Key Steps To Getting Governance Right

Boardroom Summit Panel
From left: Maggie Wilderotter, Patricia Russo, Peter Browning (Credit: Ben Hider)
Lessons from three veteran directors who have collectively seen more than 75 boards through virtually every scenario a company can face.

IPOs, acquisitions, divestitures, shareholder activists, CEO turnover—board directors are navigating an era of unparalleled challenges. At the recent Boardroom Summit, three distinguished panelists—Peter Browning, lead director at ScanSource and board member of GMS; Patricia Russo, chair of HP and a board member at GM, Merck and KKR; and Maggie Wilderotter, chair of DocuSign and board member of Costco and Sana Biotechnology—shared insights from decades of collective board experience.

Their panel discussion offered a masterclass on how boards can provide steady guidance and leadership during turbulent times. Below are key takeaways for CEOs and board directors looking to maximize their impact.

1. Cultivate Trust in the CEO-Board Relationship

As Wilderotter noted, the dynamic between the CEO and the board is foundational to good governance. Directors must help CEOs steer the company while also holding them accountable, which requires trust, transparency and mutual respect. “The No. 1 priority for every board member is to have the right CEO in the right seat on the bus at the right time and evaluate that CEO as a leader for the company,” she said. “But also, in the context of growing shareholder value, which is what life is all about on our boards, to make sure that that CEO can listen and learn from the board, participate with the board and also help guide the board based upon what he or she does every single day.”

Russo shared a powerful example from her time as CEO of Lucent, describing a trial by fire that shaped her perspective on the CEO-board dynamic—and taught her that hand-wringing must be left at the door. “My first CEO role, I stepped into the job maybe 30 days before the telecommunications industry crashed. I was a new public company CEO and it was a crisis like I could have never imagined,” she said.

Patricia Russo, HP chair and board member at GM, Merck and KKR

“Everything was wrong—we were burning cash, we had an SEC investigation, the industry was cut in half, our customers wanted to bail on us. Three firms came in to tell me we had to file for Chapter 11 or we weren’t gonna make it.” Russo had to rely on her board. “I happened to have a great board whose reaction, to a person, was ‘how can we be helpful?’ That taught me when I got to the other side, the importance of being constructive and productive.” She also learned the importance of keeping hand-wringing at the door. “I didn’t have any hand-wringers. Hand wringers are the people who are worried about themselves, not the company.”

Key Tip: The CEO-board relationship flourishes when directors act as trusted advisors, offering constructive input without undermining leadership.

2. Encourage Dialogue—Even When You Disagree.

Boardrooms are inherently diverse, bringing together individuals with differing experiences, perspectives and even political beliefs. But to guide a company effectively, this diversity must lead to thoughtful, actionable dialogue—not conflict.

“Sometimes you hear something in a boardroom and think, ‘That’s the stupidest thing I’ve ever heard,’” Wilderotter quipped. “But what comes out of your mouth is, ‘Help me understand why you think that’s a good direction for us to go in.’ Because I think what you want to do as board members is continue to make sure the dialogue doesn’t get shut down, especially when you’re making key decisions and critical decisions.”

Maggie Wilderotter, chair of DocuSign and board member of Costco and Sana Biotechnology
Maggie Wilderotter, chair of DocuSign and board member of Costco and Sana Biotechnology

Browning emphasized the role of the lead director or non-executive chair in fostering this environment: “Every director should feel heard, and disagreements should remain constructive. If a board can’t reach consensus, it falls to the lead director to mediate and ensure the discussions are productive.”

Russo added that CEOs play a vital role in shaping board dynamics, especially by crafting agendas that prioritize meaningful debate. “The best engagements are when the presentations that the CEO allows to come forward are no more than five or six charts. They’re not reams of material with lots of fine print, but major thoughts—‘Here’s what I’m thinking’—and then lots of time for engagement and debate.”

Key Tip: Directors must create space for candid, respectful dialogue—especially when opinions differ. Lead directors should address disruptive behavior head-on to preserve board cohesion.

3. Be Brave in Decision-Making

Boards must often make decisions that are unpopular in the short term but necessary for the long-term health of the company. “There was a period of time when a lot of pharma companies were cutting R&D to get their stock prices up but we didn’t go down that path at Merck,” said Russo. “Our stock languished at $60 to $65 a share because we sat around the table and said, ‘No, we’re not going that way.’ We focused on the long term. Merck ended up with the biggest oncology drug on the market today called Keytruda, and the stock is at $120. But that kind of thing takes a lot of courage.”

Peter Browning, Lead Director at ScanSource and Board Member of GMS
Peter Browning, Lead Director at ScanSource and Board Member of GMS

Courage is also critical when dealing with shareholder activists, noted Browning: “Activists aren’t new, but they’ve become more sophisticated. Boards must listen carefully to shareholder concerns but also resist being driven solely by short-term stock performance. The goal is sustainable value creation.”

Key Tip: Directors should evaluate strategic decisions with an eye toward the company’s long-term goals, even when external pressures demand quick results.

4. Tailor Governance to the Moment

Effective board leadership is not one-size-fits-all. Every board operates differently, and each CEO has unique needs. The key is for directors to adapt their approach to the specific circumstances of the company. “No two boards are the same,” Browning said. “What works on one may not work on another. But it gets back to the point you made: the quality of an effective, high-performing board is the CEO who is, first of all, open, candid, forthright and trusts the board and, second, does everything he can to get the most out of them.”

Wilderotter shared an experience she had as a board member with Gaylord Entertainment. “We had a CEO who was not doing a great job, and we had to move fast. The board decided we were going to replace that CEO. My father, who had recently retired, became the interim CEO. It was a family-oriented company, and this unconventional choice worked because it fit the company’s culture.”

Key Tip: Boards must remain flexible, adjusting their strategies and governance style to fit the company’s culture, leadership and market conditions.

As Russo summed up, “When you’ve walked in the CEO’s shoes, you understand the pressure and complexity of the role. Boards can be most effective when they balance oversight with support, acting as a stabilizing force through both challenges and opportunities.”


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