Lucy P. Marcus

As the season in which public companies hold their annual general meetings progresses, one persistent issue is the lack of genuine dialogue between company officials and the general public. In place of robust debate and discussion among investors, executives, the workforce, and the community at large, the conversation seems to be taking place in different silos, with one group sitting around the boardroom table and another gathered at the kitchen table.

Companies are made up of people. Paying fair wages, adopting ethical sourcing practices, and upholding the dignity of workers should be a part of the way they calculate their success. Those who disconnect themselves from the fate of others, who act without conscience or a sense of right and wrong, and who spurn ordinary human decency have no place running organizations or sitting on company boards. The things that make us happy must not come at an unforgivably high price.

Boards and managers must take these meetings seriously. Part of the job is facing those with something at stake. Hosting circuses or hiding behind cameras will not keep tough questions from coming. A seat at the boardroom table comes with the responsibility to stand up and do this vital part of the job – in person and without musical accompaniment.

Many businesspeople, from founders to established executives to onlookers, misunderstand the role of boards and corporate governance, particularly for young companies. Early-stage ventures of all kinds often disregard the valuable role of questioning and dissent because they feel it gets in the way. Founders and executive teams sometimes chafe at the formality of board meetings during the sometimes frenzied rush to expand, since those gatherings require setting aside space and time to meet and… Show more

Many businesspeople, from founders to established executives to onlookers, misunderstand the role of boards and corporate governance, particularly for young companies. Early-stage ventures of all kinds often disregard the valuable role of questioning and dissent because they feel it gets in the way. Founders and executive teams sometimes chafe at the formality of board meetings during the sometimes frenzied rush to expand, since those gatherings require setting aside space and time to meet and walk through things logically. Show less

Carmakers are afraid of Apple. YouTube, Netflix, and Amazon are upending the television industry. Skype, Facebook, Twitter, Snapchat, and others have changed consumers’ notions of how – and how much it costs – to communicate with one another. Sectors and industry delineations as we know them are breaking down.
Many traditional companies, however, continue to believe that being toppled by upstarts can happen only in the “technology” sector. They are wrong.

In public policy, peace talks, election campaigns, or corporate strategy, laying out intentions, promises, and commitments is never enough. It is merely a first step toward a desired end – and entirely meaningless unless the second, third, and all subsequent necessary steps are taken. Moreover, taking the first step starts the clock on others' trust and confidence that the next steps will in fact be taken, or else risks creating the false impression that the failure to achieve a particular goal… Show more

In public policy, peace talks, election campaigns, or corporate strategy, laying out intentions, promises, and commitments is never enough. It is merely a first step toward a desired end – and entirely meaningless unless the second, third, and all subsequent necessary steps are taken. Moreover, taking the first step starts the clock on others' trust and confidence that the next steps will in fact be taken, or else risks creating the false impression that the failure to achieve a particular goal reflects mistaken (or irrelevant) intentions, not inadequate execution. We can see examples of this virtually everywhere we look. Show less

In perilous times, when the emergence, timing, and diffusion of risks can have a paralyzing effect, what matters is not simply what we accomplish, but how we accomplish it. In such times, the value we create cannot be measured only in terms of money. More important is how much stronger, more capable, and more resilient we help our colleagues, partners, children, and fellow citizens become. Perhaps the main risk this year – and in the decade ahead – is that we lose sight of this fundamental… Show more

In perilous times, when the emergence, timing, and diffusion of risks can have a paralyzing effect, what matters is not simply what we accomplish, but how we accomplish it. In such times, the value we create cannot be measured only in terms of money. More important is how much stronger, more capable, and more resilient we help our colleagues, partners, children, and fellow citizens become. Perhaps the main risk this year – and in the decade ahead – is that we lose sight of this fundamental truth. Show less

If Socrates’s gadfly was in Silicon Valley, it would have a lot of lazy horses to sting. The citizens of the techno-polis appear oblivious to how the outside world’s perception of them has changed, and radically so. Once universally revered as a hotbed of innovation, the world’s premier technology hub is increasingly viewed with suspicion and resentment.

In both the public and private sectors, we need to commit ourselves to long-term investment, whether in children and education, science and technology, and health and medicine, or in building strong institutions that can serve as the sustainable foundations of peaceful, democratic, and prosperous societies. An investment in our future is never wasted. Investing in beginnings is the only way we will live to see happy endings.

The amalgamation and synthesis of digital services and hardware is designed to make our lives easier, and there is no doubt that it has. But have we stopped asking fundamental questions, both of ourselves and of the companies we entrust to do all of these things? Have we given sufficient consideration to the potential cost of all of this comfort and ease, and asked ourselves if the price is worth it?

Two big power shifts are occurring around the world today. First, corporate power is growing relative to that of governments. Second, ordinary people are also gaining greater influence. What does it mean that these seemingly contradictory shifts are happening simultaneously?

What, exactly, is a board and what does a board director do?
We must ask ourselves every time we gather, “Why are we here and who do we serve?” so that the decisions we take are made wisely and judiciously, not only to serve the needs of the few, but to ensure that we help the organisation to live up to its potential, and do so in an honourable way.

FIFA has two problems. One is a straightforward lack of compliance with accepted business practices. Allegations of wrongdoing range from match-fixing and bribery among members of FIFA’s Executive Committee to questions about how Qatar was chosen to host the World Cup in 2022.

The second problem is arguably more serious, for it is epiphenomenal: the damage that unethical behavior has done to the ideal of fair play. When people see an institution that relates to something that they feel… Show more

FIFA has two problems. One is a straightforward lack of compliance with accepted business practices. Allegations of wrongdoing range from match-fixing and bribery among members of FIFA’s Executive Committee to questions about how Qatar was chosen to host the World Cup in 2022.

The second problem is arguably more serious, for it is epiphenomenal: the damage that unethical behavior has done to the ideal of fair play. When people see an institution that relates to something that they feel passionate about failing so publicly to abide by simple rules, they lose faith not only in that institution, but also in the idea that good governance is achievable at all. The message sent, and understood, is that some institutions – of all kinds – are immune from scrutiny and can play by their own rules. Show less

Board members need to rethink what they are doing in those rooms, and here individual directors’ guiding principle should be the “veil of ignorance” proposed by the political philosopher John Rawls in his 1971 treatise A Theory of Justice. Rawls proposed the veil of ignorance as a way to derive principles of social justice to which anyone who did not know in advance their identity and position in society would consent.

In a turbulent world, the essential lesson for corporations is to have a strong understanding of the risk involved and a clear internal guideline of risk appetite. Most important, boards and management teams have to keep an ever watchful eye on developing events.

On the 50th anniversary of the publication of Betty Friedan’s The Feminine Mystique I’ve started to wonder how far we’ve come in the boardroom. As I finished a conversation with a search firm that specializes in oil, gas and mining this week I questioned the level of progress.

The California State Teachers’ Retirement System (CalSTRS), the second-largest pension fund in the United States, wrote to Facebook to address the fact that the company has an unusually small, insular board with no women. With this bold and public step, CalSTRS brought to the fore an issue of genuine concern: diversity in the boardroom.

Most of the press will pick up the part about the absence of women board members, and that is vital — there is no doubt that women are severely… Show more

The California State Teachers’ Retirement System (CalSTRS), the second-largest pension fund in the United States, wrote to Facebook to address the fact that the company has an unusually small, insular board with no women. With this bold and public step, CalSTRS brought to the fore an issue of genuine concern: diversity in the boardroom.

Most of the press will pick up the part about the absence of women board members, and that is vital — there is no doubt that women are severely underrepresented in the boardroom. The lack of women on boards, however, is a reflection of a wider problem with diversity: It is one of color, age, international perspective and more. The Facebook boardroom has virtually no variety, and that is a serious issue. Boards that don’t represent the stakeholders of the business and the environment in which companies operate are not able to do their jobs as capably. Show less

Hewlett-Packard has announced that Lawrence Babbio will be stepping off its board, and this comes hot on the heels of the news that Sari Baldauf would also not be standing for re-election. GlaxoSmithKline Pharmaceuticals has announced that James Murdoch will not continue to serve on its board. He has served on GSK’s board since 2009, on its Ethics Committee. Murdoch has been embroiled in controversy this year, which led to loud rumblings as to whether it was prudent for him to remain on the… Show more

Hewlett-Packard has announced that Lawrence Babbio will be stepping off its board, and this comes hot on the heels of the news that Sari Baldauf would also not be standing for re-election. GlaxoSmithKline Pharmaceuticals has announced that James Murdoch will not continue to serve on its board. He has served on GSK’s board since 2009, on its Ethics Committee. Murdoch has been embroiled in controversy this year, which led to loud rumblings as to whether it was prudent for him to remain on the board.

This news brings to mind an issue that comes up time and again when independent board directors gather: inactive, unproductive, distracting or simply “dead wood” board members. It is often discussed in hushed tones, but it is time to address it openly and frankly, and to look upon it as the responsibility of each of us as individual board members, rather than simply an issue for the board or the board chair to tackle.

There are a number of reasons that you should consider stepping off a board: Show less

In the past couple of months, several companies have gone through extreme and very public upheaval. Such transitions offer opportunities for fundamental, board-led change for the better, but they are also fraught with significant risks. Recent developments at RIM and Yahoo help illustrate three pitfalls: “managing from the grave,” sequence and timing, and misplaced suspense.

The UK’s Financial Services Authority (FSA) released a report on the near collapse of Royal Bank of Scotland (RBS), the overambitious institution that took over ABN Amro and then had to be bailed out by the British government to the tune of £45 billion ($70 billion) in 2008. It is one of several financial institutions around the world that have encountered serious difficulties in the past several years, but this report is particularly edifying.

The report has harsh words for the board of… Show more

The UK’s Financial Services Authority (FSA) released a report on the near collapse of Royal Bank of Scotland (RBS), the overambitious institution that took over ABN Amro and then had to be bailed out by the British government to the tune of £45 billion ($70 billion) in 2008. It is one of several financial institutions around the world that have encountered serious difficulties in the past several years, but this report is particularly edifying.

The report has harsh words for the board of RBS, and highlights some of the failures of the RBS board in a way that provides an implicit warning for board members of financial institutions. The lessons that can be gleaned from looking at the RBS case are valuable for any director serving on the board of any business. Show less

In the past couple of weeks we’ve seen board-related stories from Japan with Olympus, India with Tata, Italy with Finmeccanica, South Korea with the Korea Exchange Bank (KEB), and more. Each story brings up a different issue around corporate governance, but taken together they raise a fresh question: Is a new global approach to board ethics emerging?

Corporate governance rules and requirements are distinct in different countries, and are often bound up in local attitudes and cultures… Show more

In the past couple of weeks we’ve seen board-related stories from Japan with Olympus, India with Tata, Italy with Finmeccanica, South Korea with the Korea Exchange Bank (KEB), and more. Each story brings up a different issue around corporate governance, but taken together they raise a fresh question: Is a new global approach to board ethics emerging?

Corporate governance rules and requirements are distinct in different countries, and are often bound up in local attitudes and cultures. Yet there now seems to be emerging an overarching and universal ethic and attitude towards boards, board service, and the responsibilities boards and their members individually and collectively need to fulfill. Show less

Like all boards, college and university boards have a general obligation to be caretakers of the organization and look after the interests of all its stakeholders, but in the higher education sector this role is layered with more complexity than it is for most corporate entities. After all, they are shaping the minds of future generations and it is the last opportunity to do that in a collective setting before a class of future scientists and artists, politicians and teachers, entrepreneurs and… Show more

Like all boards, college and university boards have a general obligation to be caretakers of the organization and look after the interests of all its stakeholders, but in the higher education sector this role is layered with more complexity than it is for most corporate entities. After all, they are shaping the minds of future generations and it is the last opportunity to do that in a collective setting before a class of future scientists and artists, politicians and teachers, entrepreneurs and journalists spreads out into the world.

The role of the trustee of a college or university is not for the faint of heart, as the university board carries a long list of complex issues that require the trustee’s attention. There are a myriad of competing pressures that higher educational institutions face, no matter where they are in the world. Some are long standing issues, and some are new, and many are heightened by the economic crisis. Show less

The board room is going through an extraordinary time of transition. More is being demanded of boards than ever before, and the activities of boards are under greater scrutiny.

Corporate boards no longer operate in a secretive world behind closed doors, beyond the watchful eyes of the public and media. Investors, stakeholders, regulatory bodies, and governments are demanding more transparency and accountability. The past six months have catapulted the boards of HP, Yahoo, NewsCorp… Show more

The board room is going through an extraordinary time of transition. More is being demanded of boards than ever before, and the activities of boards are under greater scrutiny.

Corporate boards no longer operate in a secretive world behind closed doors, beyond the watchful eyes of the public and media. Investors, stakeholders, regulatory bodies, and governments are demanding more transparency and accountability. The past six months have catapulted the boards of HP, Yahoo, NewsCorp, Goldman Sachs, MF Global, and Olympus, straight into the news headlines. Show less

News Corporation and the actions — or as some would note, the inactions — of its board highlight several important directions in the way that boardrooms need to be, and indeed are, moving. No longer will boards be able to conduct themselves behind closed doors without consequences. Investors have been loath to make waves when all was going well, but with the banking crises, HP, and now News Corp, investors are waking up to the fact that it is better to make changes in the good times than to… Show more

News Corporation and the actions — or as some would note, the inactions — of its board highlight several important directions in the way that boardrooms need to be, and indeed are, moving. No longer will boards be able to conduct themselves behind closed doors without consequences. Investors have been loath to make waves when all was going well, but with the banking crises, HP, and now News Corp, investors are waking up to the fact that it is better to make changes in the good times than to be caught without trunks when the tide goes out.

Change is coming, and it is up to us as non-executive independent board directors sitting in board rooms all over the world to lead, follow, or get out of the way. Show less

A good board can be rocket fuel or it can be rocks in an organization's pockets. Much of success and failure in the boardroom comes down to the way the individuals around the table — be it on a public company board, a small private board, or a non-profit board — do their jobs. So what should an independent director do to contribute to making the boardroom a dynamic, productive place?

Here are five things to start with:
- Know the boardroom,
- Know the people,
- Know the… Show more

A good board can be rocket fuel or it can be rocks in an organization's pockets. Much of success and failure in the boardroom comes down to the way the individuals around the table — be it on a public company board, a small private board, or a non-profit board — do their jobs. So what should an independent director do to contribute to making the boardroom a dynamic, productive place?

Here are five things to start with:
- Know the boardroom,
- Know the people,
- Know the business
- Know the landscape
- Know when to go Show less

What role does the board play in times when a company is involved in a crisis that has an impact on the community? I don't mean "brand management" or "reputation management." I mean cases like the one we are seeing now with the News of the World hacking scandal in the UK, or last year with the BP oil spill, where real people are harmed and whole communities are affected.

News International decided to close the News of the World. It is a bold gesture, but it does not negate the need for a… Show more

What role does the board play in times when a company is involved in a crisis that has an impact on the community? I don't mean "brand management" or "reputation management." I mean cases like the one we are seeing now with the News of the World hacking scandal in the UK, or last year with the BP oil spill, where real people are harmed and whole communities are affected.

News International decided to close the News of the World. It is a bold gesture, but it does not negate the need for a larger look at the way the company runs and the way the board operates. This issue was left to fester for too long. It escalated to the point that a dramatic choice had to be made. The board needs to take a long hard look at itself.

As independent directors on the boards of companies, our job is to help the companies navigate and be successful. Part of that is calling the company to task if something it is doing is harming the long term stability of the company, and, I would argue, is beyond ethically acceptable business practice. We should not simply be automatons with only dollar, pound, euro or yen signs. If an organization is caught up in a spiral of bad or unethical behaviour we as directors need to be people who step up and challenge the manner in which a company is doing business.

I realize that News International's board is perhaps not the best demonstration of good corporate governance, with so many inside executive directors in the balance, not a lot of diversity (there is only one woman), and the independent directors including amongst their ranks an opera singer and Marc Hurd formerly of HP. I would ask the board of News International, and particularly the independent members: what are you doing about the News of the World hacking scandal? I'd genuinely like to know. Show less

I'm tracking a deeply disturbing trend: inception is under attack.

Things that fall into categories of blue-skies, notional, and long-term thinking and investments, be it in people, planet, businesses, politics, or culture are under threat. The choices that lead to these decisions and cuts are named and blamed on many things -- mostly tough economic times, impact investing, tactical concerns -- but it all boils down to one thing: we are threatening our future because things that are… Show more

I'm tracking a deeply disturbing trend: inception is under attack.

Things that fall into categories of blue-skies, notional, and long-term thinking and investments, be it in people, planet, businesses, politics, or culture are under threat. The choices that lead to these decisions and cuts are named and blamed on many things -- mostly tough economic times, impact investing, tactical concerns -- but it all boils down to one thing: we are threatening our future because things that are intangible are easiest to cut in a need to demonstrate results and a drive to look impactful. Anything that is notional, hard to measure, early stage is in line to get slashed. This seems true from notional scientific research to libraries and early child education.

It is not just happening in government. In board rooms around the world, companies are making tough decisions about where money is spent, and they are having a hard time justifying investing in their future when their present looks so shaky. These choices in turn touch not only the companies themselves but their impact also ripples out to their stakeholders, sectors, communities. The choices they make as to whether they invest in sustainable ways of operating, innovative solutions, or investing in their communities reach far into the future and help decide if we are all standing still or are even moving backwards.

No society, community, company, entity can survive on impact-based, easily defined and easily measured things alone. It takes strong principled leaders with integrity and vision, skill and determination, in the public and private sectors to stand up and fight for the worth of investing in the future: without that there won't be a terribly interesting future to look forward to and only regret to look back with.

One of the most recognised phrases around the world begins with: "In the beginning..." but if we don't invest in beginnings, how can we hope to see happy endings? Show less

The board room agenda is going through a reformation. To ensure that we are helping organizations future proof themselves, what are some of the essential things that boards and board members need to think about, no matter the size, location, or sector of their organization? Five areas need an update in the way we as board members think about them: infrastructure, technology, internationalization, communication, and balancing continuity and change.

The role of modern corporate boards is the juxtaposition of grounding and stargazing.

Grounding is about making sure that the company fulfills all of its legal requirements, manages its risks properly, and does business in a responsible way. It is about all of the vital things we associate with board oversight tasks in corporate governance, compliance and corporate risk.

But with that comes an equally and perhaps even more important role: grounding needs to be complemented by… Show more

The role of modern corporate boards is the juxtaposition of grounding and stargazing.

Grounding is about making sure that the company fulfills all of its legal requirements, manages its risks properly, and does business in a responsible way. It is about all of the vital things we associate with board oversight tasks in corporate governance, compliance and corporate risk.

But with that comes an equally and perhaps even more important role: grounding needs to be complemented by stargazing. This is where a board demonstrates its mettle in making sure that their organization is ready and able to expand its horizons, to strive to achieve more and stretch itself to become the robust and resilient business that is capable of responding effectively to the unknowns in its future. Stargazing should be a big component of the strategic work that a board does.

Both grounding and stargazing require asking questions, looking beyond the obvious and the comfortable, and actively engaging with the organization. Show less

There are five universal factors that, no matter where people are, where they are from, or what sector they are in, make a real difference in encouraging young women to reach success.

Though they are prone to credit luck for their success, it is mostly hard work and perseverance that brings women to the top of their field, be they artists, scientists, entrepreneurs or academics. These are the women who never settle for the mediocre, are perpetually restless and striving, and who know… Show more

There are five universal factors that, no matter where people are, where they are from, or what sector they are in, make a real difference in encouraging young women to reach success.

Though they are prone to credit luck for their success, it is mostly hard work and perseverance that brings women to the top of their field, be they artists, scientists, entrepreneurs or academics. These are the women who never settle for the mediocre, are perpetually restless and striving, and who know that real success can only be found by crossing time zones, cultures, and cruising through stop signs.

The most successful women in the world have grabbed every opportunity afforded to them, and have created opportunities for themselves, harnessing their fears and doubts as rocket fuel instead of rocks in their pockets.

The factors that contribute to the development of the next generation of women leaders can be gleaned from their experiences.

Some of the characteristics of successful people, such as motivation, natural curiosity, courage, self-management, enjoying being stretched and rising to a challenge, personal will and fortitude, drive, and flexibility may be innate, but there is no doubt that these characteristics also need to be nurtured and encouraged.

Five factors stand out that help to support developing women leaders. Not particularly costly or demanding, they have proven to be very effective. Show less

A potentially unprecedented change in venture capital and in the funding of the science sector is on the cards as a consequence of today's economic climate and the austerity measures that are being introduced by many governments around the world, including the G7. Partly a consequence of the global financial crisis, this period of simultaneous change has additional consequences in the manner in which funding in the science sector and venture capital interact with, and affect, one another. These… Show more

A potentially unprecedented change in venture capital and in the funding of the science sector is on the cards as a consequence of today's economic climate and the austerity measures that are being introduced by many governments around the world, including the G7. Partly a consequence of the global financial crisis, this period of simultaneous change has additional consequences in the manner in which funding in the science sector and venture capital interact with, and affect, one another. These changes have created a perfect storm. Show less

Discussions around diversity in the board room often focus on gender, and indeed women are severely under-represented on boards. Importantly, though, the lack of women on boards is a reflection of a wider problem: it is one of color, age, international perspective, and more.

A lack of diversity is not simply a problem of "optics". It looks skewed not to have a diverse board, but just because in the modern world it looks odd, does it make a difference in real economic terms? Does it… Show more

Discussions around diversity in the board room often focus on gender, and indeed women are severely under-represented on boards. Importantly, though, the lack of women on boards is a reflection of a wider problem: it is one of color, age, international perspective, and more.

A lack of diversity is not simply a problem of "optics". It looks skewed not to have a diverse board, but just because in the modern world it looks odd, does it make a difference in real economic terms? Does it actually affect the bottom line? To my mind the answer is a resounding yes. We do not need diversity for diversity's sake, but because board diversity contributes to the profitability of the business.

There is a fundamental economic reason why diversity is important: diversity of thought, experience, knowledge, understanding, perspective and age means that a board is more capable of seeing and understand risks and coming up with robust solutions to address them. Businesses led by diverse boards that reflect the whole breadth of their stakeholders and their business environment will be more successful. They are more in touch with their customers' demands, their investors' expectations, their staff's concerns, and they have a forum inside the board room where these different perspectives come together and successful future proofing business strategies can be devised. Show less

As a non-executive board director, I have been thinking a great deal about what it means to do this role in today's environment.

We exist in a dramatically different economic climate. With that comes increased scrutiny by stakeholders and governments alike, and with good reason. If our companies are the engine for bringing us out of the doldrums, then we need to have the best foundations and tools for them to do just that.

The nature of what it takes to be a responsible board… Show more

As a non-executive board director, I have been thinking a great deal about what it means to do this role in today's environment.

We exist in a dramatically different economic climate. With that comes increased scrutiny by stakeholders and governments alike, and with good reason. If our companies are the engine for bringing us out of the doldrums, then we need to have the best foundations and tools for them to do just that.

The nature of what it takes to be a responsible board member anywhere in the world has changed. Simply looking over the shoulder of the executive team and offering an occasional word of wisdom or direction is not sufficient. Non-executive board directors today need to be proactive in their approach to ensure that the organizations they serve do not simply survive but thrive. And nothing less should be demanded of them than that. Show less