Why the Fortune 500 Loves Delaware

Corporate Governance

When you think of the business epicenter of America, what place springs to mind? New York City, San Francisco, or maybe Los Angeles?

Those would be good suggestions but oddly enough, a potentially bigger case could be made for the state of Delaware. As Alana Semuels writes for The Atlantic, “Two-thirds of Fortune 500 companies—including Coca-Cola, Apple, and American Airlines—are incorporated there…Their workforces, headquarters, and operations—truly the corporations themselves in anything but a legal sense—are elsewhere.”

So why are big business leaders rushing to file their paperwork in one of the nation’s tiniest states? The short answer is Delaware’s Court of Chancery. This style of court system, which developed in colonial times, is now largely non-existent in the rest of the United States. However, Delaware’s Court of Chancery has been continuously functioning since 1792. One of five judges presides over all cases that make it to the court, and verdicts are reached without the use of a jury.
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Recent Trends in CEO Succession

CEO succession data provides a unique glimpse into the evolving landscape of corporate leadership. By tracking trends, leaders can examine the effects of CEO succession timing, industry-specific risks, diversity initiatives, and competitor performance.

CEO succession

Each year, The Conference Board releases a report that “analyzes all CEO succession events at S&P 500 companies over the last 16 years.” Here are some highlights from their latest findings.

High turnover rates in retail and consumer product industries indicate that there is a major shift occurring.

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Exploring Types of Corporate Governance Training

Becoming a board member is a great achievement in and of itself, but becoming a successful board member poses a unique challenge—one that can be made easier through the utilization of top-notch corporate governance training.

Speaker giving a talk on corporate Business Conference. Audience at the conference hall. Business and Entrepreneurship event.

The types of corporate governance training range in both price and in duration. In this blog, we’ll highlight some of those options.

Online Courses

Luckily, the digital age we’re living in presents many convenient ways for board members to grow their knowledge and expertise.

You can watch a quick 5-minute video about cyber security concerns online, or you can jump in a weeks-long online education track.

In fact, numerous corporate governance organizations offer extensive educational tools for directors. For instance, the National Association for Corporate Directors offers a course for board members called “Education Framework,” and clearly outlines its purpose: “The establishment of a standard in director education creates much-needed clarity about the knowledge and competencies directors should develop to become high-performing board leaders.”

A large number of sites offer similar online programs that are low-cost but highly respected.
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Board Member Teamwork: Strengthening Collaboration

Boardrooms are built on the foundation of collaboration. It is the ultimate purpose of their existence—bringing two or more leaders together to produce the best decisions possible.

Business People Meeting Conference Discussion Corporate Concept

collaboration (noun): the action of working with someone to produce or create something.

Unfortunately, boards don’t always focus enough time on emphasizing the importance of board member teamwork. But fear not!

We’re here with some helpful tips on how to cultivate a collaborative energy in your boardroom.

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Board Member Onboarding Done Right

When boards welcome a new member, the focus should be on setting that individual up for success, usually through a new board member onboarding process.

board member onboarding

Whether the person is a first-time board member or a veteran of corporate governance, offering them a purposeful orientation process can go a long way toward building a strong leadership team.

While slight variations will exist, the basic principles of productive onboarding are universal whether your company is public, private, or not-for-profit.
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Understanding Executive Search Firms

executive search firms

Sometimes, finding the right board member can be a difficult process—especially for larger companies who are looking for a leader with a lot of experience.

Many of the most successful directors already serve on multiple boards, so it’s no easy feat to convince them to consider a new opportunity.

In other instances, organizations simply don’t have the internal resources or network necessary to find the best candidates—not to mention evaluate them. These are the moments when a board might consider utilizing the services of executive search firms.
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What Is Directors and Officers Insurance?

Insurance is pivotal to the existence of any private organization. Companies often have to purchase a variety of coverage options to ensure their business is completely safeguarded: property insurance, liability protection, loss control assurance, and more. Directors and Officers Insurance (D&O) is one more type of specialty coverage that companies with boards of directors should consider purchasing.

Directors and Officers Insurance

According to Investopedia, “Directors and officers (D&O) liability insurance is insurance coverage intended to protect individuals from personal losses if they are sued as a result of serving as a director or an officer of a business or other type of organization.

It can also cover the legal fees and other costs the organization may incur as a result of such a suit.”
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Fighting Boardroom Apathy: What to Do When Your Board Gets Bored

boardroom apathy

At times, board service can be exciting, engaging, and groundbreaking. Board members might have the opportunity to lead the revitalization of a struggling company or discover new avenues for growth.

Board service will occasionally feel tedious or rote, though. The truth is that being on a board involves some repetitive practices, but that doesn’t mean that directors’ eyes have to glaze over during meetings.

So how can you keep things fresh and focused on a strategic future? Here are some of our suggestions on fighting boardroom apathy:

Don’t let the agenda become an afterthought

We’ve shared our thoughts on creating better board agendas here, but this topic is important when it comes to keeping board meetings fresh, too. The agenda-building process should be interactive, and board members need to think critically about how to structure them from month to month.

Rather than adopting a system that just rolls over after every meeting, challenge your board to create agendas that will spark new conversations.
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Strategies for Dealing With a Boardroom Bully

boardroom bully

While many of you may have hoped that bullying behaviors ended with high school, the sad truth is that sometimes even the boardroom has a bully problem.

The tactics won’t be the same as when you were growing up, but they can still cause a great deal of discomfort. Perhaps your boardroom bully constantly cuts people off when they’re speaking or refuses to put topics on the agenda.

Maybe they work behind the scenes to manipulate or intimidate fellow board members. Not only can these behaviors create awkward situations, they can also have a deeply negative effect on your board’s ability to function.

So how do you handle a tricky situation like this? Here are some of our suggestions:
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Best Websites for Board Member Education

board member education

Let’s face it, these days the board landscape is shifting and evolving at lightning speed. It can be difficult to stay up-to-date on all the latest trends in corporate governance.

At Directorpoint, we do our best to help keep you knowledgeable with our weekly newsletter, but where should you go looking for information when questions arise?

We’ve compiled this helpful guide to tell you about some of the most useful board member education and resource websites.

  1. The National Association for Corporate Directors (NACD)

NACD has been providing directors with news and educational information for more than 40 years. Although it takes a paid membership to access all of their materials, they also share articles and information frequently via social media. Their monthly magazine, Directorship, is always chock-full of valuable guidance and news-related activity in the board sphere.
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