Forging relationships with top executives and getting onto key committees that oversee executive hiring and compensation was a main focus during a recent gathering of more than 80 African American corporate board members in Chicago. The two-day conference in September was the third annual installment of the board members’ meetings to discuss their rare status in the mostly white world of corporate governance.
“We really want to learn from each other how to make sure that the diversity agenda gets addressed in the boardroom,” said John W. Rogers Jr., chairman and CEO of Ariel Capital Management (No. 1 on the BE ASSET MANAGERS list with $16.1 billion in assets under management), which cosponsors the Black Corporate Directors Conference with Russell Reynolds Associates. Rogers sits on the boards of McDonald’s Corp., Bally Total Fitness, Aon Corp., and Exelon Corp.
The Investor Responsibility Research Center estimates that about 185 blacks sit on corporate boards, most of whom sit on multiple boards. The center estimates that blacks have 321 board seats out of the total 3,447.
All corporate directors have the same basic responsibility of representing the shareholders of a public company by overseeing the CEO and monitoring his and other executives’ decisions. But the black directors say they bring added responsibilities into boardrooms with them.
David A. Thomas, a Harvard Business School professor who plans and moderates the annual conferences, said he focused on building relationships with CEOs to get appointed to committees that nominate new board members and oversee CEO compensation and executive succession.
“It’s important for directors to develop relationships with the CEO so they can have candid conversations offline,” said Rogers, “so that they can help move the agenda.”
Last year’s session focused on how black directors could help increase opportunities for black investment firms. “To the extent we can make people in that room aware of the fact that there are these black firms … it can be much more powerful than waiting for it to happen through your corporate minority supplier program,” Thomas said.
Most directors have been executives for years and are, on average, 56 years old before they get tapped to serve, Thomas said. Serving on two to three boards could easily bring in an extra $100,000 or more per year, but most directors are already wealthy before they get tapped. “It’s pretty good money, but I don’t think many of these guys could live off of that money alone,” he said.