Succession planning for C-suite and board positions is not just a checkbox on an organizational to-do list; it’s a strategic imperative that can determine a company’s future success or failure. When done correctly, it ensures a smooth transition of leadership, maintains organizational stability, and preserves the company’s culture and strategic direction. When done poorly (or not at all) it becomes a reactive and chaotic exercise resulting in far-reaching consequences for the organization.

Part 2

In Part 1 we noted the distinction between a Strategy and a Plan and provided some backdrop for the development of a Strategy.  We noted that there is a necessary exercise to know the company- why does it exist, what does it really do, what are the opportunities (and the risks) that surround the business, and no less important, what are the risks to the Strategy?

Here, we will now ask the existential question, “what will the company be when it grows up?” and lay out some of the actions that can help answer that question.  Reminding ourselves that the Board has a duty to make certain the company has a Strategy, Management has the responsibility of developing the Strategy and ensuring the Board agrees with and will support the Strategy.  Management, then, has the further responsibility of developing the Plan to implement the Strategy, and the Board has the oversight role to consider if the Plan is feasible, supportable, and acceptable within known constraints and will deliver on the Strategy- reaching the waypoints earlier described.  Management has the enduring responsibility of making that test before the Board does, and to develop and implement any corrective actions needed to maintain the trajectory of the Plan.

Understanding governance and its relationship to family business legacy is critical for family and non-family board members and advisors.

"Renoirs in our Attics”- Implications for Intellectual Property in the Corporate World

Why Have a Strategy?

We all are familiar with the old adage of Boards being “noses in, fingers out” and can appreciate that the primarily responsibility of a Board is to NOT run the company.  Far too many boards blur the line between management and oversight.  Here, we present the concept that It is critical to differentiate between strategy and strategy implementation.  Rather, the Board is responsible for ensuring an appropriate strategy and to ensure the executive team is running the company correctly and following the path outlined in the strategy.  Moreover, there is the enduring obligation to represent and protect the interests of shareholders - we know this as a fiduciary responsibility.

We also know that the Board has a responsibility to ensure that governance is discharged effectively.  One element of the governance spectrum of duties is to oversee the development and execution of a strategy for the enterprise.  Depending upon the company, Board composition and industry, the development of Strategy can often be delegated to a Board committee or a hybrid model that includes corporate membership.  There is not clear agreement about who makes the strategic choices that will shape the trajectory of the company.  To clarify, the “noses in, fingers out” doctrine suggest that the Board is not responsible for the development of the implementation plan.  They are, however, responsible to ensure one is developed, and then to evaluate the progress of the enterprise against that plan within the context of the strategy.

Recently, I found myself at the terrifying intersection of AI, cyber threats, phishing, the Internet, and CrowdStrike®—a collision that’s unnerving on a personal level but downright apocalyptic when you consider its implications for an entire company.

Artificial Intelligence (AI) is transforming the landscape of recruitment across various sectors, including the selection of members for both Advisory and Governance Boards in private companies. The promise of AI-driven hiring solutions lies in their potential to streamline processes, reduce costs, and enhance decision-making through advanced data analysis.

1. Why do you want to serve on a board?

Understanding your motivation for wanting to serve on a board is crucial. This introspection goes beyond simply stating a desire for career advancement or new experiences. It’s about identifying a deeper purpose that aligns with both your personal goals and the needs of the organization. For instance, you might be an expert in operational excellence, possessing a wealth of experience in streamlining processes and improving efficiency. In this case, your motivation might stem from a desire to apply these skills to help a company build a robust, long-term operational strategy.

A company’s tax expense in the US can be as high as 25-30% of its pre-tax US taxable income, and is one of the largest expense items on a company’s P&L. Thus, effective tax management plays an important part in optimizing profitability and cash flow. Board directors of a US-based multi-national company (“MNC”) should ideally be aware of the tax environment their company is operating under in 2024 and beyond. This article identifies five most important trends for any board director of a US MNC to consider. 

The Private Directors Association (PDA) is proud to announce the appointment of Jean Vernor as the President of its Detroit-Toledo-Windsor Chapter. With her extensive leadership experience and commitment to business transformation, Vernor is poised to lead the Detroit-Toledo-Windsor Chapter to new heights, reflecting the city’s dynamic business landscape. Vernor succeeds Kimberly Rodriguez, who has served as Chapter President since 2020.

San Diego, California. Thirty years ago, a modest grocery business was founded by John Woods. Throughout the years, his tireless effort turned a small company into a strong organization led by John and his wife. For the past ten years, their offspring Tony, Maria, and Bill have been running the company from different management positions, employing more than two hundred people with twelve stores across the city. It was a natural step for the Woods children to come to work in their father's store after they graduated. Even in their late fifties, they look back at their choice to join the business with no regret.

“Networking is the No. 1 unwritten rule of success in business”

Meghan serves as President and Chief Data and Analytics Officer at Three Arc Advisory. She also serves on the Advisory Board of the Athena Alliance, a private for-profit organization in the US. In August 2023, she joined the Private Directors Association’s Chicago Chapter and sits on the National Cybersecurity Committee and the Chicago Chapter Programming Committee.

This is the first of three blog posts that will address certain key issues that the Board of Directors of an Employee Stock Ownership Plan (“ESOP”) owned company need to focus on: (1) Fiduciary Duties and Standard of Care; (2) Conflicts of Interest and Independent Directors; and (3) Unsolicited Offers.  The focus of these blog posts is on the difference between issues in ESOP owned companies, compared to privately owned companies.

During the last decade or two, boards have become newsworthy. Questionable practices, a string of missteps and failures of various kinds, and sanguine CEOs and assertive executive teams that 'take over' have seen boards become highly topical, targets of both curiosity and criticism in the business media and, increasingly, the wider public. While public companies have garnered most attention, private companies and family firms have not been immune to missteps and failure.

Be it as a board director, advisor, or executive, it is unfortunately common to witness teams and individuals fail to put forth the necessary resources and effort to meet the full measure of expectation in their elected or appointed role. This results in a breach of the fiduciary responsibility, but also a failure to the spirit of the governance role. I believe this to be witnessed and understood as a frequent reality by many aside from myself. Boards and organizations will set an expectation for a desired outcome, then fail to fully commit the resources or time necessary to accomplish the outcome. Individuals may initially drive towards a goal, but then enthusiasm wains. This behavior can apply equally to processes as to goals. Process improvement systems have a full cycle of gaining understanding, execution, and follow-up, yet many times one or more of these steps are skipped. Why is this? Why is it so prevalent in the professional circumstances we find ourselves in?

Artificial Intelligence (“AI”) is revolutionizing the world, akin to past innovations such as electricity and the internet, profoundly impacting global society.  AI stands as one of the most transformative, beneficial, and concerning technologies of our time, and while some embrace its potential for improving humanity, others caution against its perceived threats, echoing the same debates attending the emergence of the internet and other potentially disruptive innovations.

Denney’s and Petree’s Transformative Leadership Approaches and Proven Experience in Growing Organizations to Elevate PDA’s Houston Chapter

The Private Directors Association (PDA) is pleased to announce the appointment of Kim Denney as President and Jennifer Petree as President-Elect of its Houston Chapter. With a proven track record of helping companies define and realize their next stage of growth, Denney and Petree bring a wealth of experience and expertise to guide PDA’s Houston Chapter to new heights.

The role of a company's Board in interpreting, challenging, and guiding enterprise strategy incorporates responsibilities and actions to ensure strategic success and long-term value. The Board's fundamental mandate involves providing insight, foresight, and oversight on critical issues that drive the company's governance as it advances its Strategy, operations, financial performance, and stakeholder engagement. Effective boards are characterized by a compelling mission, a transparent engagement model, and impactful information practices, forming the foundation for Board value delivery. They honor core leadership values and skills, such as solid ethics, integrity, and a commitment to progress, while embracing a learning mindset and entrepreneurial energy.

The contemporary business landscape is a dynamic arena where success is not merely a destination, but an ongoing journey marked by ever-evolving market dynamics, shifting customer preferences, and relentless competition.  As such, boards of directors (BODs) and the organizations they support need more than traditional strategies and decision-making processes.  They require a guiding force to help them set the organization’s future direction.