Category Archives: boards of directors

Buffett: Always the Optimist

How much attention is Berkshire Hathaway’s board paying to CEO succession these days? “It’s all we talk about [at board meetings],” Buffett recently told writer Bethany McLean.

In an interview running in the February edition of Vanity Fair (which hit newsstands yesterday), Buffett didn’t shed much new light on who will inherit the mantle at Berkshire Hathaway (it was reported some time ago that the CEO and chief investment officer jobs, now both held by Buffett, would be divided between two or more people). But it’s always refreshing to hear the Oracle of Omaha once again offer up his  optimistic viewpoint on America’s resiliency and future.

 “We had four million people here in 1790,” Buffett told McLean. “We’re not more intelligent than people in China, which then had 290 million people, or Europe, which had 50 million. We didn’t work harder, we didn’t have a better climate, and we didn’t have better resources. But we definitely had a system that unleashes potential. …

 “Since then, we’ve been through at least 15 recessions, a civil war, a Great Depression. … All of these things happen. But this country has optimized human potential [italics my own], and it’s not over yet.”

Not a bad way to finish up the first workweek of the year.

Limiting Your Human Capital Risk

After seeing invites to a number of previous events, I finally was able to carve out some time yesterday to get to Argyle’s Human Capital Leadership Forum in New York.

I was especially interested in hearing the first main speaker, Orlando Ashford, senior vice president of human resources at Marsh & McLennan Cos., who opened the conference with a talk on “Managing Human Capital Risk.” Considering MMC is in the risk-management business and the allegations of price-fixing that plagued the firm roughly six years ago (an $850 million settlement was eventually reached), Ashford seemed to select a topic that’s near and dear to MMC on at least a couple of fronts. (Ashford joined MMC in 2008, coming there from Coca-Cola.)

Unfortunately, Ashford didn’t have much to say specifically about MMC, but he did a fine job detailing some ways HR leaders can help businesses mitigate human capital risk, which he summarized as the ability (or inability) to “attract, develop and retain key personnel and to create an organization whose employees are optimized to create value for the business.”

Ashford shared several examples of human capital risk, but not surprisingly cited CEO succession as the most critical. (MCC has had three CEOs in the past six year, with its current CEO, Brian Duperreault, taking the helm in 2008.)

Succession is extremely important across the entire enterprise, he said, but has to start  with CEO succession. “Most boards agree that one of their most important roles is choosing the next CEO,” he said, “but, on average, boards spend less than two hours per year on CEO succession.”

To be sure, this is a process that’s owned and managed by the board. But as Ashford reminded conference attendees, it’s also one that frequently involves HR, beginning with putting in place processes that enable discussions around succession to happen.

Study Shows Sharp Divide Between Genders on Boards

Nothing really surprising in this release about new research from Heidrick & Struggles and WomenCorporateDirectors showing a big gender divide between male and female board directors on issues of diversity and pay.

Nearly 400 male and female directors were surveyed on what they see as keys to restoring public trust in corporate boards after the economic crisis. While a majority of women respondents (65 percent versus 35 percent of men) said they believe diversity is paramount in this quest, only about half of men and women directors think their boards are doing a good job of advancing it.

Women also seem to have much greater faith in new regulations regarding executive compensation systems (45 percent versus 22 percent for men), proxy access (38 percent versus 17 percent) and enhanced risk-management systems (40 percent versus 1 percent).

Another finding: More women directors than men felt three or more women on a board made it more effective (51 percent versus 12 percent) and that women brought unique attributes to a board (90 percent versus 56 percent). I’m especially fond of that last statistic … not.

My overall take on this? Since women are still personally struggling with issues of pay and gender equity in the workplace, and in the upper echelons of C-suites and boards of directors, it makes sense that they’re the ones who “get it” when it comes to determining the importance of these issues in building overall corporate trust.

Susan Stautberg, co-founder and co-chair of WCD, says the survey also reflects that “women directors, more than men, seem open to challenging the status quo.”