More than 300 guests gathered to celebrate the most influential people in corporate governance and the boardroom at the National Association of Corporate Directors’ Directorship 100 Forum awards dinner, held this week at the Waldorf-Astoria in New York City. The national membership organization also honored the Public Company Director of the Year, Jenne K. Britell, chairman of United Rentals, and the B. Kenneth West Lifetime Achievement Award Winner, Jon F. Hanson, chairman of HealthSouth.
Hanson and Britell treated guests to unique insights into the knowledge they have gleaned over their numerous years of corporate leadership experience throughout the two-day forum, along with numerous other C-suite and boardroom experts and advisors.
Joining Hanson onstage was HealthSouth CEO Jay Grinney in a discussion on fostering relationships between executives and directors that best benefit shareholders, moderated by George Davis, Egon Zehnder’s co-managing partner of the Global Board Practice George Davis. Hanson joined HealthSouth mere months before federal regulators began fraud investigations that resulted in five of the company’s previous CFOs pleading guilty and the firing of CEO Richard Scrushy. Today, the company has returned to prominence, benefited by Hanson and Grinney’s commitment to excellence.
“The most important thing a CEO has with a nonexecutive chair is someone who is familiar with the company, but is not a direct report that he can bounce ideas off of,” explained Hanson. The two describe themselves as having a strong chemistry; Hanson noted that Grinney is not much older than his oldest son. “We’ve never had a disagreement, we may have had differing views, but by the time we got off the phone we were on the same page,” he added.
The two have ironed out a process for communications with the full board, as well. Although Hanson is the primary contact for the board between meetings, who summarizes their ideas and concerns for Grinney, individual directors are always welcome to contact Grinney directly. “I am not the gatekeeper, nor do I want to be,” emphasized Hanson.
Grinney noted that an ideal chairman needs to have leadership skills, honesty, integrity and a clear perspective: “You need a nonexecutive chair who truly does not aspire to be CEO, that’s a key prerequisite.”
Director of the Year Britell also faced a dicey situation as a United Rentals board member in 2007, when the Delaware Courts ruled the rental equipment operator could not force Ceberus Capital Management to complete a proposed buyout of the company. The next year, she was named chairman. Britell also led the turnaround of GE Capital Mortgage Services as its CEO from 1996 to 2000.
Britell offered a glimpse into the best practices she learned from these experiences in a panel titled “Turnaround: Dealing with Distress,” one of which being the ability for challenges to unite a board. “Crisis enables faster changes,” she explained. “It forces a board to come together more quickly and more deeply when the only place you can go is up.”
Other panelists, including Levick Strategic Communications President Richard S. Levick and Blockbuster Director Gary Fernandes, noted that the important part of crisis planning is not to develop a plan for specific crises, but rather have a solid leadership structure that works both in good times and bad. “The board and senior management need to share critical values,” Britell said. “The board has a critical role to play but the buck stops with the CEO, even if there is a nonexecutive chair or lead director. They need a consensus on values more than the plan.” (For more on the D100 from the September 2011 issue of NACD Directorship, please click here.)
This year’s keynote was delivered by former U.S. Army General Stanley McChrystal, who now serves on the board of JetBlue, and shared what he learned about leadership as commander of the U.S. Forces and International Security Assistance Force in Afghanistan, and how he uses that knowledge now in the boardroom. He emphasized that a close relationship with allies is necessary for success, noting that situations where many organizations tasked with similar goals created unnecessary roadblocks. “Leadership is not a talent or a gift, it’s a choice,” he said.
Of the 300 forum attendees, a select group were also celebrating the completion of the required educational programs to become an NACD boardroom Leadership Fellow. Prospective NACD Fellows are required to have years of significant board service, and to complete a number of programs to earn the distinction. To learn more about the NACD Fellow program, please click here.