CEO Voices: Profiles, interviews, Editor’s column, letters page Best Practice: Lessons learnt from the coal-face Special Report: In-depth analysis of the most pressing current issue Leading Edge: Next-generation business thinking and strategy Executive Lifestyle: Including leadership, education, travel and health Toolbox: Concentrated practical information for every CEO to keep CEO is the leading bi-annual publication serving the needs of today’s busy business pace setter. It brings together the best in writing on key issues which are imperative to the future success of global corporations, as well as providing in-depth case studies and interviews with leading players. Published in March and September, this unique journal addresses the most pressing business challenges where the CEO needs to lead from the front: Corporate Strategy, Finance & Investment, IT & Communications, Human Capital Management, Outsourcing and Technology. The publication and web site is structured in a user-friendly manner, with articles presented in the following sections: CEO – delivering more to readers and advertisers www.the-chiefexecutive.com 2008 Volume 1 | £5.95 €8.00 $8.95 www.the-chiefexecutive.com Chief Executive Officer Best-practice solutions for business leaders worldwide CEO CEO pay: is the party over? How executive remuneration is changing PLUS: Technology pioneers | CEO supercoaching | Industry profile: sports
Transcript
CEO Voices: Profiles, interviews, Editor’s column, letters page
Best Practice: Lessons learnt from the coal-face
Special Report: In-depth analysis of the most pressing current issue
Leading Edge: Next-generation business thinking and strategy
Executive Lifestyle: Including leadership, education, travel and health
Toolbox: Concentrated practical information for every CEO to keep
CEO is the leading bi-annual publication serving the needs of today’s busy business pace setter. It brings together the best in writing on key issues which are imperative to the future success of global corporations, as well as providing in-depth case studies and interviews with leading players.
Published in March and September, this unique journal addresses the most pressing business challenges where the CEO needs to lead from the front: Corporate Strategy, Finance & Investment, IT & Communications, Human Capital Management, Outsourcing and Technology.
The publication and web site is structured in a user-friendly manner, with articles presented in the following sections:
Chief Executive Offi cerBest-practice solutions for business leaders worldwide
CEOCEO pay: is the party over?
How executive remuneration is changing
Chief Executive O
ffi cer | 2008 Volume 1
PLUS: Technology pioneers | CEO supercoaching | Industry profi le: sports
CEO – The facts
Issues at the top of the CEO agenda
• Requested by top CEOs worldwide• Audited by the ABC• Incisive commentary and analysis from the worlds most powerful
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The publication will continually address the most challenging business issues which are at the forefront of the CEOs’ mind.
Corporate Governance
Technology
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Corporate Location
Terrorism
IT Security
Emerging Markets
M&A
Corporate Law
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Capital & Finance
CEO Succession
Legislation
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Sponsorship opportunites will be available to a select number of solution-providers who are best placed to provide answers to their questions and concerns for today’s Chief Executives.
VOICES
more ‘joined-up’ approach. Some have evensuggested the creation of a code to governthe behaviour of institutional shareholders.The creation of strategy is another areawhere the efforts of the chairman and theCEO need to be complementary. The CEOand executive team take the lead increating strategic proposals, but thechairman must ensure that they aresubmitted to proper scrutiny by the board,and that all views are aired. For this towork properly, the chairman needs to besurrounded by non-executives who can notonly demonstrate an understanding of thebusiness, but also engage with the issuesfacing the company. The chairman has a particular responsibility to keep strategicissues at the front of the agenda and build consensus among members of the board. One chairman recentlyremarked that he could not remember an occasion when a major board decision came to a vote.
Lines of successionThe Combined Code provision – thatindependent non-executives should be in themajority – requires the chairman (who nolonger qualifies as independent once inposition) to think extremely carefully aboutthe size of the board and its composition. The additional imperative to populate keycommittees with independent non-executives(either exclusively or in the majority) canquickly inflate the number of directors. This can lead some chairmen to reduce theexecutive element of the board to the CEOand CFO to keep numbers down.A shift towards the US model is likelyto have a negative impact on successionplanning, by denying talented executivesfirst-hand board experience. The chairmanmust have proper exposure to seniorexecutives below board level, but thereis no substitute for testing potential CEOs in the boardroom setting as fully participating directors.According to the new code, a board musthave ‘a formal, rigorous and transparent
procedure’ for the appointment of newdirectors. Board chairmen are entitled tochair the nomination committee and willhave to work hard to attract first-rate peopleonto their boards. For some, the risks ofdirectorship outweigh the benefits, and it isbecoming harder for chairmen to persuadetop-quality people to join their boards.Exacerbating the problem is growingevidence that the private equity world is exciting a significant number of executives who are disenchanted withrelentless exposure on remuneration and the risk to reputation that accompanies their plc roles.Finding chairmen to take on the oneroustask of running the board of a majorcompany is getting harder too. For manysuccessful CEOs nearing the ends of theircareers, the pull of a chairmanship is notsufficiently strong to counter the inherent riskto their hard-earned reputations. Recentmilestone packages of £500k+ for those whocan be persuaded suggest that a significantupward trend in compensation is underway.Higher pay and restriction to a singlechairmanship has led to fears that somechairmen may be tempted to spend moretime than necessary in the role, or assumecertain executive duties – something thatcould easily upset the equilibrium at thetop of the organisation.The new requirement for boards to carryout a rigorous annual evaluation is a furtherresponsibility that will affect everychairman. While the formal practice ofevaluation is still in its infancy, early signsshow that using external consultants notonly brings objectivity and credibility to theprocess, but also helps to overcome some ofthe scepticism felt by non-executives. Thechairman has the job of orchestrating theevaluation process and ensuring that bothindividual members and the board learnfrom the experience and implementnecessary changes.Today’s chairmen may be less visible thanin the past, but their role has never been soinfluential. The board is now the focus of
attention from all sides. As its leader, thechairman must have the ability to extractmaximum value from individual directors,committees and the board as a whole –meeting the demands of corporategovernance, ensuring a sound strategy andoverseeing an effective executive team. �Footnotes1 The July 2003 Combined Code incorporates keyelements from the Higgs Report (on the role andeffectiveness of non-executive directors) and the SmithGuidance (on audit committees).
VOICES
‘C omply or explain’ remains the fundamental basis forcorporate governance in the UK.This allows companies more scope in theirobservance of governance principles than is possible in the legislation-oriented US).Chairmen have their work cut out to ensurethat their boards do not allow thebureaucracy of governance to distract themfrom the crucial task of value creation.Mindful of the spotlight on issues such as board composition, performance,remuneration and risk management, chairmen are now having to dedicate moretime to their roles and bring a greater level of professionalism to their work.Of course, this is no bad thing. More isexpected of independent non-executivedirectors, so today’s chairmen mustincreasingly bring to bear a range of ‘softskills’. These should include the ability tocoach new board members (especiallyexecutive directors); moderate debates; teaseout concerns; orchestrate and unite an oftendisparate group of individuals; recruit theright people; and effect behavioural changewhere necessary. Spencer Stuart conducted astudy to determine how much of an impactthe new Combined Code and the recent focus
on corporate governance have had on thechairman’s role in leading UK companies.1In the words of one chairman, ‘Thesedays, the job is less about imposing a stampor direction, and more about orchestratingthe group. Sometimes you’ve got to let thenerve be touched, probed and explored. The chairman’s main role is to make surethere is an open discussion and thatnothing is off-limits.’
Setting the toneThe quality of the chairman’s relationshipwith the CEO will set the tone for the boardand can be a key factor in determining thesuccess of a company. The right relationshipwill provide a solid foundation from whichthe CEO can direct the company’s fortunes.The isolation, even loneliness, of today’sCEO – unable to confide fully in executivecolleagues and subject to intense scrutinyfrom shareholders and the media – calls for a supportive chairman who can act asconfidant, sounding board and sparringpartner, and yet be capable of firing the CEO if he falls behind the pace.The division of responsibility betweenchairman and CEO, however, remains thesame: the chairman’s primary role is to run
an effective board process, liberating the CEO to run the company.Since the early 1990s, when the separationof chairman and CEO roles first becamewidespread, chairmen have had far lesscontact with shareholders. Today, shareholdercontact is mostly limited to the CEO, CFOand head of investor relations. Nevertheless,chairmen still need to cultivate a rapport withmajor investors, making themselves availableto listen to investor concerns and answerquestions that fall within their remit.Waiting until a time of crisis beforeestablishing a relationship with investorswill invariably prove too late for achairman. Indeed, some crises are caused bya lack of communication. This could easilybe avoided by a willingness to listen toconcerns and criticism. As one chairman put it, ‘Being a contact point for theshareholders is necessary, but it’s a bit like the fire escape in a building; you don’t need to be on it every day.’Meeting of mindsOne complaint we hear repeatedly is thatcompliance experts rarely attend meetingsalongside fund managers. This inevitablyfrustrates chairmen who would like to see a
Author profilesJan Hall is a leading member of SpencerStuart’s European board services practice.Her work embraces board and top-levelmanagement positions across a broadrange of business, for both executive andnon-executive roles. She was formerly the European chief executive of The GGTGroup plc, where she was a main boarddirector and was also responsible for thecompany’s 16 businesses across Europe. She spent nine years as the senior non-executive director of First Choice Holidays;she is a council member of the Institute ofDirectors and a member of the UK Government appointmentsadvisory panel. She graduated fromSt Anne’s College, Oxford, and is anhonorary professor of the WarwickBusiness School. In 1996, she was givenan OBE for services to industry.
Alastair Rolfe works as a writer and editor for Spencer Stuart,specialising in board-level andgovernance-related publications.Company profileSpencer Stuart is the world’s leadingprivately held executive search firm, with 50 offices in 25 countries. Foundedin 1956, Spencer Stuart is a leader ininternational board search and hasconducted more than 2000 directorsearches over the past decade. Clients range from the world’s largestcompanies with board succession issues, to emerging companies that aredeveloping boards for the first time.
Chairmen have their work cut out to ensure that boards do not allow the bureaucracy of governance to distract them
from the crucial task of value creation
Boards are now subject to intense publicscrutiny, so chairmen have to ensure that the appearance – as well as the reality –of board effectiveness is maintained at alltimes. Jan Hall and Alastair Rolfe of SpencerStuart in London share the results of a recentstudy based on interviews with FTSE100chairmen, CEOs and advisors.
It’s tough atthe top
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September 2008 Editorial AgendaLeading Edge "The 50 top performing US CEOs under 50 years old for 2007-8”A comprehensive top 50 survey of the best performing US CEOs under 50 years of age within Fortune 1000 companies. The study will measure performance in terms of respective company revenue, financial performance and share price between June 2007 and June 2008. The survey will serve as a compelling account of young rising US stars succeeding within the constraints of the downturn of the American economy.
Thought Leadership Bob Jeffrey, Global CEO of ad agency JWT JWT is one of the world’s largest advertising networks with offices in over 300 cities around the globe. The agency is currently ranked no. 1 in both India and China which are two obviously important emerging markets.
Having spearheaded the revitalisation of JWT New York, Bob Jeffrey transformed the global agency from a traditional ad agency to a full integrated brand communications company. In Jeffrey’s first year as Worldwide CEO, JWT notched significant global wins, most notably HSBC and Samsung and earned incremental business from its existing client base, which includes Ford and Diageo. JWT have recently won the high-profile Nokia account.
Technology Rick Harwig, Chief Technology Officer Royal Philips ElectronicsWhy certain locations are regarded globally as top innovation hubs
Human Capital Michael J. Critelli, Executive Chairman, Pitney Bowes1) Wellness at work: why prevention programs will be key.In 2005, Pitney Bowes joined 18 other companies and the Partnership for Prevention to encourage Fortune 1,000 companies to consider making workforce health a CEO issue and adopt strategies to promote prevention and wellness. At their HQ in Stamford, Conn., workers can participate in a “Health Care University,” which offers various health programs to earn points toward lowering the amount they pay toward their health insurance. So what is the payoff for the company and its’ employees?
2) Fostering innovation through learning.Every company recognizes the importance of innovation in feeding future growth. Relatively few have truly accepted that innovation in born not only from having the right people in an organization, but also from the strength of the processes in place to bring out and explore new ideas. Those few are quickly reaping the rewards – so what is the key to company training and learning?
3) Why ROI on people is just as important as ROI on tangibles and why people and their performance ARE the bottom line and CEOs ignore this at their peril.In a talent-driven world, people are a lot more than vital assets, they are the golden key to success. But how often do CEOs personally ensure these assets deliver the optimum return for shareholders? How many instead just offload this to others, loosing critical performance improvements in today’s competitive markets?
Authors Mike Johnson and Chris Roebuck – best-selling commentators on talent
management - challenge chief executives to take back the responsibility for their greatest asset and put people at the very top of their management agenda. They not only show how to do it, they explain why there really isn’t another option in creating enduring corporate success.
OutsourcingAn investigation into how the economic downturn in the US has hit the outsourcing market. While a number of American organisations have responded quickly and started offshoring to save costs, is this necessarily the best reaction or simply a knee-jerk response?
CRM:Stephen Loynd, Program Manager, IDCAn overview of the very latest in CRM thinking, including:
• Return on customer
• home-shoring
• CLM – customer lifecycle management
• Multi-souring / shoring of contact centres – make or buy
Lifestyle‘Affluenza’: Is having too much choice, too much money, a disposable culture, and an on-demand lifestyle making us unhappy? How can we be successful, but ensure we are still contented as well? CEO Magazine investigates…
Plus:20 QuestionsBusiness School Round-up Tool-BoxEvents
CEO Editorial Contributors Past and present:• E Neville Isdell, CEO, Coca-Cola
• Jeff Bezos, CEO, Amazon
• Kevin Roberts, CEO, Saatchi & Saatchi
• Steve Holliday, CEO, National Grid
• Ralph Shrader, CEO, Booz Allen Hamilton
• Martin Franklin, CEO, Jarden Corporation
• Rob Carter, CIO, Fed-Ex
• Vincent Sollitto, Chairman, Syntax Brillian
• Rod Favaron, CEO, Lombardi
• Elon Musk, Founder, PayPal
• Ian Robertson, CEO, Rolls Royce Motor Cars
• Niklas Zennstrom, founder of Skype
• Lord Karan Bilimoria, founder of Cobra Beer
• Rich Vincent, CLO, Nestle
• Rick Harwig, CTO, Philips
• Naresh Goyal, founder of Jet Airways
Key subject areas:• Corporate Strategy
• Finance & Investment
• IT & Communications
• Human Capital Management
• Outsourcing
• Technology
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Distribution & ReadershipCEO is the only publication with global reach received exclusively by C-level decision makers within the world’s largest and most powerful organisations.
The multiple responsibilities of these leaders coupled with rapidly changing political, business, economic and regulatory environments mean they demand the type of strategic, tactical and peer-led information that CEO provides.
CEO is mailed directly to over 10,400 named individuals: CEOs, CIOs, CFOs and COOs (and their
equivalents) within companies worldwide with a turnover in excess of US$500 million, generating a projected readership of approximately 47,000. (publishers statement)
Our continual investment into readership by refining and fine-tuning the distribution to every named individual has created the most exciting database available.
• AT & T
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