressively. Confident organizations improve their learning by: creating centers of excellence; embracing cutting-edge technology to drive the vision forward; fostering an open, transparent environment of ongoing knowledge sharing, networking, collaboration, and team learning; perceiving admission of errors as a strength and requiring learning from the missteps; and converting lessons learned into process improvements. Aggressive learning stimulates the collective genius of the entire enterprise.
  3. Confident organizations place a premium on creativity. Innovation should be an integral part of the corporate DNA of the confident company, and should be evidenced by setting accountability for results with innovation-focused metrics at the organizational, process, and individual levels to encourage and reward creativity. Companies committed to innovation have the creative capacity to take advantage of market opportunities and respond to emerging risks. When innovation is a strategic imperative, companies empower and reward their employees to take the appropriate risks to realize new ideas without encumbering them with the fear of repercussions if they aren’t successful.
  4. Confident organizations are resilient. Confident organizations have adaptive processes supported by disciplined decision-making, and are committed to adapt early to continuous and disruptive change. They have the will to stay the course when the going gets tough, and are prepared to act decisively to revise strategic plans in response to changing market realities. They do not allow competitors to gain advantage by building large capital reserves, having great relationships with their lenders, and by cultivating trusting relationships with their customers, vendors and shareholders. The strategies that their boards approve include triggers for contingency plans that directors and management will implement if certain predetermined events occur or conditions arise.

In summary, the speed of change continues to escalate, creating more uncertainty about future developments and outcomes. If there was ever a time for a board to assess an organization’s confidence, we believe it is now. It’s one thing to have a confident CEO, but if the people within the entity lack confidence, the organization itself may not have the creativity and resiliency needed to sustain a winning strategy.


Jim DeLoach is managing director with Protiviti, a global consulting firm. 

Help Your Company to Face Its Future Confidently

Jim DeLoach

Jim DeLoach

The uncertainty of looking to the future presses boards to consider how confident their senior executives and supporting teams are in executing strategy. How can the board help the companies they oversee to face the future with a greater sense of confidence?

Confidence is neither a cliché nor an assertion of mere optimism. Rather, it is a quality that drives leaders and their companies forward. The Oxford English Dictionary defines confidence as “the state of feeling certain about the truth of something” and “a feeling of self-assurance arising from one’s appreciation of one’s own abilities or qualities.” This definition focuses on the board and management’s appreciation of the collective capabilities of the enterprise, including the ability to carry out a company’s vision. It raises three fundamental questions:

  • Do we know where we’re going directionally and why? Are our people committed to achieving a common vision that is clearly articulated, meaningful, and aspirational?
  • Are we prepared for the journey? Does our staff have the capabilities to execute our strategy? Do we have a great team, a strong roadmap, and the required processes, systems and alliances, and sufficient resources to sustain our journey?
  • Do we possess the ability, will, and discipline to cope with change along the way, no matter what happens? Does our board have the mental toughness to stay on course? Is our management team agile and adaptive enough to recognize market opportunities and emerging risks, and capitalize on, endure, or overcome them by making timely adjustments to strategy and capabilities?

Definitive, positive responses to these questions from the board will enable confidence across the organization.

Looking back on experiences working with successful companies, seven attributes were identified that organizations must have when facing the uncertainty of future markets.

How to Build the Foundation for Confidence

  1. Confident organizations share commitment to a vision. Commitment to a vision provides a shared “future pull” that is both inspiring and motivating. This perspective fuels enterprise-wide focus and energy to learn, which encourages participation and altruistic camaraderie. An effective vision crafted by the board and executive team leads people at all levels of a company to recognize that the enterprise’s success and their personal success are inextricably linked.
  2. Confident organizations have a heightened awareness of the environment. A confident organization constantly reality tests its market understanding by facilitating effective listening to customers, suppliers, employees, and other stakeholders. Boards should encourage companies to generate sources of new learning, encouraging systemic thinking in distilling and acting on the environment feedback received, with the objective of driving continuous improvement. The confident organization fosters a culture of sharing and supports formal and informal continuous feedback loops to flatten the organization, get closer to the customer, and promote a preparedness mindset.
  3. Confident organizations align their required capabilities. It is a never-ending priority of the board to ensure that the right talent and capabilities are in place to achieve differentiation in the marketplace and execute strategies successfully. Capabilities include an enterprise’s superior know-how, innovative processes, proprietary systems, distinctive brands, collaborative cultures, and a unique set of supplier and customer relationships.

How to Sustain Confidence

Achieving a foundation of confidence is necessary, but alone is not enough without concerted efforts to sustain confidence. Astute directors and executives know that the ability, will, and discipline to cope with change are also needed to sustain their journey. Those winning traits are enabled by the attributes below.

  1. Confident organizations are risk-savvy. The confident organization is secure in the knowledge that it has considered all plausible risk scenarios, knows its breakpoint in the event of extreme scenarios, and has effective response plans in place (including plans to exit the strategy if circumstances warrant). Most importantly, the confident organization should have an effective early-warning capability in place to alert decision-makers of changes in the marketplace that affect the validity of critical strategic assumptions. In a truly confident organization, no idea or person is above challenge and contrarian views are welcomed.
  2. Confident organizations learn aggressively. Confident organizations improve their learning by: creating centers of excellence; embracing cutting-edge technology to drive the vision forward; fostering an open, transparent environment of ongoing knowledge sharing, networking, collaboration, and team learning; perceiving admission of errors as a strength and requiring learning from the missteps; and converting lessons learned into process improvements. Aggressive learning stimulates the collective genius of the entire enterprise.
  3. Confident organizations place a premium on creativity. Innovation should be an integral part of the corporate DNA of the confident company, and should be evidenced by setting accountability for results with innovation-focused metrics at the organizational, process, and individual levels to encourage and reward creativity. Companies committed to innovation have the creative capacity to take advantage of market opportunities and respond to emerging risks. When innovation is a strategic imperative, companies empower and reward their employees to take the appropriate risks to realize new ideas without encumbering them with the fear of repercussions if they aren’t successful.
  4. Confident organizations are resilient. Confident organizations have adaptive processes supported by disciplined decision-making, and are committed to adapt early to continuous and disruptive change. They have the will to stay the course when the going gets tough, and are prepared to act decisively to revise strategic plans in response to changing market realities. They do not allow competitors to gain advantage by building large capital reserves, having great relationships with their lenders, and by cultivating trusting relationships with their customers, vendors and shareholders. The strategies that their boards approve include triggers for contingency plans that directors and management will implement if certain predetermined events occur or conditions arise.

In summary, the speed of change continues to escalate, creating more uncertainty about future developments and outcomes. If there was ever a time for a board to assess an organization’s confidence, we believe it is now. It’s one thing to have a confident CEO, but if the people within the entity lack confidence, the organization itself may not have the creativity and resiliency needed to sustain a winning strategy.


Jim DeLoach is managing director with Protiviti, a global consulting firm. 

Former CEOs Advise on Successful CEO Transitions

patrick-dailey

Patrick R. Dailey

The succession work boards oversee is more complex than it once was. Oversight of the internal talent pipeline has grown beyond a narrow focus on CEO successors to include other internal and external talent. This relatively new role for the board or governance committee demands the hands-on ability to assess upper-management aptitude and readiness for the top job.

On September 21, the NACD Atlanta Chapter invited three exemplary former CEOs who serve on public boards to advise Atlanta-area directors on how to navigate this more demanding process. The panel, moderated by NACD President Peter R. Gleason, was comprised of Richard Anderson, previously CEO of Delta Airlines, and member of the Cargill and Medtronic boards; Martha Brooks, former CEO of Alcan, and director of Bombardier and Jabil Circuit; and Frank Blake, former CEO and chair of Home Depot, and currently a director at Delta Airlines.

For context, CEO turnover within the world’s largest 2,500 companies has increased in recent years, according to a 2016 study by PwC titled 2015 CEO Success that analyzed CEO turnover data from 2015 in the U.S. and around the globe. Among the study’s findings were the following data:

  • CEO turnover around the globe reached a record rate of 16.6 percent.
  • In North America, the rate of CEO turnover was 14.3 percent.
  • Planned turnover accounted for 10.9 percent of all turnover indicated in the study.
  • Force-outs were reported at 3 percent.
  • CEO turnover triggered by mergers and acquisitions occurred at a rate of 2.8 percent globally and in the U.S.
  • Looking specifically at U.S. turnover data, of all CEO turnovers, 4.4 percent were planned and 2.2 percent of the CEOs were forced out.

The traditional tactic when seeking new CEO talent has been to “go inside” for the most qualified internal candidate, but boards are now deliberately bringing in external CEO candidates. When the same PwC study compared statistics from 2004 to 2015, the percentage of outsiders hired as CEO increased from 14 percent in 2004 to 22 percent in 2015—a 50 percent increase in external hires in 10 years.

Hiring an outsider to serve as CEO was once seen as a last resort—something that typically only happened when a board had to force out the incumbent CEO suddenly, had failed to groom a suitable successor, or both. In recent years, however, more companies have chosen an outsider CEO, and frequently as part of a planned succession.

The stakes are higher. The process is more transparent and invites activist investors, pundits, and media to scrutinize a company’s process and its decision. Often the current CEO is left somewhat in the dark about the progress and the remaining leadership team may just not know status, which leads to uncertainty and process dysfunction.

The distinguished panel offered these nine valuable lessons learned about successfully navigating this board responsibility.

  • Succession must be a CEO-driven process. The panelists urged that a board place the CEO in the middle of the succession process but not as a direct party to the final decision process. They argued that the current CEO brings unique knowledge and passion for the future of the business, and that he or she wants a leadership legacy that includes a smooth and smart transition to a new CEO. The CEO also knows the internal talent pipeline better than any director, which could be an asset to the board. The panel added that with the board’s involvement and perhaps that of external resources, the risk of the “favored son” effect could be mitigated.
  • Succession is a full-board endeavor. Ownership of the process, knowledge of internal candidate development, insight into what could potentially derail the process, external benchmarking, and strategic issues that await the new CEO are matters for the full board to address. Committees can execute on specific tasks but the work, insight, and decision-making process related to CEO succession must be owned by the full board.
    One committee member urged every board member to meet and assess final candidates against a written success and impact profile during lengthy one-on-one interviews. The panel expressed their belief that the successful candidate would develop a sound, unique relationship with each director. Panelists also perceive interviews as the gateway to relationship building and ultimately to the CEO being accepted into the board’s inner circle.
  • The lead director plays an integral role as mentor. The board’s succession method needs a quality control focal point, or someone who will manage group processes among directors so that the “loudest voices” around the boardroom table are not those that necessarily carry the most weight. The panel suggested that the board could task the lead director with this quality-control leadership.
  • Remember that the board’s loyalty belongs to the company—not the current CEO or internal candidates. The board needs and values input from the CEO and there may be internal candidates who are highly regarded. But decisions must be based single-mindedly upon duty-of-care philosophies—the company’s future.
  • Competition among internal candidates must be monitored and managed by the CEO and board. Internal candidates should be explicitly informed or they are likely to figure out whether or not they are a candidate for the CEO role. With that information or suspicion, a competitive “horse race” may begin and performance may peak. There is also the inevitable dysfunction that can occur between the contenders as well as their organizations as they “bid up” their candidacy. CEOs and lead directors may intervene to manage negative behavior, and reinforce that senior-level performance is a collective effort. Compensation schemes for these candidates should be aligned in the spirit that “we all row the boat together.”
  • Get a written exit report from the outgoing CEO. Have the CEO personally develop a lengthy perspective about the future focus of the business and the CEO’s most critical areas of personal attention. Develop an “issues list” of those matters that the new CEO will likely bump into in the market, inside the company, and with regulators. Ensure the list is heavy on issues and light on recommendations. Finally, ask the outgoing CEO to list what strategic items and enabling matters must be done by the incoming CEO.
  • Develop a plan for easing out a reluctant CEO. The chair or lead director must have a “personal legacy” discussion with the CEO, and the CEO will inevitably get the message that it’s time to transition, and yet the panel emphasized that this should be a clear—not a nuanced—discussion. Have a plan for how and when the cord will be cut and communicate that plan clearly.
  • Define how unsuccessful transition candidates will be treated. If these executives can see a good path forward, embrace them. If not, help them leave, and do so quickly.
  • With a C-suite succession event, corporate strategy is likely to change. The board should endeavor to ensure that a sound corporate culture makes it through the transition.

NACD offers research and expert commentary on the executive succession process. Review Success at the Top: CEO Evaluation and Succession, which is part of our Directors Handbook Series, and a succession guide authored by Korn Ferry executives for the September/October edition of NACD Directorship magazine.


Patrick R. Dailey is a partner in BoardQuest, a consultancy specializing in C-Suite and board performance matters, and a member of the NACD Atlanta Chapter advisory board.