Thursday, April 16, 2009

Why Not a Corporate Governance Czar?

What's with all the czar appointments? Now it looks like the administration has just named a "border czar" to help bring special focus to drug and immigration issues on the U.S.-Mexico border.

This is the latest in a long line of czar coronations. The U.S. created an energy czar a while ago. But the Obama administration seems to have a comfortable affinity for crowning all sorts of new czars. 

Carol Browner is our current energy czar. Steve Rattner is playing the role of car czar. Paul Volcker came aboard as a kind of economic czar. Nancy Ann-DeParle is the Obama health czar. The Pentagon has recently appointed a weapons czar. And did you know we even have an arts czar?

Even the states are getting into the game. My home state of Pennsylvania has just named an open-records czar. And this czarism business is not limited to the public sector, as per this headline from a Wall Street Journal story in February: "Anheuser's Ad Czar to Step Down."

Well, if we think that crowning czars to take on targeted accountabilities is a successful tactic, let's name a corporate governance (CG) czar. 

We certainly have plenty of work for a CG czar. We have had a disheartening crop of failed boards and weak boards that have been exposed during this Great Recession. We have a lot of work that needs to be done to help restore confidence in our system of board oversight as a critical component of free market capitalism. A CG czar could prove useful in the nation's capital to help promote sound legislative responses to the ongoing economic turmoil and to push back against overaggressive regulatory forays into the nation's boardrooms. The right CG czar could and should speak truth to power — whether it be a lethargic board, an imperial CEO, a misguided legislator, or a ruthless regulator.

Any nominations? I have one. This is an easy nomination to put forth. 

This individual is already held in high esteem for his long and distinguished service as a counselor to boards, management, and the investment community. His "good governance" footprints are all over many boardrooms and executive suites. He has parachuted into ground zero of numerous governance conflagrations and always emerged with reputation intact, leaving a better board and management team behind to carry on. His authored wisdom on "doing the right thing" has graced the pages of many books and journals (I've been honored to have him in the pages of Directors & Boards for several path-pointing advisories). He has taken the "best practices" mantra not only to boardrooms but to many a conference hall and classroom over the past two decades and counting. 

Yes, that's Ira Millstein I'm teeing up for CG czar. He's well known as a governance guru, and I wouldn't be surprised if some of my colleagues in governance have already applied the czar designation, so I don't claim any great originality with this idea. But getting back to my point — if we're having a breakout of czars to bring a dedicated focus and voice to systemic problems, let's crown one who can do some good to help get corporate governance back on track and back into the good graces of the political system and with all those who have a stakeholding in sound capitalism.