It’s been 10 years since the dark days of Enron and WorldCom exposed massive failings in corporate
governance. Today, most Boards of Directors are very different in composition and accountability but
one change is proving stubborn: increasing the number of women directors.

Studies have unfailingly identified a dual-gender board as superior to the exclusively male convention.
As a result, the absence of women in the boardroom has drawn critical involvement by activists and
politicians.

In the U.S., Fortune 500 companies are being criticized for having only 16.1% of directors as females;
among Canada’s FP500, representation by women has grown only half a percentage point in the last two
years (to 14.5%); in the U.K., Prime Minister David Cameron says he will “not rule out quotas” as a way
of getting more women onto Boards and also into top executive jobs.

This discrepancy has become a focus of Cornerstone International Group, one of the top four global
executive search organizations with head offices in Los Angeles.

“Our practice group for corporate boards goes back to the 1980’s,” says founder, Chairman, and CEO C.
William Guy. “We offer board assessment, consulting and search with a specific focus on diversity and
gender issues.”

Among CIG’s offices in 45 countries , Spain is one of the most pro-active in women’s board issues. The
member firm, ExcellentSearch, founded a Division of Women on Boards three years ago.

“There are many, many studies identifying the benefits of having women Directors,” says Founder and
CEO Elena Terol. “Gender-diverse boards promote greater vigilance over financial reporting and women
understand the needs and thoughts of women customers and employees better than men.”

Terol’s firm has one of the largest and most up-to-date databases of women interviewed to serve as
board members and she fields queries from around the world. Globally, Cornerstone offices walk the
talk with roughly one-quarter managed by women.

Nationaly, Spain lags behind in women’s Board representation with only 11%, but other countries are
starting to forge ahead. The top 100 companies in the UK, facing a government mandated target of 25%
by 2015, reached 15.6% last year, up from 12.5% the year prior. The Nordic-Baltic countries are far in
front: women hold a quarter of boardroom posts in Sweden and in Norway, where quotas came into
force in 2008, the allocation is 40%.

“The recent financial crisis has naturally pushed diversity issues off the front burner,” says Elena Terol
in Madrid. “But it is also true that this crisis leaves Boards needing still greater oversight. Our research
confirms that Board diversity is key to restoring trust.”

More information regarding Women on Boards and other Cornerstone Practice Groups can be obtained
from:

North America
CEO William Guy at
billguy@cornerstoneintl.com

Europe:
CMO Ian Day at
IDay@bkcornerstone.co.uk

Who quietly enforces internal standards of behavior and decorum at the world’s biggest
corporations — standards even the CEO must meet? The corporation’s board of
directors, says the March issue of online governance monthly Boardroom INSIDER.

“Boards play a little noted, but crucial role as the enforcers of propriety within the
company,” writes BI editor and business commentator Ralph Ward. The ouster of
Wynn Resorts director Kazuo Okada on suspicions of illegal foreign payments, and
the “jumped or pushed” departure of Stryker CEO Stephen MacMillan over an office
romance are some recent incidents — and among the few outsiders ever hear about.

Ward writes that boards are often (and justly) criticized for being passive. But, he
adds, “directors can be the first to smell that something is not right in the actions of the
CEO, or one of their own.” The board of directors has a sixth sense for mischief that
prompts them to lose faith in a CEO, perceive danger, and suspect what shareholders,
regulators or reporters will think before anyone else. “They may misread the
situation, act too soon, or sometimes too late,” notes Ward. But he observes that the
board’s “sixth sense” is often surprisingly effective in heading off corporate scandals.

At their best, most meetings are a waste of time. Instead of inspiring and enabling, way too many of them actually drain participants’ willingness and ability to do real work. Yet QlikTech has found a way to turn its annual corporate summit into a positive, culture-building and culture-reinforcing event that everyone looks forward to.

When I spoke with QlikTech CEO Lars Bjork for a previous column, he told me that he is “absolutely convinced that (their annual summit) is one critical element to their having been able to sustain a 50 percent Compound Annual Growth Rate for five years.”

Brand Experience

With that claim in mind, I eagerly accepted QlikTech’s invitation to attend this year’s summit as their guest. From the first drumbeat and emotion of the opening session stories, it was clear that this was no ordinary meeting. QlikTech’s head of brand management, Pelle Rosell, has put together each of the 13 summits that QlikTech has had, from the first ski trip with 40 employees to this year’s gathering of 1,100 employees in Cancun, Mexico.

Pelle says the event itself is not important. What matters is the “brand experience.” Each gathering is the “starting point of every year’s journey.” For Pelle, enduring branding requires an intersection of organizational values and brand values. He says branding is about belonging. Customers and employees don’t so much buy a brand or work for a company as they join it.

Culture as a Journey

For QlikTech, the summit is one critical element in that journey, but just one element. I asked QlikTech’s Chief People Officer Paul Farmer about the other elements:

First and foremost, you have to believe what you’re saying.” This company believes from top to bottom that, “being values-based will deliver performance of people and business.”

When a company starts, its culture is its founder. As it grows, people watch the founder or CEO and follow his or her behaviors, relationships, attitudes, values and environment. At some point, growth means more people, functions, geographies and complexity across all sorts of dimensions. Along the way, the transmission of culture becomes less personal and more systemic. As Bjork put it, “I used to be able to greet everyone by their first name in the morning. I can’t do that anymore.”

Hence the need arose for a chief people officer and a related team  to focus on maintaining, evolving and strengthening QlikTech’s winning behaviors not by controlling all the details, but by putting up “guard rails.” In particular, Farmer says it’s important to embed the company’s cultural preferences in core processes like recruiting (values-based), onboarding (leveraging the Qlik Academy), performance management, development (including the annual summit), succession planning and decision-making. The more they can do this in a natural way, the more things will stick.  This is important because culture is the only truly sustainable competitive advantage.

Rosell likens it to Swiss cheese. As he describes it, culture starts at the top and becomes real in the behaviors of the people on the front line. Middle management is there to transmit ideas and help (inspire and enable). Middle management needs to be a conduit for communication, just like the holes in Swiss cheese are conduits for air. You need to make sure the holes are big enough to allow the important information to pass through, which brings us back to meetings as one of the main conduits of information flows. Therefore:

5 Steps to Effective Meetings

1. Context. Understand the meeting’s place in the broader journey. It’s not about the meeting itself, or even the meeting experience. It’s about how the meeting moves its participants forward along the path and fits with everything else.
2. Objective. Set an overall single objective for the meeting and clear expectations for learning, contributions, and decisions by agenda item and attendee in order to align with the single objective and with the meeting’s place in the broader journey. (Follow this link for more on the “learn, contribute and decide” model.
3. Prework. Make sure to get appropriate pre-work and pre-reading to people far enough in advance for all to learn/contribute to their fullest potential.
4. Delivery. Manage meeting participation and timing to optimize learning, contributions and action-oriented decisions.
5. Follow-through. Get meeting notes out promptly to memorialize decisions and actions, kicking off the preparation for the next meeting and implementation of decisions and actions.

This is a good example of step 5 of The New Leader’s Playbook: Drive Action by Activating and Directing an Ongoing Communication Network (Including Social Media)

Everything communicates. You can either make choices in advance about what and how you’re going to communicate or react to what others do. It is important to discover your own message and be clear on your platform for change, vision, and call to action before you start trying to inspire others. It will evolve as you learn, but you can’t lead unless you have a starting point to help focus those learning plans. Identify your target audiences. Craft and leverage your core message and master narrative. Monitor and adjust as appropriate on an ongoing basis.

The only three true job interview questions are:

1.  Can you do the job?

2.  Will you love the job?

3.  Can we tolerate working with you?

That’s it.  Those three.  Think back, every question you’ve ever posed to others or had asked of you in a job interview is a subset of a deeper in-depth follow-up to one of these three key questions.  Each question potentially may be asked using different words, but every question, however it is phrased, is just a variation on one of these topics: Strengths, Motivation, and Fit.

Can you do the job? – Strengths

Executive Search firm Heidrick & Struggles CEO, Kevin Kelly explained to me that it’s not just about the technical skills, but also about leadership and interpersonal strengths.  Technical skills help you climb the ladder.  As you get there, managing up, down and across become more important.

You can’t tell by looking at a piece of paper what some of the strengths and weaknesses really are…We ask for specific examples of not only what’s been successful but what they’ve done that hasn’t gone well or a task they they’ve, quite frankly, failed at and how they learned from that experience and what they’d do different in a new scenario.

Not only is it important to look at the technical skill set they have…but also the strengths on what I call the EQ side of the equation in terms of getting along and dealing or interacting with people.

Click here for more on interviewing and being interviewed for strengths

Will you love the job? – Motivation

Cornerstone International Group CEO, Bill Guy emphasizes the changing nature of motivation,

…younger employees do not wish to get paid merely for working hard—just the reverse: they will work hard because they enjoy their environment and the challenges associated with their work…. Executives who embrace this new management style are attracting and retaining better employees.

Click here for more on interviewing and being interviewed for motivation

Can we tolerate working with you? – Fit

Continuing on with our conversation, Heidrick’s Kelly went on to explain the importance of cultural fit:

A lot of it is cultural fit and whether they are going to fit well into the organization…  The perception is that when (senior leaders) come into the firm, a totally new environment, they know everything.  And they could do little things such as send emails in a voicemail culture that tend to negatively snowball over time.  Feedback or onboarding is critical.  If you don’t get that feedback, you will get turnover later on.

He made the same point earlier in an interview with  Smart Business, referencing Heidrick’s internal study of 20,000 searches.

40 percent of senior executives leave organizations or are fired or pushed out within 18 months. It’s not because they’re dumb; it’s because a lot of times culturally they may not fit in with the organization or it’s not clearly articulated to them as they joined.

Click here for more on interviewing and being interviewed for fit

Preparing for interviews

If you’re the one doing the interviewing, get clear on what strengths, motivational and fit insights you’re looking for before you go into your interviews.

If you’re the one being interviewed, prepare by thinking through examples that illustrate your strengths, what motivates you about the organization and role you’re interviewing for, and the fit between your own preferences and the organization’s Behaviors, Relationships, Attitudes, Values, and Environment (BRAVE).  But remember that interviews are exercises in solution selling.  They are not about you.

Think of the interview process as a chance for you to show your ability to solve the organization and interviewer’s problem. That’s why you need to highlight strengths in the areas most important to the interviewers, talk about how you would be motivated by the role’s challenges, and discuss why you would be a BRAVE fit with the organization’s culture.

This is a big part of step 1 of The New Leader’s Playbook: Position Yourself for Success

There are several components of this including positioning yourself for a leadership role, selling before you buy, mapping and avoiding the most common land mines, uncovering hidden risks in the organization, role, and fit, and choosing the right approach for your transition type.

Search firm Cornerstone International Group has launched a new division, “Women on Boards,” to reinforce women’s presence on international boards of directors. The new division will be headed by Eva Levy, previously chairman of the FEDEPE (the Spanish Federation of Female Executives and Entrepreneurs), and is based at Cornerstone Madrid, Spain.

Source: Directors and Boards

An Interim Manager shares his view of the Interim market place…

How did a career as an Interim Manager first present itself to you?

It was suggested to me as an option by a colleague at KPMG where I worked at the time. The step into the interim market was made easier by having worked in Professional Services as, in many ways, there is a similarity in the way of working – variety of clients/sectors, short lead times to come up to speed, and also the uncertainty of knowing where the next piece of work was coming from.

What have been the difficulties that you have found in getting established in the market?

Initially, it is the lack of a regular pay cheque and the gaps between roles. I think this is something that becomes less of an issue with experience and of course it helps to have a financial cushion when you start out. Increasingly, having established my CV as an interim manager, I can be more selective about the roles I take on and have flexibility on day rates.

What have you found to be the best way to secure new assignments?

This has been something of a learning curve. My own high quality network was certainly advantageous at the outset, as those people who have worked with me before or been recommended to me have a broader view of my abilities than the recruitment businesses. Whether it’s to pander to client demand or lack of insight into the transferability of skills, many recruitment providers seem to pigeon hole you quickly. The other frustration is trying to find out what’s happening with an opportunity – you want to know what’s happening but equally don’t want to be seen as a pest.

What have you learnt about yourself since becoming an interim manager?

Not to undervalue my skill set and wide range of experience. Feedback from an MD after completing an assignment reminded me of the impact that I can make quickly to a business. In many ways it confirmed what I already knew but the MD was impressed with the speed with which I was able to pick up the key issues and run with things. Clearly confidence and technical ability are essential but my own specific experience also makes it somewhat easier for me to quickly determine the key business drivers and begin to bring real value to the client.

What’s been the most satisfying experience as an interim manager?

A recent assignment saw me pulling on my many years of experience of the Capital Markets but this time I was sat on the client side and could quickly see the problems and solutions from the company’s perspective.

What professional ambitions are you still looking to achieve these days?

To continue the success of my Interim business and enjoy the work I do.
Many thanks.

Here are the results for the Cornerstone 2010 Senior Management Survey.

Dear friends,

I am delighted to inform you that the Founder, CEO and Chairman of Cornerstone Int., Mr. William Guy, will be visiting Athens on June 14th to meet with selective local business leaders.

 A review by Murray Parker: In February 1999, James Kristie, Editor Directors and Boards, addressed the Institutional Shareholders Services Annual Client Conference about board trends over the then-past 30 years.

At that time he noted six main trends that have now become common practice:

1. Outside Director Majority – is now a reality across all public companies today with at most three and preferably one inside officer seat, the CEO.
2. Smaller Boards – The 16 -25 seat behemoths of 30 years past have given way to 10 or less directors on current day boards.
3. Less frequent meetings – From historic monthly meetings, boards have progressed to an average of 6 meetings a year, some as few as 4; while communication outside meetings has increased.
4. Board Diversity – Women and ethnic minority participation continues to grow; now facilitated by the trend to reach beyond CEO’s to tap senior executives and functional specialists for board seats.
5. Compensation – From a time when only 4% of companies compensated their directors with some form of stock we have transitioned to the time when all board members have equity participation.
6. The Nominating Committee – has risen out of obscurity to now be one of the core committees along with audit and compensation.

Other Trends noted by Kristie as possibilities are now also commonplace:

• Formal CEO performance reviews are conducted by the board
• Boards review performance of their own
• It is the norm for the retiring CEO to leave the board and for many companies now, a requirement
• CEO’s and directors are required to have equity participation in the company
• Directors meet without the CEO
• Committee chairs and members are selected by the board, not the CEO
• The number of inside directors continues to decline; in many cases the only inside director is the CEO
• Written statements of corporate governance policy have become commonplace
  With widespread adoption of these evolutionary – but at times accelerated – changes of the past 30+ years, what issues and trends face public companies in the future?

First, one must acknowledge external regulatory influence from Sarbanes-Oxley (SOX) legislation. During recent years, boards and officers have been preoccupied with issues of compliance driven not only by rigorous – and some would say onerous – requirements of law but also by a genuine desire to avoid the highly publicized improprieties exemplified by the meltdown of ENRON. Directors have not wanted to appear asleep at the switch nor have they wanted to permit their integrity to be inadvertently compromised by actions of management.

Change has not come easily, but the work of implementing new standards is largely complete; allowing boards to re-emerge as a sounding board for management. They are once again able to focus on providing strategic direction. Not that compliance is any less important, but the processes are now in place for its maintenance. Directors can once again be architects for business growth.

In the same vein, Governance will recede as a hot button issue. Still a primary concern of the board, it will no longer be the obsessive focus of recent past. Processes are in place, boards have established a more proactive posture and management now expects more thorough probing. Having gained some comfort with these new roles and boundaries, boards will spend less time defining governance and more time providing it.

The remaining regulatory issue for boards is executive compensation. The recent SEC guidelines provide a pathway to connect executive compensation with performance. That leaves compensation committees with the dilemma of crafting controls for executive compensation in the face of an escalating competitive market for top executive talent.

A historic issue that will continue to linger within the awareness of the individual director is risk management. In spite of new systems and vigilance, there always remains an unknown risk factor, that nagging concern that something has been overlooked; something that has the potential to put the company and/or individual directors in jeopardy.

But let’s take a moment to peer into the future and examine new trends that are unfolding as companies and boards face new competitive pressures in a healthy global economy.

• There is a trend to globalize boards with US based directors that have substantial international experience. Growing global interconnectedness and fewer meetings have improved the feasibility of also including overseas residents on the board.
• Fewer outside directors will be active CEO’s for two reasons: 1) Companies are limiting the outside directorships their CEO can pursue as their primary job demands more attention. 2) Boards are seeking more specific functional experience to build an effective team that can address and formulate corporate strategy.
• The talent pool will expand as companies reach down the ranks of senior and business unit executives or functional specialists. Diversity will also increase in the broadening talent pool.
• However, filling vacancies will not be any easier for at least three reasons. 1) Larger pool or not, many candidates are reluctant to serve. They are exercising much greater due diligence about the companies recruiting them. 2) Candidates are also far more critical and objective about their ability to contribute. 3) The overwhelming reason why most candidates decline new seats is the lack of time.

Bottom line, the fun seems to be returning to directorships. I hear excitement and enthusiasm among directors for their business as they sink their teeth into strategy, innovation and competition. Historically, boards jumped-to only when there was a problem. Now, boards are more proactive strategic partners engaged in the long term success of the business. They are taking care to set the tone for the company and forging more productive relationships with management. The result will be healthier business and more long term value for shareholders; a true Franklin Covey win-win.

Resources:
1. Board Trends 1970’s to the 1990’s: “The More Things Change…” by James Kristie, Editor Directors & Boards.
2. Board trends for 2006: It’s back to the future… an interview with Theodore Dysart, Heidrick & Struggles.

Gender-based diversity has been discussed for many years, but there seems to be much talk and very little action on correcting the imbalance we see today. In recent reports, representation of women in senior management and at board level is unchanged and, in some cases, has reduced. This to me is a strange phenomenon, suggesting that we refuse to recognize reality.

We know that women represent 50% of the population; they live longer and statistics show that they achieve higher levels of education than men, more so than in past years. Most University programmes have a higher percentage of female students than males, even in the traditional male-dominated areas of engineering and the sciences.

One would think that with half the “market” being female and therefore half an organisation’s clients or customers being female, there would be a greater interest in understanding that potential client base in order to tap into that market.

As males are we so arrogant as to believe that we know how males and females think? If this is so many psychologists and the writers must have it wrong; and if you think males and females think the same way try decorating a room together! It is my view, and this is supported by many successful organizations globally, that gender diversity within organizations delivers performance benefits, and this is beginning to gain acceptance in New Zealand. Despite this acceptance, the statistics are unchanged.

Often with senior management positions that I am briefed on clients look for specific levels of experience, unfortunately, women can be ‘lost’ to the workforce for months or even years as they take on key child-raising functions at home. In doing so they fall behind the experience ‘eight-ball’ and can tend to miss out on the senior positions, not because of lack of ability but through a lack of experience.

So competent, skilled women miss out on opportunities because other candidates have greater, though not necessarily better, experience. This is not a criticism of a company’s recruitment practice as companies must recruit the best possible people for all roles in their organization, but in an environment where candidates are difficult to source, companies need to look at new strategies to solve the problems of recruitment and retention.

Some of my clients, who in my view have embraced diversity at all levels of management, have also been successful in retention, reducing the need to recruit by introducing more flexible employment practices. When an employee takes maternity leave, as part of a package, or when they return to work, they are offered the opportunity to structure their work in a way that meets both the company’s needs and the needs of their family. These can be simple options such as reduced work hour contracts, flexible work times to fit around the school day or facilitating work from home arrangements. Other organizations have established crèches or subsidized child care.

An interesting aspect of this approach is a level of commitment and loyalty that is engendered within all employees and in particular those accepting this option.

As a headhunter I have found potential candidates unwilling to leave organizations that offer such flexibility in employment options. From the client perspective it is common for someone on a 20-30 hour week contract to put in more than 40 hours, and often these employees are much more productive. The long-term benefit is that these women are not lost to the organization or to the workforce. Their careers are retained for the future and they don’t suffer from the ‘lack of experience’ syndrome that acts as a barrier to senior management roles and beyond.

This ‘beyond’ for women in relation to directorships and broad appointments shows very poor prospects. Very few career-minded women get an opportunity to serve at this level and, in my view; the business world is the poorer for it. Currently board members are appointed in quite secretive ways apart from the SOE’s and the Local Authority Trading Enterprises where often professional recruiters are used to identify top candidates for board appointments.

When you look at the current structure of boards there is an over-representation of over-55 year old males, and of accountants and lawyers. Why is this the case? Well, because they look to appoint solid, risk-averse and trustworthy individuals. But does this necessarily make for good board members? Well, that depends on how the role of the board is perceived. If the board is there to define strategy and support and mentor the senior management team in delivering that strategy, it may be wise to take a broader brush to the recruitment of board members and to build boards that have experience and skills in the sector in which the entity operates. For example, engineers are potentially more useful in an engineering organization than lawyers, and similarly, marketers to marketing companies.

It is relatively easy to find the risk management skills of accountants and lawyers as you require them, rather than have them holding permanently on the reins of the business. As women gain greater experience and exposure at senior management level and the approach to the board’s selection processes change, we will find women are being appointed to boards and having the opportunity to shape the future and to impact on the governance of organizations.

It is my view that organizations will benefit from better performance and through a stronger culture, by following such flexible work practices. Having women continue their careers will in turn benefit them for the time when they wish to return to ‘full-time’ roles. I believe that once women are seen filling senior roles, they will be identified as having a real contribution to make in strategy and governance as directors.