Sunday, July 21, 2013

B Corporations in Delaware

Last year, I asked my colleagues at area board governance events what they thought of the emergence of B (Benefit) Corporation legislation across the nation and most recently in California. I received blank stares. Now that 18 states - including Delaware, home to over half of all public corporations and the heart of the corporate governance judicial system - have passed B Corporation laws, perhaps the governance field will wake up and note the oncoming train.

I have a draft of a status paper from 2012 which describes the history of B Corporations, which I will share in response to email requests.

What are the current and prospective issues that now must be addressed?

1.      We already are seeing a decline in publicly listed companies and new venture IPOs. Will the increase in B Corps further exacerbate those trends by diverting investments (especially the burgeoning and largely unregulated social investments) away from traditional shareholder-benefit entities?

2.      When will the ABA begin to take steps to develop a "uniform code" - a legislative standard that can be adopted by all states - much like the Uniform Corporate Code?  Or will the legal profession simply sit by and watch states proliferate their own versions until such time as we realize we probably need a more standardized national version?

3.      When will we determine that the certification by B Labs of Berwyn, PA Is something of a conflict of interest as they also serve as the primary advocate of B Corporations?

4.      As we increase the number of B Corporations, what will be the mechanisms of consumer and business regulation? How will we prevent fraud at these firms with such blurred lines of accountability and the lack of legal precedent?

5.      How can companies and boards serve multiple masters: shareholders and stakeholder groups, specifically employees, customers, suppliers, the community (which community, in fact?), local to global environmental interests, social, arts, and cultural entities?

6.      Will shareholders invest in B Corporations in light of the dispersion of their "returns" among so many ill-defined entities?

7.      Do B Corporations portend the de facto merger of non-profit and for-profit organizations? How well will B Corporations adopt financial controls required of public companies? Or will B Corporations simply persist below the radar of most major regulators?

8.      What happens "at the end?" How will bankruptcies or mergers and acquisitions be handled? Will the "benefits" be transferred or eliminated? How will "benefit shares" be valued? How will investors convert their shares to later tiers of capital investment?

9.      We know that B Corporations are particularly appealing to the Millennial Generation which has demonstrated strong aversions to profit-seeking. Is the B Corporation the beginning of their version of "don't trust anyone over 30?". Will B Corporations produce the salaries, pensions, growth that will sustain the Millennials through their productive years  and onto retirement?

10. How will B Corporations, in combination with Crowd-funding, change the landscape of investment and - even more important - how will that combination manage incidents of financial fraud caused by naive investors being duped?


Passing a law enabling the formation of B Corporations clearly is the easiest part. Are the legislators, regulators, and professional organizations ready to take on the real challenges and consequences of their actions?

Thursday, July 18, 2013

What Do You REALLY Want?

All too often, women post questions in a LinkedIn Group to which I reply privately.  One reason is that sometimes women need to have their foundation shaken, and I don’t always like to do that in public.  Here is an example of the answers I’ve given to some questions.

Q1.         When I ask for a Mentor, I mean someone who I can honestly tell me how she got to where she is.

A1.       When you search for a mentor, why aren’t you looking at everyone in a position of leadership to which you aspire, what is required for you to accomplish your objectives? 

Are you implying that only women will be honest with you? Are you implying that men cannot be effective mentors or advisers or coaches for you?  

Why are you asking total strangers in anonymous LinkedIn Group what they think might be right for you? Why would a total stranger be more honest with you than someone who knows you in your own company or field of interest?

Q2.         In the O&G world there are not a lot of women who are in positions of power.

A2.       There are a number of women of achievement in the OIL and GAS field. [ALWAYS spell out your abbreviations.] What research have you actually done to find them?  Whom do you actually know in the positions of power to which you aspire? Why not start there? Why not start with women in leadership in your own company or professional organizations? 

Then you need to figure out why, on earth, would THEY want to talk with you?  What do you have to offer to them?  Why would they benefit from knowing you or enhancing your career?  What’s in it for THEM?

Q3.         The ones that are [in leadership], who are mothers (or not), who are hard workers and who are well respected, I want to talk to them.

A3.       So, if I understand you correctly, not only are you looking for (the few) women in leadership in the non-traditional fields, such as Oil and Gas, but you ALSO will only talk to mothers AND women who are hard workers AND who are well-respected.  

Why are you specifying such limitations or selection criteria?  Obviously, you are describing yourself (or at least whom you would like to be – well-respected).  But, why do you only need someone JUST LIKE YOU?  

Perhaps you do have specific questions – if so, maybe you should think about those, individually, then pursue the “right coach” to answer them.  Put all of your Motherhood questions in one bucket – then ask mothers (like maybe your own or that of your friends). Then put all of your professional questions in another bucket – and ask professionals in your field.  If you can’t sort them out and target them, rationally, then you are just looking for someone to sympathize with you – probably your over-worked status.  Maybe you even need to talk to a professional executive coach to figure out how to manage your career more effectively.

Then, you need to answer the question of “Why would they want to talk with you?” Are you ready to pay a professional executive coach? Do you have professional credentials that would be of value to a leader in your company or field?  Or are you just looking for someone to commiserate with you – talk to you like a girl friend -- a sympathetic personal shoulder to cry on.

Q4.       The issue is that [women leaders] are few and far between, not to mention they are busy.

A4.       The issue really is that the women in leadership know exactly how to manage their busy commitments, so what is there that would possibly interest them in talking with you?  It isn’t that there are just a few women in leadership -- it’s more a situation that we need more women to grow into those roles and responsibilities.  Are you really one of THOSE women? 

Q5.         I am not asking for a friend per say; I am truly looking for direction and advice.

A5.       Are you sure you aren’t just looking for a friend, whose shoulder you can cry on, rather than someone who will tell you really the way it is and where your career stands?

Isn’t your search for “direction and advice” just like any other entrepreneur searching for a strategy and how to “grow the firm?”  What do they do?

It has always impressed me that when men are ready to take risky “next steps,” they consult with others whom they recognize as “wiser than they.”  Do you have any women in your professional circle of associates whom you respect or whose opinion you respect? Anybody?

If not, then, are you ready to put your money on your own future and invest in consultation with some professional women who could tell you the cold hard truth: what you need to know or do to take the next step to advance in your career?

Or maybe you really ARE just looking for some free opinions from The Girls.  So, good luck with that!

Corporate Directors’ Forum Director of the Year

I am getting really tired of the presumption that women directors are only fit to serve or be recognized for participating in “not for profit boards.”

While Lauree M. Sahba, Director of Voices for Children, may be an accomplished director, it is a sorry tale indeed that the only women consistently recognized by Corporate Directors’ Forum of San Diego, California are women who serve on not for profit boards. This sends a terrible message to women and to corporate boards – it suggests that women are only suitable for these “women’s auxiliary board roles” rather than true corporate governance roles.

It’s time that Corporate Directors’ Forum and the voters for Director of the Year, there, recognize that San Diego has 7 companies with 14 impressive women corporate directors who SHOULD have received the recognition of Director of the Year.

102 California Companies listed on the 2013 Fortune 1000 list:
40 – Southern California Companies:
11 Valley/Pasadena
14 Greater LA County
8 Orange County
7 San Diego

San Diego Companies on the 2013 Fortune 1000 list and their women directors:
#149 – Qualcomm
1.       Barbara T. Alexander
Barbara T. Alexander has served as a director of the Company since July 2006. Ms. Alexander has been an independent consultant since February 2004. From October 1999 to January 2004, she was a senior advisor for UBS, and from January 1992 to September 1999, she was a managing director of Dillon Read & Co., Inc. Prior to joining Dillon Read, Ms. Alexander was a managing director in the corporate finance department of Salomon Brothers. Ms. Alexander is past Chairman of the Board of the Joint Center for Housing Studies at Harvard University and is currently a member of that board's executive committee and an executive fellow of the Joint Center for Housing Studies at Harvard University. Ms. Alexander previously served as a director of Centex Corporation from July 1999 to August 2009, Burlington Resources, Inc. from January 2004 to March 2006, Federal Home Loan Mortgage Corporation (Freddie Mac) from November 2004 to March 2010 and Harrah's Entertainment, Inc. from February 2002 to April 2007. Ms. Alexander has been a director of Allied World Assurance Company Holdings, Ltd. since August 2009 and KB Home since October 2010. She holds B.S. and M.S. degrees in theoretical mathematics from the University of Arkansas, Fayetteville.

2.       Dr. Susan Hockfield
Dr. Hockfield served as a director since July 2012.  Dr. Hockfield has been President Emerita of the Massachusetts Institute of Technology (MIT) since July 2012 and Professor of Neuroscience at MIT since 2004. She was President of MIT from December 2004 to July 2012. Dr. Hockfield joined the faculty of Yale University in 1985 and served as Provost from 2002 to 2004 and dean of the Graduate School of Arts and Sciences from 1998 to 2002. Dr. Hockfield was a member of the scientific staff of the Cold Spring Harbor Laboratory from 1980 to 1985 and a National Institutes of Health (NIH) postdoctoral fellow at the University of California at San Francisco in 1980. Dr. Hockfield has been a director of the General Electric Company since December 2006. She has been a trustee of the Carnegie Corporation of New York since September 2006. Dr. Hockfield holds honorary degrees from several U.S. and international universities and is a member of the American Academy of Arts and Sciences and a fellow of the American Association for the Advancement of Science. Dr. Hockfield holds a B.A. degree in biology from the University of Rochester and a Ph.D. degree in Anatomy from the Georgetown University School of Medicine.

3.       Sherry Lansing
Sherry Lansing has served as a director of the Company since September 2006. Ms. Lansing is the Founder and Chair of the Sherry Lansing Foundation, a philanthropic organization focusing on cancer research, health and education. From 1992 to 2005, she was the Chair of the Motion Picture Group of Paramount Pictures where she oversaw the release of more than 200 films, including Academy Award® winners Forrest Gump, Braveheart and Titanic. From 1984 to 1990, she operated her own production company, Lansing Productions, and co-founded Jaffe/Lansing Productions. In 1980, she became the film industry's first female to oversee all aspects of a studio's motion picture production when she was appointed President of Production at 20th Century Fox. She holds additional trustee, chair and advisory positions with the Friends of Cancer Research, the American Association of Cancer Research, the Carter Center and Stop Cancer, a non-profit philanthropic group she founded in partnership with Dr. Armand Hammer. Ms. Lansing is also a regent of the University of California and serves as Chair of the University Health Services Committee. She has earned the 2004 Horatio Alger Humanitarian Award, the 2003 Woodrow Wilson Award for Corporate Citizenship, a 2003 honorary doctorate in fine arts from the American Film Institute, the 1989 Alfred P. Sloan, Jr. Memorial Award, and the 1982 Distinguished Community Service Award from Brandeis University. Ms. Lansing has been a director of Dole Food Company, Inc. since October 2009 and RealD Inc. since May 2010. She holds a B.S. degree in speech, with a minor in English and mathematics, from Northwestern University.

#281 – Sempra Energy

4.       Debra L. Reed

Debra L. Reed became a director in 2011. She is the chairman and chief executive officer of Sempra Energy. She is also a director of Halliburton Co.

5.       Kathleen L. Brown

Kathleen L. Brown has been a director since June 2013. Her experience includes 18 years as a senior executive in the financial sector and 16 years of service in the public sector, including a term as California’s state treasurer. Prior to joining Sempra Energy’s board, Brown worked 12 years in leadership positions at Goldman Sachs Group, Inc., a global investment banking and securities firm. She currently is a director for Forestar Group Inc., a real estate and natural resources company, and the National Park Foundation.
Brown serves on Sempra Energy's Corporate Governance; Environmental, Health, Safety and Technology and LNG Joint Venture and Financing committees.

6.       Lynn Schenk

Lynn Schenk has been a director since 2008. Schenk is currently an attorney in private practice. She served as chief of staff to the Governor of California from 1999 to 2003 and was elected to the U.S. House of Representatives representing San Diego, California from 1993 to 1995, serving on the House Energy and Commerce Committee.  Schenk is a director of Biogen Idec, a trustee of The Scripps Research Institute, a member and vice chair of the California High Speed Rail Authority, a trustee of the University of California San Diego Foundation and a member of the University of San Diego School of Law, Board of Visitors.
Schenk serves on Sempra Energy's Audit and Environmental, Health, Safety and Technology committees, and is chair of the LNG Government Relations and Permitting committee.

#607 – Life Technologies
7.       Ora H. Pescovitz M.D.
Executive Vice President for Medical Affairs and Health System Chief Executive Officer at the University of Michigan
Ora H. Pescovitz, M.D. On May 11, 2009, Dr. Pescovitz became the University of Michigan's first female Executive Vice President for Medical Affairs and Health System Chief Executive Officer. In this role, Dr. Pescovitz is responsible for the leadership and management of the Health System, which includes the University of Michigan Hospitals and Health Centers, the University of Michigan Medical School, clinical services of the University of Michigan School of Nursing and the Michigan Health Corp. As CEO of one of the nation's leading research institutions, Dr. Pescovitz is responsible for oversight of more than $3 billion in revenue and a Medical School ranked 8th nationally in NIH funding awarded.
Prior to taking the University of Michigan post, Dr. Pescovitz had an extensive career serving as executive associate dean for Research Affairs at Indiana University School of Medicine from 2000-2009, president and CEO of Riley Hospital for Children in Indianapolis from 2004-2009 and interim Vice President for Research Administration at Indiana University from 2007-2009. Dr. Pescovitz is a nationally recognized pediatric endocrinologist and researcher who has published more than 180 papers and books, and received numerous awards for her research and teaching.
The Endocine Society named her the 2011 recipient of its prestigious Robert H. Williams Distinguished Leadership Award for her exceptional contributions to endocrinology; the Feinberg School of Medicine and Northwestern has awarded her prestigious alumni awards and she has been elected to the Institute of Medicine. Dr. Pescovitz has served as president of the Society for Pediatric Research, the nation's largest pediatric research organization, president of the Lawson Wilkins (North American) Pediatric Endocrine Society, chair of the March of Dimes Grants Review Committee, and a member of the Ad-Hoc Group for Medical Research Funding, the board of the Hormone Foundation, the board of the National Association of Children's Hospitals and Related Institutions (NACHRI), the board of the Children's Miracle Network. She is currently on the board and executive committee of the Association of Academic Health Centers. Dr. Pescovitz received her B.M.Sc. in the Honors Program in Medical Education at Northwestern University and her M.D. at Northwestern University Medical School.

#622 – Carefusion

9.       Dr. Jacqueline B. Kosecoff

Dr. Jacqueline B. Kosecoff serves as a managing partner of Moriah Partners, a private equity firm focused on health services and technology, and as a senior advisor to Warburg Pincus, a global private equity company. Previously, she served as senior advisor for OptumRx (a UnitedHealth Group Company), and served as CEO of OptumRx from 2007 to 2011. Dr. Kosecoff joined UnitedHealth Group as part of its acquisition of PacifiCare Health Systems in 2005. Previously, Dr. Kosecoff was founder, president and COO of Protocare, co-founder and co-CEO of Value Health Sciences and served as professor of Medicine and Public Health at UCLA. Dr. Kosecoff serves on the boards of Sealed Air, STERIS, athenahealth and as an Emeritus Member of the Medical Center Board of City of Hope. Dr. Kosecoff holds both a bachelor’s degree in Mathematics and a Ph.D. in Research Methods from UCLA and a master’s degree in Applied Mathematics from Brown University.

#686 - Leap Wireless International
None

#894 – Jack in the Box
10.     Linda A. Lang
Chairman of the Board and Chief Executive Officer
Linda Lang has been Chairman of the Board and Chief Executive Officer since October 2005. She was also President from February 2010 until May 2012 and served as Chief Operating Officer from November 2003 to October 2005. She was Executive Vice President from July 2002 to November 2003, and held various officer-level positions with marketing or operations responsibilities from 1996 through 2002. In addition to her duties at Jack in the Box Inc., Linda serves on the board of directors for the WD-40 Company (NASDAQ: WDFC), San Diego State University’s College of Business Administration and the San Diego Regional Economic Development Corporation. Linda is also a member of the Corporate Directors Forum.

11.     Madeleine Kleiner
Ms. Kleiner has been a director of the Company since September 2011 and is currently Chair of the Nominating and Governance Committee. From 2001 to 2008, Ms. Kleiner was Executive Vice President, General Counsel and Corporate Secretary for Hilton Hotels Corporation, a hotel and resort company. At Hilton, Ms. Kleiner oversaw the company’s legal affairs and the ethics, privacy and government affairs functions. She was also a member of the executive committee with significant responsibility for board of directors matters. From 1999 through 2001, Ms. Kleiner served as a director of a number of Merrill Lynch mutual funds operating under the Hotchkiss and Wiley name. From 1995 to 1998, Ms. Kleiner served as senior executive vice president, chief administrative officer and general counsel of H. F. Ahmanson & Company and its subsidiary, Home Savings of America, where she was responsible for oversight of legal, human resources, legislative and government affairs and corporate communications. Previous to that, from 1977 to 1995, Ms. Kleiner was with the law firm of Gibson, Dunn & Crutcher, including as partner from 1983 to 1995, where she advised corporations and their boards primarily in the areas of mergers and acquisitions, corporate governance, securities transactions and compliance. Ms. Kleiner has served on the Board of Directors of Northrop Grumman Corporation since 2008, where she is a member of the Audit Committee.

12.     Wendy M. Webb

Ms. Webb has been a director of the Company since July 2008. Ms. Webb has been Managing Director for Tennenbaum Capital Partners, LLC, an alternative private investment management firm, since January 2010 and an officer of TCP Capital Corp., a publicly traded company, since April 2012. Prior to joining Tennenbaum Capital Partners, Ms. Webb served from April 2008 to January 2010 as Chief Communications and Investor Relations Officer and Senior Advisor for Ticketmaster Entertainment, Inc. Ms. Webb served from 1988 to 2008 with The Walt Disney Company, most recently as Executive Director and Chief Executive for The Walt Disney Company Foundation. She also served as Disney’s Senior Vice President of Investor Relations and Shareholder Services and oversaw the company’s global strategic financial communications and governance outreach. Her previous roles also included investment banking positions with PaineWebber Inc. and Lehman Brothers.


#933 – PriceSmart
13.     Katherine L. Hensley
Katherine L. Hensley has been a director of the Company since July 1997 and served as a director of PEI from December 1994 until July 1997. She is a retired partner of the law firm of O’Melveny & Myers in Los Angeles, California. Ms. Hensley joined O’Melveny & Myers in 1978 and was a partner from 1986 to February 1992. From 1994 to 2000, Ms. Hensley served as a trustee of Security First Trust, an open-end investment management company registered under the Investment Company Act of 1940.

14.     Sherry S. Bahrambeygui
Sherry S. Bahrambeygui joined The Price Group, LLC in September 2006 and has served as a Managing Member of The Price Group, LLC since January 2007. Additionally, Ms. Bahrambeygui serves as Executive Vice President, Secretary and Vice Chairman of the Boards of Price Charities, fka San Diego Revitalization Corp., and Price Family Charitable Fund and she is also the Chief Executive Officer of PS Ivanhoe, LLC, a commercial real estate company. Ms. Bahrambeygui was a licensed stockbroker and is a founding partner of the law firm of Hosey & Bahrambeygui, LLP. She has been practicing law with an emphasis in employment and business litigation since 1993 and provided consultation and legal representation to the Company from time-to-time between 2001 and 2008. Ms. Bahrambeygui’s thorough understanding of the business and operations of the Company, as well as having effectively assisted the Company on certain legal and business matters, contribute to the Board’s conclusion that she should serve as a director of the Company.

Tuesday, July 9, 2013

Most Competent Women

A look back at last year’s Fortune Magazine’s Most Powerful Women issue (July 2013) was occasioned by yet another inquiry about “where do I find women in leadership?”  The plaint was that “there are so few women in leadership in the X industry” – the complainer’s industry, of course. 

Frankly, I’m reaching the conclusion that women are not “looking up” at the amazing talent that exists today among women in all facets of business.  Rather than learn from these mini-business case studies, they they’re just hoping someone will “give them the answers they seek.”  Yet, when there are great examples of women in leadership, are women pursuing that information?

Looking at the Fortune Magazine Most Powerful Women of September 2012, I am extremely impressed by the top 50 listed at http://money.cnn.com/magazines/fortune/most-powerful-women/.

I know we’ve made major progress when Oprah Winfrey is listed as #50 and Martha Stewart doesn’t even make the list.  Entertainment is not power, IMHO.  It is noteworthy that the average age of these Most Competent Women is in the mid-50s, which means a birth date ranging from the late-1950s to the mid-1960s.

Added to this impressive list is the Top 13 Global Women in Leadership: http://money.cnn.com/gallery/news/world/2012/09/20/mpw-international-newcomers.fortune/index.html

Even the MPW All Stars (“Queen Bees”), including the women who have been on the most powerful list for 13 to 14 years straight, represent a wide range of talent:

The first thought that comes to mind from these impressive descriptions of women of competence is that there is very little likelihood that they would “mentor” anyone outside of their company or immediate circle of talented potential candidates.  We should not expect them to do otherwise.

Another noteworthy point, from comparing these lists, is that women of competence are moving out of the all-too-typical-women-only MFF-industry sectors (makeup, fashion, food) into mainstream and top tier business activities that include technology, science, industrial/manufacturing, defense, oil and energy, not to overlook global and domestic financial fields.

We too often hear the typical complaint that there are “too few” women in leadership.  To this is now added the query, “what are the 3 questions you’d just LOVE to ask” these Most Competent Women? 

There are a host of really interesting questions we might ask these women about the educational choices they made, their key career choices, how they managed their advancement, how they took steps sideways in order to progress to their current position of leadership, how they negotiated compensation at the executive levels (would anyone really answer that question?). Would anyone really ask these CEO women whether they thought that their firms should provide “gratis childcare facilities on site?” 

When you ask questions of women in leadership, and they answer you, how will other women view that information?  I have gathered a great deal of insight on that topic, having written two books about dozens of women in leadership.  The typical response by women, even assuming they have read my books, has been mixed at best.  Too many women are intimidated by Most Competent Women – women in leadership.  It is a case of the tried and true “power dead even rule” described by Heim and Murphy in 2001 (In the Company of Women).  Too many women have developed a propensity to compare themselves negatively to the women of accomplishment whom they encounter, in person or in print. 

Until and unless women see competent, talented women as the people that they COULD become, there will continue to be “too few” women in leadership anywhere. But, for now, we have Fortune’s and Forbes’ Most Competent Women to help the next generation of talent envision their potential and future