Understanding the Cyber Dialogue

Cybersecurity is more than a technological issue—it’s a business issue. In a BoardVision video moderated by Judy Warner—editor-in-chief of NACD Directorship magazine—Mary Ann Cloyd, former leader of PwC’s Center for Board Governance, and Zan M. Vautrinot, former commander of the Air Forces Cyber Command and current director of Symantec, Ecolab, and Parsons Corp., discuss effective cyber-risk oversight, addressing the following questions:

  • How can boards communicate with management about cyber risk?
  • How does cyber risk fit into discussions about risk appetite?

Cyber Dialogue

Here are some highlights from that conversation.

Judy Warner: For directors, I think one of the greatest challenges around the issue of cyber is how to engage in an informed conversation with management. And how do they become informed about their oversight roles as they relate to cyber?

Zan Vautrinot: One of the things that was absolutely clear about the private sector and corporate leadership is that they understood how to have a discussion about risks and strategy. The only thing different with cyber is that some of the technology and some of the solution sets are slightly different, but the conversation is the same. It is a discussion about a particular kind of risk and how it relates to the kind of business you are [in].

Warner: Mary Ann, from your perspective, how does that conversation take place, or start to take place, at the board level? And is it a conversation for the full board or a specific committee?

Mary Ann Cloyd: I guess I always say it depends. I never want to be so prescriptive as to tell somebody what they need to do because every board and every committee is different. However, I do think that, given the magnitude of how this affects so many businesses, it’s not a technology issue. It’s a business issue. So, with that, where would you oversee any other business issue at your board? And I’m guessing that a lot of it would belong at the full board, with parts of it delegated down to a committee.

Warner: The NACD recently published a handbook on cyber-risk oversight, and one of the discussions is around risk appetite and where does cyber fit into that equation today. And I know, Mary Ann, you have said we need to think of cyber as any other risk.

Cloyd: I think you bring up two interesting things. [I]n fact, we did a small publication [at PwC’s Board Leadership Center] earlier this year, and we called it “Defining Risk Appetite in Plain English.” What prompted it was I had a director come to me and he said, “Mary, we’re doing our off-site strategy session and we always talk about risk appetite. Do you have a good pre-read that I could give to the board so that they can understand what risk appetite means?” So we did this to really put in plain English, in four pages or less, what the dialog is between management and the board, and how you develop and define your risk appetite. And, to me now—as you have so beautifully put this, Suzanne—cyber is just another part of that risk discussion and how it fits into your overall strategy.

Vautrinot: Right. And if you have already had a discussion about your strategy and those things that are most important to you as a corporate entity, is it the data that is unique that you’ve collected—the information and the access to that information—that makes your corporation unique? Is it the technology or your research and development? Is it your insight into financial transaction or merger and acquisition? Is it [about] manufacturing processes or distribution processes?

Every board and every management team knows what is most important to them being successful as a corporation. It is likely that those things are the areas that [the board] would want to focus on with assessing cyber risk. If you look at that area and say this is what is most important to us as a corporation, and this is the technology that we depend on to do that activity, now I can say that is sufficient or it is insufficient relative to the amount of risk I am willing to accept in that area. There may be other areas that aren’t core to the business, and so you are willing to accept a different amount of risk or put different systems in place that kind of sandbox it—[systems] that put a fence around, or that separate or provide different controls to allow [the lower-risk] activity to run more openly, whereas [higher-risk areas are] much more controlled and much more precious.

Additional NACD resources

NACD’s Director’s Handbook Series: Cyber-Risk Oversight

NACD—Building a Relationship With the CISO

NACD—Assessing the Board’s Cybersecurity Culture

NACD—Cybersecurity Risk Oversight and Breach Response

The Resurrection of Recruiting


A recent U.S. survey by the Pew Research Center indicates that among those who have looked for a job during the last two years, 90% went online to search and 84% applied that way.

There’s more.  Of that 90% who went online, 34% considered it their most important resource.  And among millennials (age 18-29), 54% used their phone for job hunting.

But you are not surprised.  It’s figures like these that lead people to say “Recruiting is broken”.

Resurrection of recruiting finds the best

Well, maybe the old one.   As with many pre-web practices, technology is simply re-assembling the pieces to meet changed priorities.

Call it a resurrection of recruiting

The job market is a multi-faceted environment and job seekers go through many avenues to find the career they want.  For active candidates, the Internet has become a key resource.  Mobile phone usage is simply a logical add-on in a process that dumps tons of data into the top of the funnel at great convenience, negligible cost and often questionable value.

Technology’s Finest Hour

This is technology’s shining moment.  The benefits fade pretty fast as you move on.

For the candidate, the job board posting or the 30-second ad give only the bare bones of the job.  For the employer, automated resume processing and selection by algorithm save time and money but deliver a limited view of who is applying.

The benefit tends to be in the lower reaches of employee hierarchy, where technology facilitates unprecedented numbers of applicants, then solves the problems it has created with auto-assessing procedures.

As you go up the elevator and out to the corner offices, however, the new “efficiency” fades fast.

Recruiters – especially those such as members of the Cornerstone International Group who focus on Retained Executive Search – have a very specific finding the Best Person, including people not necessarily looking for the job.

Record Year for Recruiters

This is something technology is not particularly good at apparently.  The Association of Executive Search Consultants, which sets global standards for recruiting firms, expects a record year in 2015 for industry revenues and continued growth in search mandates.

What technology has done is refine and redirect the recruiting model into a more selective area where it continues to add value.   A smart recruiting company doesn’t compete with the web for junior positions.  But a hiring company will contract a recruiter to find a Chief Financial Officer or a plant manager in a niche industry – the harder to fill jobs that trigger a significantly more complex search protocol.

For the serious career seeker, the ad posting an interesting-looking job is nothing more than a marker.  He or she wants to know a whole lot more about the job, the company, its values, its working environment before they consider an application.

Companies slow out of the gate still expect the candidates to make themselves eligible for consideration. Companies who are leaders realize their first job is to make the opportunity attractive before demanding all the personal data.

This is the level at which the recruiter brings value as a trusted advisor on both sides of the table.

For the hiring company, the agency draws on experience and sector knowledge to locate and recommend the most qualified and the best fit.   For the candidate, the recruiter must communicate the job attributes and the company persona professionally but persuasively.

Rise of the Employer Brand

The supremacy of the candidate in current job markets has given rise to creation of the Employer Brand, which does the job of marketing, but for the primary benefit of the people it hopes will join the company workforce.

This means differentiating the hiring company from its peers in the same was as achieving distinction in the market place.

The leading strategy behind building business brands today is overwhelmingly dependent on Content Marketing.  Differentiation comes from attracting the attention and interest of the target customer through quality content presented on an on-going basis.

It is only logical, then, that the same strategies would be equally successful in attracting the best people to fill a key position – people who are not going to make a career move unless they feel sure it is the right fit for them.

Recruiting content does two things the old model passed over.  It differentiates the company in the job market and it reduces uncertainty in the mind of the applicanty

Recruiting is not broken, it’s been resurrected.  Like many other disciplines, it has just been reshaped and refined into a more valuable process by understanding how to use technology.


NEXT:  How Recruiting Content Works






Executive Search Continues to Grow

A third-quarter report from the Association of Executive Search Consultants (AESC) shows that the executive search and leadership consulting profession continues to grow both in revenues and number of searches.

Average fee per assignment grew 3% year-on-year and 5.81% quarter-on-quarter.   While the average number of searches started declined slightly quarter-on-quarter (1.25%), its year-on-year performance is up 4.87%.

The quarterly research has been carried out by the AESC since 2004 on trends in the global retained executive search and leadership consulting industry. Data for the report is collected from a consistent sample of AESC member search firms representing the activity of 1,430 executive search consultants in 46 countries worldwide.

Executive Search President

Karen Greenbaum

Access to retained executive search data by the AESC, the global representative body for this industry, positions this report as a leading indicator of the future worldwide management employment market.  It is a barometer of hiring trends for top-level and seldom advertised positions in key market sectors.

The Q3 State of the Executive Search Industry report reveals that the technology sector had a very strong quarter, moving it into second place behind financial services for average number of searches started (up 18.52% year-on-year and 5.36% quarter-on-quarter).

“We were pleased to see the technology sector rebounding after a somewhat surprising drop last quarter,” said Karen Greenbaum, AESC President & CEO.  “The strength of the most recent quarter was impressive.”

The life sciences / healthcare sector slowed slightly during Q3, but overall has performed strongly this year (up 20% year-on-year but down 1.27% quarter-on-quarter).

Industrial remains the largest sector at 24.6% with financial services remaining steady at 21.1%. Technology and life sciences / healthcare are at 15.3% and 15% respectively.

North America is the largest market for executive search, controlling a 44.4% share of the profession, followed by EMEA (32.4%), Asia Pacific (17.1%), and Latin America (6.1%).

Year-on-year three of these regions recorded significant growth in the number of searches started (Asia Pacific, 7.23%; North America, 6.94%; EMEA, 6.94%). For the second consecutive quarter Latin America witnessed a decrease in the number of searches both quarter-on-quarter (1.73%) and year-on-year (8.7%).

To read the full report, click here.


Global Recruiter Supports Free Enterprise

ATLANTA, GA,  December 4, 2015.   The global recruiter Cornerstone International Group’s ongoing support of free enterprise has been in evidence at opposite ends of the world recently.

In China, the Group has been awarded “Sponsor of the year 2015” recognition by the American Chamber of Commerce in Shanghai.   In Chile, Cornerstone International Group’s Alejandra Aranda was recently nominated for a third term to the Board of Directors of AmCham Chile, where she also chairs the Human Capital committee.

“We have been prominent in the Shanghai organization for many years,” says James Ng,  Managing Partner of the Cornerstone Shanghai office, who accepted the award. “It is actually the largest chamber of commerce in Asia-Pacific with 4,000 members and marks its 100th year anniversary this year.”

Cornerstone International Group is a leading executive search and leadership development organization in 65 locations around the world.  It has headquarters here in Atlanta and in Shanghai.  Members, who own their own businesses, are regional leaders and collectively represent one-stop, proven global capability for international clients.

The American Chambers of Commerce Abroad, part of the US Chamber Federation, are in 103 countries and supported by 70 policy experts.  Many of the Cornerstone International Group members are active in their regional AmCham organization.

“Rules-based trade and investment is a path to opportunity for all,” says Aranda, who is also Chairman of the LATAM Region of the Cornerstone International Group.  “We are strong supporters of these international efforts by the US Chamber of Commerce, which is a powerful advocate for international economic engagement.”

D100 Directors Impart Their Best Advice

We sometimes all wish we could go back in time to advise ourselves on how to approach a new challenge or community given the knowledge and experience we have today. For the 2015 NACD Directorship 100 (D100), each honoree was asked to do just that. D100 directors were asked to provide a short, written response to this question: “What is the best advice you would give to a first-time director?” The D100 editorial team received responses from most honorees and they ranged from pithy maxims to stories about the challenges of staying independent.

A portion of the responses from the Class of 2015 D100 directors follows. Profiles of D100 honorees can be found in the November/December issue of NACD Directorship magazine.

Gary AndersonGary E. Anderson

Chemical Financial Corp., Eastman Chemical Co.

“I found that the best way to [contribute] was to frame appropriate questions dealing with the topic at hand. It doesn’t matter what the issue is, whether on corporate strategy, short-term tactics, succession planning, compensation, or risk management. The use of appropriate questioning also can work at home with the family!”



Veronica BigginsVeronica Biggins

Avnet, Southwest Airlines

“I fully embrace the Southwest Airlines and Avnet way of doing business: treat your people well and they will be equipped and motivated to treat your customers extraordinarily well, and that will produce distinguished rewards for your shareholders. Everyone is important, in every nook and cranny of the business, and every decision at the board level should involve the question, ‘How will this affect our people, our principles, and our culture?’”


Paula H. J. Cholmondeley

Dentsply Intl., Nationwide Mutual Funds, Terex Corp.

  • “Know your shareholders. What are their expectations? Is the company meeting them?
  • “Know your colleagues. Diversity of views, backgrounds, and experience enriches the company bottom line. Learn where your colleague’s views differ from yours. Understand why. Have courage and join them in candid discussion.
  • “Know your management team. Do they live their values? Are they delivering results?
  • Be involved in NACD, as governance is a learned skill and doing it right keeps our private enterprise system strong.”


Betsy HoldenBetsy D. Holden

Diageo PLC, Time Inc., Western Union Co.

“The best advice that I received as a new director was, first of all, choose wisely. Select an industry and company that you are really interested in, a management team that you believe in, and a board where your skills and experiences are relevant and will add value.

“Secondly, what really differentiates the best directors is how they interact with management and the other directors. Good directors are confident and courageous, and challenge management in a positive, constructive way…They understand that chemistry is the intangible that drives board effectiveness and they really listen to and treat other directors with respect.”


Nancy KarchNancy J. Karch

Genworth Financial, Kate Spade & Co., Kimberly- Clark Corp., MasterCard

“Some of the best advice I received as a new director was to accept that this role is different than anything I had ever done, and to have patience to learn the ropes. [A director] is an advisor, a member of a peer team, a leader on governance matters, a decision maker on some matters—[it’s] a mix unlike anything else. Plus, as in any job change, one is entering a new culture, and in the case of a board, both a company and a board culture. So be patient.”


Tim ManganelloTimothy Manganello

Bemis Co., Delphi Automotive

“The best advice I received was pertinent to me both as a director and as a chair/CEO. That is: ‘Tim, be yourself, remember that is what got you here.’ [That advice] caused me to think about hard work, integrity, ethics, and striving to make the proper decisions.

“It also reminded me that as my career evolved from working summer jobs in automotive plants to the boardroom of BorgWarner, I listened to, learned from, and developed relationships with people from all levels of society. This has become a valuable tool in the boardroom. Each time ‘a sticky issue’ is discussed, I remember to think back to my previous experiences and express what I think is the proper approach.”


Sarah RaissSarah E. Raiss

Canadian Oil Sands, Commercial Metals Co., Loblaw Cos., Vermillion Energy

“The best advice I received came from a very seasoned director. He said that I should find a person or two on the board that I could best relate to and either ask them to be my ‘board buddy’ or just make them my ‘board buddy’ without even asking. This person would help me understand current board dynamics, help me understand the history as necessary, and provide feedback on the value I brought to the board. I have used this technique on every board to which I am appointed, [and it] has allowed me to be more productive and a valuable contributor more quickly. I am most appreciative of my ‘buddies.’”


Ronna RomneyRonna Romney

Molina Healthcare, Park Ohio Holdings Corp.

“Three people gave me great advice when I decided to accept board positions at Molina Healthcare and Park Ohio. The first was Mary Molina, the company’s chair. It was simple but profound: ‘Remember the mission. It is the cornerstone of our corporate culture.’

“The second came from Ed Crawford, chair and CEO of Park Ohio. He said, ‘Act with integrity at all times and have the courage to do the right thing.’

“The third was from my husband, Bruce Kulp, former general counsel of Ford Europe. He counseled me to listen, get as much information as possible, trust in the power of common sense, and to always think strategically.

“Lastly, the people you deal with in management and the board are human. They have families. They have good days and bad days. Kindness is powerful, even in the boardroom.”


Olympia SnoweOlympia J. Snowe

Aetna, T. Rowe Price Group

“One of the key components of executing critical judgment is ensuring an ongoing evaluation of how the company’s short term goals enhance its strategy for creating long-term value. That requires early and extensive director engagement in the shaping of the strategy, greater understanding and knowledge of business operations, and constant assessment and management of the risk.

“In this era of deeper investor involvement, it is more essential than ever for boards to communicate to shareholders the extent to which the independent directors are vigorously exercising their due diligence towards maximizing the value of the enterprise.”


Ron SugarRonald D. Sugar

Air Lease Corp., Amgen, Apple, Chevron Corp.

“Select your boards carefully…You should be mindful of geography, meeting schedules, and be prepared to put in whatever time is necessary. And when trouble comes, you must be committed to see things through—whatever it takes.

“In well-run companies, board meetings enter a predictable rhythm, and are fairly routine. It has been said that in routine times, the quality of a board doesn’t really matter—until suddenly those moments when it matters enormously. Such ‘moments’ might include a significant market shift, a technology disruption, a planned (or unplanned) management succession, a serious regulatory or litigation threat, an environmental or safety crisis, a significant acquisition, a hedge fund activist campaign, or a hostile takeover attempt. In those moments, the board’s collective wisdom, perspective, and mature judgement can make—or break—a company.”


Dave WilsonDavid A. Wilson

Barnes & Noble Education, CoreSite Realty Corp.

“The best advice came from the counsel I engaged for [a] special committee. He noted the fiduciary duties of directors formed a foundation but not the entire structure. The greatest challenge I will ever confront as an independent director, he said, is ‘independence.’ He was speaking not of the independence necessary to meet SEC and NYSE thresholds. Rather, he spoke of the independence of mind, thought and action.

“What our attorney never told me was how challenging it may be to hold fast when you are in the minority, but how critical it is to our governance system that you do.

“Polonius may have been a pompous fool, but I still find value in these words: ‘This above all: to thine own self be true, And it must follow, as the night the day, Thou canst not then be false to any man.’—William Shakespeare, Hamlet, Act 1 Scene III.’”

Review the full list of D100 honorees at NACDonline.org/Magazine, and take a few moments to consider who you might nominate for inclusion in our tenth anniversary list. A call for nominees will be issued to all NACD members in early 2016.

Take Control of Your Employer Brand

The term “Employer Brand” is a comparatively recent arrival.  But, for many organizations, it has become critical very quickly.

couple in the kitchen with laptopWhile all brands should set out to communicate a company’s values, marketing brands often don’t spend much time thinking about that end.   Marketing and sales leaders are more anxious to associate satisfaction and specific positive experiences with the brand imagery as pre-conditions to sales and competitive advantage.

The Employer Brand, on the other hand, communicates what it is like to be an employee at that company, what kind of a lifestyle it offers and what kind of future it presents.

These are the top-of-mind issues for the thousands of candidates who are going to come across your job offer.  And they are going to formulate their own opinions and reach their own conclusions based on almost exclusively internet-driven search and research.

In other words, your employer brand happens with or without you.

If you are letting it happen without you, you risk a form of suicide by increasingly shrinking the pipelines bringing fresh talent within your scope.  The biggest danger lies in the complacency that conflates and confuses the company business stature, as represented by its Corporate Branding, with the attraction of working for the company, as perceived from the Employer Branding.

For that reason alone, one of the first tasks in building the employer brand is to undertake perception gap studies involving your current staff and customers and potential employee candidates.  There can be lots of surprises there.

In the current issue of the online recruiting intelligence media ERE, there is a case history of CDW. The company is a leading technology solutions provider in the UK and North America.  Its assets are its people and CDW hires 1,000 people every year.

Although it is #56 on the Forbes list of America’s Best Employers, its B2B focus meant that potential prospects and hires have little idea who the company is and what it stands for.

You can read the case history here.

The Cornerstone Eagle Nov 2015

THE CORNERSTONE EAGLE is the newsletter for senior executives, friends and partners of the Cornerstone International Group around the world. The Eagle is majestic, free and towers above all else when gracefully gliding the currents in the air. The Cornerstone International Group likewise feels close affinity with the Eagle, in professionalism in our practice, honesty and integrity in all our interactions, and making positive changes in our work and processes to improve and create added value for our clients and candidates.

Download The Cornerstone Eagle – November

Business Leaders in Asia Remain Confident

SHANGHAI, CN November 16, 2015 — Despite the expected softening in China, Asia Pacific will remain the most vibrant business region in 2016, according to over 80 C-level executives who took part in Market Insight 2016, a global leadership summit here.

International Monetary Fund reports expect the GDP of developing Asia markets to grow at 6.4% collectively, compared to a world average of 3.6%. China’s downward trend still leaves it with growth forecast over 6% in 2015, supported by India with 7.5% at and Indonesia for 5.1%.

The conference is one of a series held for business leaders in  Asia by Cornerstone International Group, a leading executive search and leadership development organization with 65 offices worldwide. It has seven offices in China and Taiwan.

Conference delegates managing businesses in China expect rising costs, organization and talent related challenges and intensified competition in 2016. However, they feel the environment still justifies strong growth strategies.

“We conducted a spot survey during the conference, “said James Ng, President of Cornerstone CEO Connection (CCC). “And the consensus was for sales growth of over 16% in 2016. That’s a strong number.”

According to Ng, the figure reflects the rapid penetration of domestic firms, especially in service sectors, into deeper markets within China as well as export markets such as India and Indonesia. Growth expectations in the mature sectors such as industry, inhabited by established Multinationals, are in the low single digits.

The optimism among local enterprises appears to be supported by recent research from the Financial Times indicating that 56.7% of Chinese consumers expected to spend more in September compared with 54.9% in August.

James Ng

Keys to Winning a Great Job Offer: 5 Success Tips (P.L.A.N.S).

With 2016 just around the corner, it is imperative that candidates “plan to win” when embarking on a potential career change.   A critical thinking approach and successful planning will increase the likelihood receiving a market competitive offer. If your ultimate goal is often to join a new team and organization that more closely aligns with your personal values and professional goals, then please keep reading!

Here are five tactics that will improve your position in the complicated process of interviewing.  Think P.L.A.N.S.!  As Sir Winston Churchill stated, “He who fails to plan is planning to fail.”

Winston Churchill Quote

1.  Preparation is critical.  This starts immediately upon securing an interview.  With today’s tools of technology, it is overwhelming the amount of information that is available.  Allow yourself adequate time to conduct in-depth research.  Larger companies are impressed when you have reviewed recent financial results, as well as the latest press releases.  For smaller companies, take the time to connect with friends or potential allies at this organization and obtain information.  This is absolutely imperative and must go below the surface.

2. Leverage powerful questions.  My advice to candidates is simple: impactful questions, grounded in business acumen will help you progress further in the interview process.  The synthesis of your intellect, experience, company knowledge and understanding of the role can often catapult you to the top of the candidate mountain.

3.  Activate a proper follow-up plan. Interview follow-up in 2015 is different than fifteen years ago during my initial days in recruiting.  Today, consistency is key without crossing the line of appropriateness.  Ask the hiring manager about their decision making timeline and how to best remain in contact.  A balanced mix of email and phone calls will work.  When you call, try hiring managers early and late in the day.  Make three attempts to call; on final attempt, it is acceptable to leave a voice mail. 

Another game-changing tool:  a 30-60-90 day plan.  I am surprised by how few candidates take the time to analyze and compile a short-term plan to accelerate their integration into their new team.

4.  Negotiate even the best offer.  It is so exciting to receive a job offer from a company.  Even if it is ALL that you ask for, you should always ask for something.  Hiring companies expect you to negotiate.  Potential levers include:  sign-on bonus, six month review, company paid insurance premiums, 12 month retention bonus and/or extra week of vacation.

5.  Stay in contact during transition period.  This is an often-overlooked item.  You will be in touch with Human Resources and your future manager.  However, it is a great idea to remain in contact with others that you met during the selection process.  Be gracious for their support and convey your excitement about joining their company.  The more advocates you have in the beginning, the faster you will reach an appropriate comfort level in the company.

Best wishes if you are considering new career opportunities in the future.  May your PLANS be successful!

Martin Plumlee is the Founder and Owner of Plumlee & Associates, a Talent Optimization firm based in Nashville and Franklin TN.  The company offers Retained and Engaged Search services, as well as Executive Onboarding, Coaching and Outplacement Services .  Plumlee & Associates is the local equity partner firm for Career Partners International (CPI), which provides talent management services with specialization in career management, leadership development, executive and leader coaching, career transition and outplacement services.

Strine Rips Fund Voting, Advocates Tax on Trades

For the 1,200-plus directors convened at this year’s NACD Global Board Leaders’ Summit, Delaware Supreme Court Chief Justice Leo E. Strine Jr. had words of advice that ranged from improving time management to establishing a Tobin-like tax on financial transactions. The nation’s leading jurist on corporate matters also cautioned against using electronic devices during board meetings for unrelated matters because that information may one day be discoverable in court.

Leo Strine at NACD 2015 GBLS

Interviewed on Tuesday, Sept. 29, by NACD President Peter Gleason, Strine was at his provocative best. The proliferation of technology in the boardroom, Strine observed, may lead to an unintended consequence: the ability to discern just how engaged directors are and by what in board meetings. Strine warned of the possibility, and even the probability, of a shareholder suit that alleges inattention and seeks to support that allegation with a review of the director’s online activity when in board meetings—measuring just how much time was spent looking at material on the board portal versus sending e-mails, text-messaging family or friends, or playing fantasy football.

Boards also need to assess whether they are using their time to best effect. “There are no disciplined studies about how boards should be scheduled and what you do in certain committees,” Strine said. “The pattern is that if something is required legally or by statute, then that tends to get done first. A real challenge is to think like business people about your function as a director and how you use your time, and [recognize] that it reflects the priorities that you (as a board) set.” Strine challenged directors to set “a board budget of hours.”

Strine repeated a suggestion he has made previously that U.S. tax policy be adjusted to include a so-called Robin Hood or Tobin tax. Such a tax is named for the late Nobel Prize-winning Yale economist James Tobin, who in 1973 recommended a levy on short-term currency swaps in order to thwart speculation. A similar tax on stock trades, Strine maintains, would discourage short-term fund-hopping and generate new revenue.

Strine took issue with the voting practices of some large asset managers, noting that the sheer volume of votes created by shareholder proposals and the numbers of companies in each fund make informed voting impossible. Even the most “rational” investors, such as Fidelity Investments and the Vanguard Group, tend to vote their funds in one direction for the sake of expedience, he said. (See related content: Taking the Long View with Bill McNabb.) “It would be good for index funds to have their own voting policies. Why is the index fund voting the same way as the dividend fund?” Strine asked. “Why?”

One of the CEO’s most important jobs is to develop the next generation of leadership, Strine reminded the assembled directors, and boards should have opportunities for regular contact with up-and-comers.

Strine also recommended that boards consider the benefits of adopting a forum-selection bylaw. The inclusion of such a bylaw would allow corporations to determine where court cases are adjudicated when suits cover more than one jurisdiction. The state of Delaware in May enacted an arbitration law that is intended to provide speedier, more cost-effective dispute resolution as long as one of the companies in the dispute is domiciled in Delaware.

For further reading:  NACD Directorship featured an interview with Strine in the May/June issue.