Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way

by Ram Charan, Dennis Carey, Michael Useem

Overview

Is your firm’s board creating value—or destroying it?

Change is coming. Leadership at the top is being redefined as boards take a more active role in decisions that once belonged solely to the CEO. But for all the advantages of increased board engagement, it can create debilitating questions of authority and dangerous meddling in day-to-day operations. Directors need a new road map—for when to lead, when to partner, and when to stay out of the way.

Boardroom veterans Ram Charan, Dennis Carey, and Michael Useem advocate this new governance model—a sharp departure from what has been demanded by governance activists, raters, and regulators—and reveal the emerging practices that are defining shared leadership of directors and executives. Based on personal interviews and the authors’ broad and deep experience working with executives and directors from dozens of the world’s largest firms, including Apple, Boeing, Ford, Infosys, and Lenovo, Boards That Lead tells the inside story behind the successes and pitfalls of this new leadership model and explains how to:

• Define the central idea of the company
• Ensure that the right CEO is in place and potential successors are identified
• Recruit directors who add value
• Root out board dysfunction
• Select a board leader who deftly bridges the divide between management and the board
• Set a high bar on ethics and risk

With a total of eighteen checklists that will transform board directors from monitors to leaders, Charan, Carey, and Useem provide a smart and practical guide for businesspeople everywhere—whether they occupy the boardroom or the C-suite.

Product Details

ISBN-13:	9781422144053
Publisher:	Harvard Business Review Press
Publication date:	12/10/2013
Pages:	304
Product dimensions:	6.10(w) x 9.30(h) x 1.10(d)

About the Author

Ram Charan is a business adviser who has worked with executives and directors of many companies, including DuPont, GE, Novartis, Verizon, and RBS Group (Brazil). He has served on the Harvard Business School faculty, teaches in Wharton Executive Education, and serves on the board of Hindalco (India). He is the author of eighteen books.

Dennis Carey is Vice Chairman of Korn/Ferry International. He has placed some of the most prominent chief executives and corporate directors in the United States, including those at 3M, American Express, Goldman Sachs, GSK, Humana, MCI, and Tyco International. This is his fourth book on CEO succession and corporate governance.

Michael Useem is a professor of management and the director of the Center for Leadership and Change Management at the University of Pennsylvania’s Wharton School. He offers courses on leadership and has authored books on leadership and corporate governance, including The Leadership Moment and Investor Capitalism.

Table of Contents

A Call to Leadership 1

1 From Ceremonial to Monitor to Leader 3

Part 1 Boards That Work

2 First Things First: Define the Central Idea 29

3 Recruit Directors Who Build Value 43

4 Root Out Dysfunction 61

5 Wanted: A Leader of the Board 81

Part 2 Leading the Leaders

6 CEO Succession: The Ultimate Decision 103

7 A Question of Fit 129

8 Spotting, Catching, or Exiting a Falling CEO 139

Part 3 Value Creation

9 Turning Risk into Opportunity 167

10 Staying Out of the Way 187

11 The Leadership Difference 203

12 A Revised Definition of Corporate Governance 213

The Complete Director's Checklists 221

Appendix A Trends in Director Monitoring and Leading 241

Appendix B Director Evaluation 251

Appendix C Division of Responsibilities Between the Board Leader and Chief Executive Officer 253

Further Reading on Director and Executive Leadership 259

Notes 263

Index 219

Acknowledgments 291

About the Authors 299

Editorial Reviews

Directors & Boards magazine’s “Governance Book of the Year.”

“… a must for anyone who sits on a major corporate board—or who wants to understand them…. Their very helpful book provides lessons from their experiences, as well as practical advice to others going through the transformation.” — Wall Street Journal

“The writers know their stuff…the authors know their audience.” — Financial Times

“… a compelling account of a new leadership model for the modern corporation…” – Directors & Boards magazine

“The authors - Ram Charan, Dennis Carey, and Michael Useem—each an expert and practitioner in the field, throw a lot of insights on how companies can benefit from having boards that work rather than just exist.” — Financial Express (India)

“ a wise and comprehensive book.” — The Globe and Mail

“The summarised action points at the end of each chapter allows busy readers to takeaway key thoughts to chew on at their own time of reflection.” — BusinessLeadershipManagement (BLM), The Executives Magazine

“Leadership at the top is being redefined as boards take a more active role in decisions that once belonged solely to the CEO. Ram Charan, Dennis Carey and Michael Useem advocate a new governance model and reveal the emerging practices that are defining shared leadership of directors and executives. With a total of eighteen checklists that will transform board directors from monitors to leaders, Charan, Carey and Useem provide a smart and practical guide for business people everywhere - whether they occupy the boardroom or the C-suite.” — Strategic Management Bureau (UK)

ADVANCE PRAISE for Boards That Lead:

Alan Mulally, CEO and President, Ford Motor Company—
“Boards That Lead provides the essential road map for corporate leadership. With gripping accounts and compelling illustrations, Charan, Carey, and Useem show how directors can lead in strategic partnership with company executives. This is a game changer, required reading for all who seek to bring out the best in their boards.”

Fred Hassan, Managing Director (Healthcare), Warburg Pincus; Chairman and director, Bausch + Lomb; former Chairman and CEO, Schering-Plough; former lead director, Avon Products; director, Time Warner—
“This book shows how, through leading, partnering, and delegating, boards are now starting to shape the architecture of the company in unprecedented ways. This book is rich with stories—there is nothing like learning from three world-leading practitioners on advancing board capabilities to get the company to raise its game.”

Roger W. Ferguson, Jr., President and CEO, TIAA-CREF—
“Boards That Lead offers an illuminating road map for how a board of directors can effectively engage and motivate its corporate management team to successfully navigate even the most complex of situations. This book should be on the ‘must-read’ list of every corporate board member and senior executive.”

Ivan G. Seidenberg, former Chairman and CEO, Verizon Communications; former Chairman, Business Roundtable—
“This research, complete with compelling anecdotes and practical information, brilliantly explores how creative, flexible, and innovative processes provide the foundation for long-term, sustainable partnerships between the board and the companies they serve. This work captures the true innovation intended to guide the leadership mandate for any board.”

Maggie Wilderotter, Chairman and CEO, Frontier Communications; director, Procter & Gamble and Xerox Corporation—
“Boards That Lead is chock full of real-world examples that directors can use to improve their leadership and decision making—an impressive one-stop shop outlining board member roles, responsibilities, and actions, including the boundaries that boards and companies often fail to recognize. The checklists for putting this advice into action are comprehensive and practical— the best I have seen.”

From the Publisher