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Feature Great
ExpectationsDirectors & Boards authors do a pretty good job of predicting the future.. Ed Note: 2006 marked the 30th anniversary of Directors & Boards. A review of the archives turned up the following predictions made by our authors over the past three decades. You will see how these past authors peered into the future of business and governance with remarkable clarity. The citations include the author’s affiliation at the time of publication of the article, along with the article title and issue date. Those directors who serve on too many boards or whose available time is limited will resign. Outside directors will tend to be more independent of the management than is often the case today. -- Murray Weidenbaum, corporate director and Washington University professor, “Profile of the Coming Board” [Winter 1986] Over the next decade there will likely be a growing and productive linkage of directors’ compensation to shareholder value through the use of company stock in lieu of further increases in base pay. -- Yale Tauber, compensation expert, “Paying Directors for Performance: How to Do It; Who Should Do It” [Spring 1986] Where it has hitherto been fashionable for a company to boast how many workers it employs, it will be fashionable henceforth to boast how much work it has contracted out to others around the world. -- Anthony J.F. O’Reilly, president and CEO, H.J. Heinz Co., “Corporate America’s Next 20 Years” [Winter 1983] Compensation committee members will have to become more knowledgeable of executive compensation’s underlying principles and practices if they are going to meet their responsibilities to the company and shareholders. -- Fred Meuter Jr., compensation consultant, “What to Ask about Compensation” [Winter 1995] It is possible that individual directors and corporate boards in general may develop an informal understanding (perhaps even a “norm”) concerning the number of for-profit boards on which busy individuals can serve. -- William Bowen, president, Andrew W. Mellon Foundation, “Needed: Directors with Backbone” [Winter 1995] Word will spread rapidly about the performance of the new breed of women board directors, by virtue of the simple fact that every one of these women sits around a table almost every month with roughly six CEOs who, in turn, each serve on an average of three to four other boards with equal number of CEOs. By my calculations, every time a uniquely able woman joins the board of a company, over 100 CEOs are made privy to the contribution she is making. -- Felice Schwartz, president, Catalyst, “Beyond the First Generation of Women Directors” [Fall 1986] The era of generalist directors will be over. The global marketplace in a digital age has become too complex for amateurs. Directors will have to be experts in some area or areas. Otherwise they won’t be able to pull their weight. -- Robert Dilenschneider, chairman, Dilenschneider Group Inc., “The Board as a Think Tank” [Fall 1996] Terrorism will continue to be a problem in world stability. Despite the current quiescence in the Middle East, it will come back. -- L. Paul Bremer, managing director, Kissinger Associates, “Warning: Instability Ahead” [Winter 1993] Outside directors should have a substantial financial stake in the company to be eligible for appointment to the board. This is by no means a new idea, but so far it does not seem to have been seriously tested. The time may now be right to do so. -- Hugh Parker, retired managing director, McKinsey & Co. U.K., “Re-Empowering the Board” [Winter 1996] An emerging issue is immigration -- what employers, especially large employers, are going to do about undocumented workers. -- Vernon Jordan Jr., corporate director and partner, Akin Gump Strauss Hauer & Feld, “Reassessing the Role of Public Responsibility Committees” [Spring 1985] Directors can expect to be held increasingly accountable for the success or failure of a merger or acquisition. -- Mike Davidson, deputy CEO, and Heidi Kritscher Weller, senior consultant, Gemini Consulting, “M&A as the Ultimate Test of Governance” [Summer 1997] The idea that a board should be composed of the best available individuals who are compatible with the CEO will gradually recede. The new model will view the board as an organization that requires a portfolio of skills if it is to maximize its contribution to the venture. -- Joseph Grundfest, professor of law, Stanford Law School, and former SEC commissioner, “The Board as a Portfolio” [Fall 1996] We are going to see far more ongoing, preemptive, proactive restructurings versus what I’d call the one-shot, defensive, reactive-type restructuring. -- Peter G. Peterson, chairman, The Blackstone Group, “Seven Propositions for the Future” [Winter 1990] China will continue to make significant moves in the direction of a market economy, but a strong measure of government involvement in the economy will remain a fact of life. -- Virginia Kamsky, founder and CEO, Kamsky Associates Inc., “The Middle Kingdom’s Economic Might” [Winter 1993] Twenty years from today, as now, productive board service will remain an art, not a science. The director who will make a contribution will, then as now, combine high intelligence, relevant experience, character and judgment, with human relations skills of a high order. -- William Allen, chancellor, Delaware Court of Chancery, “The Corporate Board in Our Future” [Fall 1996] |
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