CEO Leadership

Thomas A. Cole

Thomas A. Cole

CEO Leadership

Navigating the New Era in Corporate Governance

University of Chicago Press | 2019

DOI: https://doi.org/10.7208/9780226665337

Overview
Contents

About this book

Corporate governance for public companies in the United States today is a fragile balance between shareholders, board members, and CEOs. Shareholders, who are focused on profits, put pressure on boards, who are accountable for operations and profitability. Boards, in turn, pressure CEOs, who must answer to the board while building their own larger vision and strategy for the future of the company. In order for this structure to be successful in the long term, it is imperative that boards and CEOs come to understand each other’s roles and how best to work together.

Drawing on four decades of experience advising boards and CEOs on how to do just that, Thomas A. Cole offers in CEO Leadership a straightforward and accessible guide to navigating corporate governance today. He explores the recurring question of whose benefit a corporation should be governed for, along with related matters of corporate social responsibility, and he explains the role of laws, market forces, and politics and their influence on the governance of public companies. For corporate directors, he provides a comprehensive examination of the roles, responsibilities, and accountability the role entails, while also offering guidance on how to be as effective as possible in addressing both routine corporate matters and special situations such as mergers and acquisitions, succession, and corporate crises. In addition, he offers practical suggestions for CEOs on leadership and their interactions with boards and shareholders. Cole also mounts a compelling case that a corporate culture that celebrates diversity and inclusion and has zero tolerance for sexual misconduct is critical to long-term business success.

Filled with vignettes from Cole’s many years of experience in the board room and C-suite, CEO Leadership is an invaluable resource for current and prospective directors, CEOs, and other senior officers of public companies as well as the next generation of corporate leaders and their business and financial advisors.

Author information

Thomas A. Cole is senior counsel and chair emeritus of the executive committee of Sidley Austin LLP in Chicago. He has led seminars on corporate governance at both the University of Chicago and Harvard law schools.

Reviews

“The relationship between investors and other stakeholders, directors and managers of public and private companies, and the obligations of directors and managers have become front and center. Cole describes these developments in clear prose and analyzes the key issues of corporate governance that managers, boards, and investors in our capital markets deal with today. Drawing from his deep experience as one of the most experienced and admired practitioners in the area, his perspective is one of a moderate, thoughtful, practical lawyer.”

— John F. Olson, Georgetown Law and Gibson Dunn & Crutcher

“This book is a winner! Perfect for the education or fine-tuning of current directors, it should also be required reading for anyone who’d like to be one as well as for academics and students of corporate governance and for those who have an interest in what happens in the boardroom. I was CEO of four companies, served on the board of a dozen, and taught corporate governance at the Booth School for 15 years by the case method. This book is the best I’ve ever read on corporate governance. I wish it had been in print before I retired. Most such books are as dry as sawdust. The topics are right on; the emphasis is on what really matters in the real world; the examples are written in a style that makes them interesting in their own right, and the lessons are eminently clear.”

— Warren Batts, former CEO of Mead Corp., Premark Corp. and Tupperware Corp

“Cole’s new book beautifully weaves together corporate law doctrine, wisdom gleaned from decades in corporate practice, and business realities to provide insightful and important lessons for CEOs, directors, and students of corporate governance. I recommend it wholeheartedly.”

— Guhan Subramanian, the Joseph Flom Professor of Law and Business, Harvard Law School, and the Douglas Weaver Professor of Business Law, Harvard Business School

“Cole’s book is like no other. It is comprehensive, thoughtful, and packed with practical advice for CEOs, directors, and their advisers on how to successfully function in today’s complex landscape of corporate governance. The lines between the roles of management and boards have blurred and the pressures on directors to expand their oversight responsibilities have intensified. We all need help to operate in the new normal and this book provides it. Cole’s illustrative sidebars, drawn from decades of day-to-day and crisis-level issues and challenges, are themselves an invaluable guidebook to be read, re-read and applied by all corporate stewards. Bravo!”

— Mary Jo White, Debevoise & Plimpton LLP, former chair of the US Securities and Exchange Commission

“The governance landscape has evolved considerably, and Cole has been there through all of it! With decades of practical application and experience, he brings a trusted advisor perspective, rooted in a framework of standards, to address real-world governance matters and enable the right outcomes. His body of work, as shared in this book, is a highly relevant and useful tool for boards, management,andshareholders alike.”

— Julie M. Howard, chairman & CEO, Navigant

Frontmatter Free access PDF PDF	i
Contents Free access PDF PDF	vii
Introduction Free access PDF PDF	ix
Glossary of Acronyms Free access PDF PDF	xv
Glossary of Governance Terms of Art Free access PDF PDF	xvii
Part I. The Policy, Law, and Market Forces That Have Created the New Era in Corporate Governance
1. What Is Corporate Governance and Why Do We Care? Access restricted Content is available PDF PDF	3
2. The Threshold Question of Corporate Governance: For Whose Benefit Are Corporations to Be Governed? Access restricted Content is available PDF PDF	7
3. The Forces That Shape Corporate Governance Access restricted Content is available PDF PDF	17
Part II. The Board-Centric Corporation
4. The Role of the Board Access restricted Content is available PDF PDF	35
5. Assembling an Effective Board Access restricted Content is available PDF PDF	41
6. Duties, Accountability, and Protections of Directors Access restricted Content is available PDF PDF	55
7. Routine Board Operations Access restricted Content is available PDF PDF	85
8. Special Situations Access restricted Content is available PDF PDF	117
9. A Digression on Private Companies, Not-for- Profits, and Congress Access restricted Content is available PDF PDF	151
Part III. Activism and the Threat of Shareholder-Centricity
10. Activists and Their Goals and Tools Access restricted Content is available PDF PDF	161
11. The Case against Shareholder-Centricity Access restricted Content is available PDF PDF	173
Part IV. Challenges to CEO Leadership
12. The Problem Access restricted Content is available PDF PDF	181
13. Elements of a Solution Access restricted Content is available PDF PDF	189
Acknowledgments Access restricted Content is available PDF PDF	199
Appendix 1. Flowchart Illustrating Proxy Voting Access restricted Content is available PDF PDF	203
Appendix 2. Template for an Oral Board Self-Evaluation Access restricted Content is available PDF PDF	205
Appendix 3. Template for M&A Agendas Access restricted Content is available PDF PDF	209
Appendix 4. Primer on Valuation Methodologies Access restricted Content is available PDF PDF	213
Appendix 5. Summary of Key Percentages Access restricted Content is available PDF PDF	215
Abbreviations in Notes Access restricted Content is available PDF PDF	217
Notes Access restricted Content is available PDF PDF	219

CEO Leadership

Navigating the New Era in Corporate Governance

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