Editor’s Note: In a first-of-its-kind exercise, CBM and AlixPartners partnered to identify the Top 20 Value-Creating Directors in America, using an approach that relies on total shareholder return (TSR) relative to peers for the companies these board members help guide. See the Full List >
John Surma has served on corporate boards for about 20 years, but the best advice he got on being a good director was delivered to him early in that stretch by the late John McGillicuddy, who at that time was head of Manufacturers Hanover Trust and on the board of U.S. Steel, where Surma was chair and CEO.
“I watched John,” says Surma, “and he said that as a director, ‘You should only ask questions you need to know the answer to, and only ask people who’ll know the answer. Don’t embarrass people.’”
Surma has carried forward such principles of human interaction in his own board service. “Boardroom behavior and demeanor” is important for an effective body, he says. “It’s a team sport. A best-in-class board is the total package of the board, and less about individuals.”
Nevertheless, Surma says that his contributions have relied greatly on his own experience as a corporate executive, member of a half-dozen corporate and many not-for-profit boards, and some 70 total years of corporate board work.
“I’ve seen corporate contentiousness, activism, plant closures and new technologies—I go back to dial-up Internet access, and now I’m dealing with quantum computing,” he says. “I’ve been through all of that. And that experience is one of the most important things.”
Also foundational for him is to help boards do just three things: select the company’s leader, agree on the strategy conceived by that leader and deploy shareholder capital within that strategy at the direction of the leader. “Those are the things that really make a difference in terms of value creation for shareholders,” Surma says.
An important part of effective board service, he says, is being information-prepared. There are still physical pre-meeting board books given to directors at some companies, and online data availability can overwhelm directors, he says. But “I like to see news-clip feeds and a lot of [other] granular stuff and put it in my database and see what comes out.”
Often, Surma says, he’s “looking for something that seems to go in another direction. I have an internal inconsistency meter. If I see something that seems out of sync, that’s when I might go a little deeper and ask a question” of management.
His hacks for effective board meetings include dealing with the most important and potentially most time-consuming agenda items at the beginning. “We need enough time to do the board’s business, for example, talking about succession,” Surma says. “It would be normal to talk about that at the end of the agenda. But I want CEOs to be at the top of their game and fresh and ready. And if you try to squeeze it in at the end, will you get the whole story?”
While he understands the interest in corporate board membership that is demonstrated by more and more people, Surma urges potential new directors to take a difficult—but usually rewarding—path of getting relevant experience elsewhere first.
“If you want to be on the board of ExxonMobil and you’ve never been on a United Way committee,” he says, “you need to do some prep work. Being on a well-run, prominent not-for-profit board is a good thing, and very similar to being on a large company board. There are also small bank boards and hospital boards.
“Aspiring is one thing. Being ready for it is something else. You need to get ready for it on your own and get some experience.”
