Lucy P. Marcus

You’ve got to know when to go

Lucy P. Marcus
Jan 31, 2012 16:26 UTC

Hewlett-Packard has announced that Lawrence Babbio will be stepping off its board, and this comes hot on the heels of the news that Sari Baldauf would also not be standing for re-election. GlaxoSmithKline Pharmaceuticals has announced that James Murdoch will not continue to serve on its board. He has served on GSK’s board since 2009, on its Ethics Committee. Murdoch has been embroiled in controversy this year, which led to loud rumblings as to whether it was prudent for him to remain on the board.

This news brings to mind an issue that comes up time and again when independent board directors gather: inactive, unproductive, distracting or simply “dead wood” board members. It is often discussed in hushed tones, but it is time to address it openly and frankly, and to look upon it as the responsibility of each of us as individual board members, rather than simply an issue for the board or the board chair to tackle.

There are a number of reasons that you should consider stepping off a board:

You’ve served too long.

There is a finite amount of time that anyone can serve on a board in a truly independent manner, yet a surprising number of “independent” directors have served for 30-plus years. The UK Corporate Governance Code‘s guideline on this issue sets out nine years as best practice. It seems hard to fathom that independence would stretch to 36 years, the tenure of Coca-Cola board director James D. Robinson, or 41 years, as is the case with Douglas G. Houser, a director on Nike’s board. Questioning their length of service is not a reflection on their abilities as board members, but rather stating the obvious: It is impossible to remain independent and to serve for that long.

Your expertise is no longer required.

Flux is an integral part of business. Innovative companies shift their priorities and direction routinely, in large and small ways. The object is to have people around the table who reflect the expertise needed for today and tomorrow. As the business changes direction, it may be that the reason you were brought onto the board no longer exists. It is not personal, and it can be awkward to say, but if this is the case, recognize the change and make room for someone else whose expertise is a better fit.

You’re not pulling your weight.

No one joins a board with the intention of going along for a ride. Work and personal circumstances change, and sometimes interest simply wanes. If you find you are missing board meetings or committee meetings, or are not engaging in, let alone beyond, what you are duty-bound or required to do, it is time to look again. If you are “phoning it in” by attending meetings but not reading your board papers fully or are not participating in the meetings you do attend, you can guess that everyone around the table has noticed. Be honest with yourself and exit gracefully.

Lead from the front, or manage from the grave?

Lucy P. Marcus
Jan 26, 2012 00:00 UTC

In the past couple of months, several companies have gone through extreme and very public upheaval. Such transitions offer opportunities for fundamental, board-led change for the better, but they are also fraught with significant risks. Recent developments at RIM and Yahoo help illustrate three pitfalls: “managing from the grave,” sequence and timing, and misplaced suspense.

Managing from the grave

One of the big risks at a time of transition is that those who leave the helm of the company are tempted to “manage from the grave,” being more concerned about their own individual legacy than that of the company.

For example, BlackBerry maker Research In Motion (RIM) has finally rid itself of its founders’ disastrous co-CEO/co-chair setup. Yet the stamp of the old management team is still very much in evidence. The founders continue to have a strong presence in the company, with both remaining as board members, and Mike Lazaridis staying on to head a newly created innovation committee.