Barbara Hackman Franklin has had an impressive career. The former U.S. Secretary of Commerce is a respected advocate and advisor to American companies doing business in international markets, notably China. She has been a director of 14 companies during her 25 years of service on corporate boards. Currently, she is a director at Aetna and Dow Chemical. In addition, she serves as the chairman of the National Association of Corporate Directors, the independent, non-profit organization whose 10,000 members represent the boards of companies from the Fortune 50 to smaller public companies, private companies, private companies, and nonprofit organizations.
In her opinion article in this week’s Agenda, Franklin calls her fellow directors to action. “We, as directors, should simply step up to the new environment. Directors must demonstrate that we can make corporate governance more effective to serve the company and other stakeholders. I truly believe that more effective governance and more vigilance on our part can contribute significantly to a company’s better financial and ethical performance.”
She goes on to describe the two broad areas: one in directors rededicating themselves to understanding the companies they serve while renewing their own commitment to “integrity, good judgment, excellence and the courage to hold ourselves and company management to the highest standards.”
Second, she advises directors to reevaluate how well board members work together as a group and whether the group works constructively with the CEO. And, if something needs fixing, “fix it.”
The world has changed and boards need to step up, not complain about government involvement or the fact that shareholders have achieved power that boards must recognize and accommodate to make private enterprise better.
“We as directors have a responsibility to roll up our sleeves, do our jobs better and prove that private sector solutions remain the best way for American business to operate.”
She urges directors to accept the NACD’s principles for strengthening governance.
You will find that the 10th principle is shareholder communication, “Governance structures and practices should dbe designed to encourage communication with shareholders.”
As Franklin says, it’s time for directors to make the changes necessary to bring value to the companies they oversee and the shareholders they represent.