A who’s who of leaders in corporate governance convened for the 11th annual NACD Directorship 100 Forum. The two-day Forum, themed “The Game Changers in the Boardroom,” opened with a gala dinner to honor the 2010 Corporate Governance Hall of Fame inductees. In attendance were H. Rodgin Cohen, chairman of Sullivan & Cromwell; Carol J. Loomis, a senior editor-at-large at Fortune magazine and longtime editor of Berkshire Hathaway’s annual letter to shareholders; and Edward A. Kangas, the former chairman and CEO of Deloitte & Touche whose prodigious current board service includes the chairmanship of Tenet Healthcare and a director for United Technologies among others.
“If you have an athlete that all of a sudden performs far above whatever he or she has ever performed, the immediate thought is steroids. Well, risk is the steroid for business, and too often there’s not enough drug testing in the boardroom,” said Cohen, who together with Loomis and Kangas reflected on their years at the top of the business world.
Introducing the Hall of Fame panel was Mark Preisinger, director of corporate governance for the Coca-Cola Company. “The theme of this year’s forum is the game changers and it’s particularly relevant given all that we in the corporate governance community are dealing with,” Preisinger said, noting that the Dodd-Frank Act and the mid-term elections will result in even more game-changing events for directors who serve public companies.
Loomis, whose articles have informed Fortune readers and in some instances proved transformative for more than 50 years, told an audience of more than 300 that directors need to keep the CEO honest by providing a balance to the chief executive’s power. “Your biggest job is fingering the CEO who is pleasant and nice and honest but just isn’t any good, and you have to do something about that guy because you just can’t go along in that respect,” said Loomis, accentuating that one duty of boards is to balance the CEO’s power. “Boards must do a much better job than they do about M&A deals. Too often, as far as I can tell, CEOs like nothing better than to do deals, they’re rather obsessive about it, and so the board has to apply the restraint.”
Kangas highlighted the need for boards to work as a respectful and respectable unit, saying, “It’s important to talk straight, play straight, no games. It’s okay to be politically astute in the boardroom; it’s not too good to be political. You learn in time, and it’s something I’ve learned the hard way, that listening is important. I sometimes reflect back on what my mother had to say, she said ‘Eddie, if you press your lips together your ears will work better.’”
“An independent lead director or an independent executive chairman is really important for the effective function of the boardroom,” Kangas continued. “It’s also important if you have a non-executive chairman that they are not chairman of the company. The CEO should be the focal point for every company both inside and outside.”
The Hall of Fame dinner opened the NACD Directorship 100 Forum, which each year convenes to celebrate the Directorship 100, the annual list published in the September issue, of the most influential people in corporate governance.