At NACD’s inaugural From Battlefield to Boardroom program, more than 50 retired or soon-to-retire admirals and generals learned how they could apply leadership, organizational and global strategy skills honed by years of military service into new careers as corporate directors. The program highlighted the importance of integrity and courage in the boardroom, and featured senior business leaders and former military flag and general officers who now serve on corporate boards.
The program, supported by Korn/Ferry International, KPMG and Broadridge Financial Solutions, was the first step in each attendee’s plan to transition their military service into the boardroom. Said Ken Daly, president and CEO of NACD: “It has been an honor to share our more than three decades of research and experience with these accomplished men and women. We are confident that their leadership, integrity and strategic insights will play a valuable role in their future governance positions.”
Seeking a Board Seat
“You know a lot about winning teams. You know a lot about leadership. We trust your judgment. You’re great in not only crisis management, you’re great at crisis prevention,” said Robert E. Hallagan, Korn/Ferry International Board Leadership Services vice chairman and managing director, praising participants at a panel discussion titled “Positioning Yourself for Boardroom Service.” But, he added, “we don’t know you that well.” Hallagan emphasized that both flag officers and search firms need to join together to increase companies’ awareness of the unique skill sets former military leaders can bring to the boardroom and other leadership positions.
“If the client says, ‘I want someone from the military,’ that’s easy,” Hallagan said. “I would much rather be more proactive with our clients and say, ‘These are the skills of people from the military. Wouldn’t it be valuable for every board to at least consider having someone with [those] personal attributes and skill sets?’”
Patricia Tracey, U.S. Steel director and a retired vice admiral of the Navy, noted that the courage and determined mind-sets of former officers are essential board assets. “We have a practice of accountability in advance,” she said. “We don’t believe failure is an option, and so we tend to work to find the crisis before it’s going to happen and help people figure out how to head it off, how to have alternative courses of action. We rarely want to end up in a place with no exit strategies.”
More From Battlefield to Boardroom Coverage:
When seeking a board seat, retired flag officers can frame this strategic mind-set and their reputation for integrity, ethics and experiential wisdom to companies, with an awareness of the industry even if they have not yet attained much hands-on business experience, Hallagan noted.
“There are rich, rich experiences that are very relevant to what goes on in the boardroom,” said Tracey. “But it’s typically not represented in our job titles. It’s inside the job titles. It’s the specific things that we did in different jobs that begin to have great relevance.”
Understanding the Key Committees
From strategic planning to finance, there is no shortage of committees that boards can establish. However, there are three that are required for a company to be listed on the NYSE or Nasdaq: audit, compensation, and nominating and governance.
In one panel discussion, John Atkinson, partner at KPMG Audit Committee Institute; Stuart R. Levine, chairman and CEO of Stuart Levine & Associates, director at Broadridge Financial Solutions and Single Touch Systems, and lead director of J. D’Addario & Co.; and Peter R. Gleason, NACD managing director and CFO, highlighted the functions of each of these committees for aspiring directors.
The Audit Committee: This committee is tasked with directly overseeing internal audit and external audit. On average, committee members hold 5.6 meetings annually, with an average of three hours per meeting, in addition to three phone meetings per year. Committees are required to have one member with financial expertise and other members with financial acumen and independence.
Atkinson noted that there is an increasing need for the audit committee to drive tone within management, explaining that if a mid-level finance person at a subsidiary sees something he or she doesn’t like, the board and senior management should be confident they have created the right culture for that person to speak up.
When it comes to the expectations of the audit committee, Atkinson stated that it’s essential for members to understand the financial attributes of the company and the economics of the business. He recommended reading 10-Ks, specifically the section that discusses risk factors, to understand how these risks can impact the performance of the business, as well as using the company’s audit partner as a resource.
In terms of financial risk oversight, the only requirement within the audit committee is that it ensures a risk process is in place, but the risk discussion and the risk response are generally more appropriate at a full board or governance committee levels, Atkinson said.
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