The Modern Corporate Director

Karen Kaplan is President of the advertising agency Hill Holliday, chair-elect of the Greater Boston Chamber of Commerce, and has had a solid background of board service (presently she serves as Trustee at Fidelity Investments and a Director of DSM [Delta Dental, Doral, DentaQuest]).  She believes that the time has come for redefinition: we need the “modern director.”

The modern director not only hears what is being said by various constituencies (not just shareholders) but also listens and takes action.  In remarks before the New England Chapter of the National Association of Corporate Directors, Kaplan noted today that social media and speed of information moving in the marketplace require immediate corporate response to crises, and in fact no company is fast enough to do effective damage control.  Rather, it is the task of the board to get ahead of the public by being responsive to their expressed perceptions before corporate actions run afoul of those perceptions.

Kaplan claimed that statistics showed that consumer loyalty was driven more by public perception of the selling company than by product features.  She pointed out how quickly the public perception can force reversal of a corporate strategy: Verizon abandoned its $2 charge for on-line payments within 24 hours of adoption in the face of viral outrage at what was seen as corporate greed.

Which constituencies must be listened to?  Time Magazine’s Man of the Year was a protester!

How do you recruit directors who are attuned to reading the input from the various constituencies that can affect profit and stock price?  How do you get ahead of the 99% and direct a company away from disaster?  Kaplan suggests that adding women and minorities and  people with very different backgrounds can help.

Discussion at the meeting included references to the Occupy movement; how long, it was asked, until the Occupy people, the 99%, buy a few shares of stock and start showing up at corporate annual meetings?  Followers of my blog posts know that I believe the Occupy movement did have clear primary focus and that its perceptions have inevitably entered into the national discussion at least in substance if not by direct attribution, but somehow I just don’t see most Occupiers I met waving their ten share certificate and asking to be recognized by the chair.

Although it IS an interesting thought….


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