2011 Leadership Summit

On Octo­ber 6, Mark Lon­er­gan brought togeth­er a group of pub­lic com­pa­ny tech­nol­o­gy CEOs to dis­cuss the lit­tle-stud­ied top­ic of CEO/​Board com­mu­ni­ca­tion. The event was mod­er­at­ed by two statured lead­ers in the Sil­i­con Val­ley — Ned Barn­holt (Chair­man, KLA-Ten­cor) and David House (Chair­man, Bro­cade), both for­mer pub­lic com­pa­ny CEOs them­selves who were able to offer per­spec­tives from all sides of the board­room table.

This event was a net­work­ing and edu­ca­tion­al forum for CEOs to learn to make their boards a key com­pet­i­tive advantage.

Mark Lon­er­gan, Founder & Senior Part­ner, Lon­er­gan Partners

The Event Was Intimate - and Lively

The inti­mate dis­cus­sion over din­ner revolved around defin­ing the most effec­tive roles for the CEO, the Board Chair, and the oth­er board mem­bers. The goal for the evening was to cre­ate new insight into how CEOs can improve their effec­tive­ness by man­ag­ing their rela­tion­ship with the board of direc­tors, and espe­cial­ly their rela­tion­ship with their company’s inde­pen­dent board Chair.

Some Key Take-aways

  • Boards have three major respon­si­bil­i­ties: hir­ing the CEO and decid­ing when to ter­mi­nate the CEO, authen­ti­ca­tion of oper­at­ing results, and pro­vid­ing advice and coun­sel to the CEO.
  • Chair­men are emerg­ing as lead­ing spokes­peo­ple for today’s Boards. The best Chair­men fil­ter and focus input from var­i­ous board mem­bers and pass it along to the CEO in a steady stream of input.
  • Board mem­ber­ship is turn­ing over much more often than in the past. As the SEC man­dates short­er terms for board mem­bers, this trend is like­ly to accelerate.
  • While CEOs have no offi­cial role in the selec­tion of a board mem­ber, they need to close­ly work with their boards before new mem­bers are select­ed. Fail­ure to do that can con­tribute to dys­func­tion and under­per­for­mance in key board functions.
  • A new pub­lic com­pa­ny CEO needs advice and guid­ance, espe­cial­ly from the more expe­ri­enced exec­u­tives on the Board. The CEO role can be com­pared to an appren­tice­ship, where the mas­ter crafts­men’ can con­tribute to the devel­op­ment of the CEO.
  • The work of the com­pen­sa­tion com­mit­tee has become much more com­plex over the past five years, and their rec­om­men­da­tions more contentious.
  • Inde­pen­dent board rat­ing ser­vices (like ISS) do not gen­er­ate infor­ma­tion of much val­ue to investors with respect to com­pa­ny per­for­mance and board composition.
  • The CEOs attend­ing report­ed find­ing the evening a valu­able forum for learn­ing how they might work more effec­tive­ly with their boards going for­ward. Part­ner Mark Lon­er­gan plans to host oth­er events like this in the future on those top­ics most impor­tant to lead­ers in technology.

Moderators

Ned Barn­holt, Chair­man, KLA-Tencor

David House, Chair­man, Brocade