NACD Southern California 2010 Directors in a Digital World

(c) Risk for Good 2010 - all rights reserved

The Board in a Digital World:How Directors Can Survive and Thrive

in the Ever-Changing Internet and Social Media Landscape


Who’s Talking:

Fay Feeney CEO, Risk For Good

Robert MagnusonPresident, Magnuson & Company

http://www.uscsummit.com/feeney_bio.html

http://www.uscsummit.com/magnuson-bio.html


Ever-Changing Internet and Social Media Landscape

What is it?

•Today’s Internet is called web 2.0 or the interactive Internet

•Social media is the use of the Internet for two way conversations

Both happen on mobile phones, iPads, laptops and desktop computers

Uses: • Social media for informing, engaging, tracking, advertising,

gaming, collaboration and activism• Search• Online shopping• Blogs & websites as engagement for shareholders, staff or

customers.• Investor forums• Secure board portal• Virtual meetings


Tools – Let’s Explain• Social Media

• Facebook, Twitter, Linked In, Yelp• Search

• Google, Google alerts, Yahoo, Business sites • Online Shopping

• Ebay, brick & mortar, virtual – Etsy• Blogs & Websites

• Your business marketing and investor relations • Investor Forums

• Private (Broadridge) and Public – anywhere & everywhere• Secure Board Portals

• BoardVantage, Watchdox, Diligent Boardbooks, E-Board• Virtual meetings

• Go to Meeting, Cisco,

E-discovery - if it is digital you can find it!


Global Social Media Facts

Started in 2004: Facebook has 500 million

60 million up from 3 million just 2 years ago

over 60 million users and grows at 2.5 million users each month – worldwide.

What is the Impact on Directors?

• Board Communication: Who’ll take the lead?

• Strategic Implications: Business, Boardroom & Directors

• Social Media: Investors, Regulatory, Customers, Employees, Activist, Stakeholders



Goldilocks: A cautionary taleLessons about the hazards of wandering off

and exploring unknown territory.

Who’s talking

about my business?


The Internet As Unknown Territory

The time is now! It is just beginning and definitely not too late to learn how communications is working in a digital world.

Directors have a new set of questions to be asking about the business:

• What is the company doing with these new tools?• Who is monitoring the conversation about business?• What is the impact on risk management?

• Reputation?• Brand?• Crisis?

What are the questions waiting to be asked in your board room?




"It's one of those unusual points on the timeline of history where you can say things changed very dramatically — in this case, in a single night.“ Alan Schroeder, associate professor at Northeastern University


Director’s Risk Map

1

23

Relative Uncertainty

Rela

tive

Impo

rtan

ce 6

5

Higher

Higher

Lower

4

7

8

9

1

CEO/Chairman Combined Role

Strategy

3

4

Risk Oversight5

6 Stringent Regulatory Environment

7

Shareholder Communications

2

XYZ Company

CEO Compensation

8

Proxy Access

9 CEO Performance Management

10 Independent DirectorPerformance

10

Disclosures


Your Values Are Your Brand

"It's not what you say, it's what they hear.“ Red Auerbach

• Your board is communicating with or without speaking.

• Tone at the Top speaks volumes.

• Do you know what is being said?


Where is Your Board on Communications?

PreparedProactivePlan & Test

Ad-HocReactive

Roles & Charters

Crisis Communications


Shareholder and Brand Communications


What Is On The Table?

•How will your board meet the enhanced transparency, disclosure and communications requirements of the Dodd-Frank Act?

•What approach will you take to meet the intent of the SEC mandate for enhanced board engagement with shareholders?

•What action will you need to take as Board Chairs, Lead Directors and Nomination and Governance committee members?


What Is On The Table?

•What board charters will be changed to incorporate these new technologies?

•What will you need to do to stay informed and comfortable with new technologies being introduced?

•How will you communicate your skills/capabilities in disclosures that put you in a positive light.


Next StepsStart Asking Questions on Communications

• How you will be disclosing and communicating about yourself and your board to investors?

• How do your skills match roles?• Leadership structure; CEO/Chair, Committees• Risk factors, hot-button issues (Exec. Comp.)

• How and where you can get information on what is being

said?

• Now is the time to start listening and tracking online your customers, investors and competitors.

The time is right to take action now!


Thank You!


Let’s Talk

Based on our discussion of digital communications what changes do you anticipate happening in the boardroom?

Questions 1Who is currently overseeing shareholder/stakeholder communications? How do you see it being done in the future?

Question 2What questions can you ask to assess how your board can anticipate and manage shareholder issues and concerns?

Question 3Given your current board composition, how prepared are you to disclose directors’ skills and capabilities as a value-add vs. regulatory requirement?

Question 4How prepared is your CEO/Chair to communicate for your company? The board? In a crisis situation?