Our April 19 program featured a renowned NJ CEO and a very engaged set of attendees. Doug Conant, former president of Nabisco, CEO of Campbell Soup Company, and then Board Chair of Avon Products, joined NACD NJ to share his thoughts on how boards and the companies they serve can follow principles such as ‘doing well by doing good’ for higher returns. The conversation was free flowing, with questions from the audience driving the discussion during much of the session.
Doug shared anecdotes about both his CEO and board experience with the group. Known for sending personal notes to employees, he talked about arriving at Campbell Soup at a time where there were going to be some tough decisions and cost cuts and spoke to the need to “acknowledge and celebrate things being done right”. Doug wrote between 10 and 20 notes per day to individual employees to recognize specific, performane-related achievements, such as delivering a project on time and under budget. The notes reinforced that performance mattered AND the employees mattered. During his tenure at Cambell Soup, it’s estimated that he wrote about 30,000 notes; when visiting facilities around the world, you could see the notes posted at the employee work stations.
Referencing the Blue Ribbon Commission Report on Culture as a Corporate Asset, he talked about how the role of the board regarding governance is evolving. Metrics are moving from Total Shareholder Return (TSR) to Total Stakeholders Return, and to do that boards need to manage the inputs as well as the outputs of Total Shareholder Return. His view of ‘oversight of the inputs’ is the board considering and asking the question - how are we doing with customers, employees, regulators and vendors?
Thoughts from Doug Conant:
• Doug reinforced his view that board members should be prescriptive only at the high level; it’s management’s role to decide how to manage the stakeholder groups to deliver the planned output (TSR). • Embed the discussion on the purpose of the company in the planning process. His view is management should articulate the purpose and values of the company and share with the board their plan to manage all the groups and the culture. The board should hold management to create it, own it and report on it. • Management team needs to land on what matters, with the board asking for a few key metrics – while doing things with integrity 1) Employee engagement to win in the workplace 2) TSR vs peer groups to win in the marketplace 3) CSR metrics to win with society and the community, including customers, suppliers andactivists • On the question of being tough or being nice – need to be both! Can be high touch, without necessarily being high cost through effective employee engagement. CEO’s should be "tough minded"on standards and "tenderhearted with people”. • Doug referred to Maslow’s hierarchy of needs, as interpreted by renowned author Steven Covey: 1) Living: decent pay 2) Loving: feel valued 3) Learning: opportunity to grow 4) Leaving a legacy: must feel the work is special
• On the structure of committees, Boards don’t need to add new committees to address culture. Doug feels the Compensation Committee should be the Compensation and Organization Committee, and like Audit or Risk committee, the Committee can assess the culture and present to the Board.
• The board’s role in Enterprise Risk Management is one of oversight at well, with his view that as risk management is part of the oversight role of the board, he doesn’t see a need to create another stream of work in this area. • The Board’s biggest risk – is the selection of the CEO, though the Comp and Audit Committees should have responsibilityto help pick the CHRO and CFO, respectively. Picking an inexperienced or one-dimensional CEO creates risk for the organization. • Doug shared his thoughts on CECP – the CEO Force for Good, where he is currently board chair, and how companies should ‘lean in’ on being socially responsible. The CRS Report is more popular than the Financial Report with employees.
Thomas Fuller Managing Director & Global Practice Leader ZRG Partners
Thomas Fuller is Managing Director in the NY and NJ offices of ZRG Partners, a global provider of senior-level executive search services. Tom also serves as the Global Practice Leader for the Consumer sector and is a member of the firm’s Board, Life Science and Technology practices. Previously, he was the CEO & Managing Partner and a Founder of Epsen Fuller Group, a global executive search and leadership consulting firm.
Tom is an NACD Certified Board Governance Fellow and Independent Director and Chair of the Compensation & Nom/Gov Committees of Tingley Rubber Corporation, a leader in the PPE (Personal Protective Equipment) industry; a Director at IMD International, a global professional services organization; and Director & Treasurer of AESC, the global industry association for the executive search and leadership consulting professions. Tom has served as a speaker at NACD National and Chapter events.