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Healthcare Org 1, 3.12 (V) [FUN] Video - Topic 5. The Board’s Role in Value Creation

3.12 (V) [FUN] Video - Topic 5. The Board's Role in Value Creation

[Music] nacd's blue-ribbon commission reports in thought leadership by / meyer have examined the importance and the relationship of alignment between value creation and compensation when you throw into the mix strategy you've got something that we'd like to explore further today I'm joined today by Dave Swynford presidency of pearl Meyer and Sarah Mathieu former chairman and CEO of Gunnar Bradstreet and she's a current director on Campbell Soup and Freddie Mac welcome thank you thank you good to be here I'd like to start off not with a simple question but these are complex issues and when you're talking about value creation the alignment strategy and compensation you can go to a number of different directions based on your experience is there a framework that would help directors setting the bars I believe the single most important role as a director because that actually sets the frame and the context against which you're going to measure management so it starts with strategy and to me strategy is a set of integrated choices it's about choices about where you're going to play within a marketplace what is your value proposition and how do you differentiate that versus competition inherently these are not financial metrics what it is what actually determines whether or not a company is going to be successful but if you stop with strategy that's not sufficient you need to be able to make the bridge over from strategy to the business model and then make sure that that business model is going to enhance value as you stands today so spending some time talking about the bar talking about where is the bar for management is really important thank you Sarah Dave if you do not have the right board compasses and the right people the right talent it almost doesn't matter it does but can you speak to that you can have an absolutely fabulous strategy if you don't have a management team that's capable of executing it you have nothing just like if you've got a great management team but they and the board are in disagreement on direction or they're directionless you're not going to create you either I think the board's first responsibility is to provide for the company building and maintaining a really good leadership team I think after that setting that bar is absolutely as important as Sarah said it was holding the management team accountable for delivering enforcing that standard performance is absolutely critical there are a lot of companies out there that have been successful decade after decade after decade and they have a couple of two or three things that really work for them one is they know how to grow and develop good people so they grow from within which allows them to preserve their culture and they have a culture of excellence and they have an absolute unrelenting focus on operational improvement year in year out we're always going to do it better than we did it before and so I think those things are really critical to long-term success if a boards job is oversight knowing management accountable and you've got these choices and metrics how do you and again it's an impossible question how do you really hold them accountable well the only way you hold them accountable is if you assess how you were doing so that is your performance in terms of stock price and ensure that the realize pay for senior management and would the return the chair holders got was actually in sync and if the two are not strongly correlated this is time for you as a board to step back and ask yourself where did we go wrong did we set the bar maybe too low or is it something else almost always it goes back to strategy I think it's a continuum you can't pull anything apart there is no bright line between these two because fundamentally strategy that cannot be executed is worthless execution without strategy strategic clarity I believe is dangerous so that's a continuum to execute you need great people so talent team and culture is all inextricably linked I think that's a fair assessment quite simply thank you Dave thank you Sarah thank you [Music] you



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3.12 (V) [FUN] Video - Topic 5. The Board's Role in Value Creation

[Music] nacd's blue-ribbon commission reports in thought leadership by / meyer have examined the importance and the relationship of alignment between value creation and compensation when you throw into the mix strategy you've got something that we'd like to explore further today I'm joined today by Dave Swynford presidency of pearl Meyer and Sarah Mathieu former chairman and CEO of Gunnar Bradstreet and she's a current director on Campbell Soup and Freddie Mac welcome thank you thank you good to be here I'd like to start off not with a simple question but these are complex issues and when you're talking about value creation the alignment strategy and compensation you can go to a number of different directions based on your experience is there a framework that would help directors setting the bars I believe the single most important role as a director because that actually sets the frame and the context against which you're going to measure management so it starts with strategy and to me strategy is a set of integrated choices it's about choices about where you're going to play within a marketplace what is your value proposition and how do you differentiate that versus competition inherently these are not financial metrics what it is what actually determines whether or not a company is going to be successful but if you stop with strategy that's not sufficient you need to be able to make the bridge over from strategy to the business model and then make sure that that business model is going to enhance value as you stands today so spending some time talking about the bar talking about where is the bar for management is really important thank you Sarah Dave if you do not have the right board compasses and the right people the right talent it almost doesn't matter it does but can you speak to that you can have an absolutely fabulous strategy if you don't have a management team that's capable of executing it you have nothing just like if you've got a great management team but they and the board are in disagreement on direction or they're directionless you're not going to create you either I think the board's first responsibility is to provide for the company building and maintaining a really good leadership team I think after that setting that bar is absolutely as important as Sarah said it was holding the management team accountable for delivering enforcing that standard performance is absolutely critical there are a lot of companies out there that have been successful decade after decade after decade and they have a couple of two or three things that really work for them one is they know how to grow and develop good people so they grow from within which allows them to preserve their culture and they have a culture of excellence and they have an absolute unrelenting focus on operational improvement year in year out we're always going to do it better than we did it before and so I think those things are really critical to long-term success if a boards job is oversight knowing management accountable and you've got these choices and metrics how do you and again it's an impossible question how do you really hold them accountable well the only way you hold them accountable is if you assess how you were doing so that is your performance in terms of stock price and ensure that the realize pay for senior management and would the return the chair holders got was actually in sync and if the two are not strongly correlated this is time for you as a board to step back and ask yourself where did we go wrong did we set the bar maybe too low or is it something else almost always it goes back to strategy I think it's a continuum you can't pull anything apart there is no bright line between these two because fundamentally strategy that cannot be executed is worthless execution without strategy strategic clarity I believe is dangerous so that's a continuum to execute you need great people so talent team and culture is all inextricably linked I think that's a fair assessment quite simply thank you Dave thank you Sarah thank you [Music] you


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