What’s Missing From the Board of Directors?

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On a Chicago stage, where the current production is “Enron,” the company’s Board of Directors are portrayed as three blind mice.  Certainly, the Enron Board’s epic failure is well documented, but more recent failures by various organization’s Boards of Directors (from Olympus to HP to Penn State to the Susan G. Komen Foundation) reveal an ongoing Achilles’ Heel that goes way beyond effective corporate governance.

Over my career, I’ve worked with countless CEOs — many of whom have correctly involved their Boards of Directors on matters of strategic importance.  And, to be sure, when large organizations face serious reputational issues, they often involve in-house corporate communications people and bring in external PR counsel.

But, I think a strong argument can be made that many serious issues could have been avoided or mitigated at the Board level before they rose to a crisis.  Corporate communications people have their fingers on the public’s pulse, so we can and do anticipate issues well and provide valuable insights into taking advantage of market opportunities.  The problem is: very few company Boards of Directors include executives with corporate communications backgrounds or expertise. This is a surprising and noteworthy omission.

Certainly, Boards benefit from the presence of executives with diverse corporate, financial and academic backgrounds.  And, many executives have solid instincts and experience dealing with communications/perception issues.  But, few of them are experienced in and attuned to identifying and addressing public perception issues at the early stages — when they are invariably easier and less costly to fix.

It’s difficult to find any public companies with communications executives currently on their boards of trustees (Yum Brands is a notable exception, but one wonders how active its board was in its Taco Bell subsidiary’s 2011 bruising battle with the plaintiffs’ bar).   Notably, among CEOs, only two — Brian Tierney (of Philadelphia Media Holdings) and David D’Alessandro (of John Hancock Financial Services) — immediately come to mind as having a PR background (vs. overseeing PR).

Would a PR person on HP’s Board have encouraged a more disciplined and thoughtful approach to  selecting CEO Mark Hurd’s successor?  Likewise, if a communications professional were on the Board at Olympus, what would they have recommended when’ CEO Michael Woodford asked the Board to investigate a series of acquisitions led by the company’s chairman?  Finally, though they eventually brought in outside PR counsel, how different would the recent fiascoes with Penn State and others have turned out if they’d had PR at the decision-making table?  I guess we’ll never know, but there are thousands of companies out there who would be advised to think more broadly when filling their next open Board seat.

 

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