business life careers
FORTUNE
Board seats are going begging
By Anne Fisher
WANTED: OUTSIDE DIRECTORS. To U.S. companies had such limits. Now “It’s a way to broaden their own talent
start immediately. Audit experience a plus. more than half (51%) restrict CEOs to pool and train people for succession to
Candidates should be prepared to spend at no more than two outside directorships. the top job. It also lets senior managers
least 200 hours per year on board business Risks aside, of course, board mem- learn the ins and outs of Sarbanes-Oxley
and act as watchdog on behalf of the SEC. bership is still a terrific training ground on someone else’s nickel. So directors
Willingness to report management miscon- for top management and an invaluable on the whole are skewing younger and
duct a must. Average compensation: networking tool. So if you’ve ever han- more diverse than in the past.” Indeed,
$57,000/year. Potential personal liability: kered to serve on a board but aren’t (yet) the Korn/Ferry study shows that 82% of
unlimited. Preferred: women, minorities, and a chief executive, now may be your FORTUNE 1,000 boards now include at
anyone not a personal friend of the CEO. chance. Companies are looking at C- least one woman, up from 63% ten
Imagine that want ad, and you have a level executives and division heads, says years ago, and 76% of big-company
clue to the game of musical chairs now Korn/Ferry vice chairman Joseph boards now boast at least one member
going on inside boardrooms all across Griesedieck, who has recruited hun- of an ethnic minority, a big jump from
America. Turnover has reached record dreds of outside directors. “If you’re a 44% in 1994.
highs, with 50% of outside directors Let’s say you think you could handle
quitting at FORTUNE 1,000 compa- the job. How can you minimize your
nies. The reasons aren’t hard to fig- exposure to liability if the company
ure out. Since Sarbanes-Oxley turns out to be the next
and other antifraud laws and WorldCom? The most impor-
regulations have taken effect, tant step is to check out the
serving on a board is a far more directors-and-officers insurance
time-consuming proposition policy offered by the company.
than ever before—and a far “There are all sorts of variations.
riskier one. Witness the 12 for- Some policies, for instance,
mer WorldCom directors who won’t pay out in the event of a
agreed to pony up $25 million bankruptcy if executives plead
of their own cash to settle share- guilty to crimes,” says attorney
holder claims. The role of out- Rains. “Get someone knowl-
side director has undergone a edgeable, like an insurance bro-
big change, “from trusted advi- ker who understands the claims
sor and confidant to compliance issues involved, to look at your
officer,” says Darryl Rains, co- coverage. And make sure you
chair of the securities litigation have supplemental coverage,
practice at Morrison & Foerster in known as Side A, designed to
San Francisco. “You now are expect- At many senior manager shield outside directors.” Beyond that,
ed to be a cop on the beat and with a reputation look closely at the company’s books.
report any suspected misconduct by big companies as an expert in “Make sure you understand the account-
management. A lot of people just something, you’re ing issues and know what judgments are
aren’t comfortable with that.” 50% of the a good candidate,” being made,” Rains advises. He adds,
Indeed, Simon Francis, a part- outside directors he says. rather ominously, “Of course, due dili-
ner at executive-search firm Other head- gence isn’t a panacea.” The WorldCom
Christian & Timbers, attributes a have quit. hunters agree. Of directors probably thought they did
lot of empty board seats to con- the four new di- their homework too. Gulp.
flicts of interest, perceived or real. “For rectors Christian & Timbers recently One bright spot in all the boardroom
example, it’s now viewed as bad form found for Timberland, the maker of out- turmoil: Because it’s a tougher job than it
for the chairman of the audit committee door gear based in New Hampshire, used to be, pay is going up. Korn/Ferry’s
to also sit on the executive-compensa- only one, Terdema Ussery, is a CEO, and study says it now averages $57,000, a
tion committee, or vice versa,” he says. he’s an unconventional one: He runs the 32% leap from 2002 (the year Sarbanes-
“You can’t be both gamekeeper and Dallas Mavericks basketball team. The Oxley was enacted), and in very large
poacher.” Further shrinking the pool of three others are the CFO of 7-Eleven and companies it can reach $100,000.
outside-director candidates are restric- two division presidents from Microsoft Perhaps not surprisingly, the post of
tions on how many outside boards a and Starbucks. “Lots of companies are audit- committee chairperson now pays
CEO may join. In 2001, according to an encouraging their executives below the an extra $7,745, on average. That’s hard-
exhaustive study of corporate boards’ CEO level to go sit on other companies’ ly a windfall, but it’s 82% higher than
composition by executive-search giant boards,” notes Christian & Timbers before Eliot Spitzer came along.
Korn/Ferry International, just 23% of managing partner Kerry Moynihan. FEEDBACK askannie@fortunemail.com
F O R T U N E • May 16, 2005
CHRISTIAN & TIMBERS PRESS RELEASE
The Timberland Company To Expand Board Of Directors
STRATHAM, NH – April 25, 2005 -- The Timberland Company today announced the nomination of four new
members to the Company’s Board of Directors. Kenneth T. Lombard, Edward W. Moneypenny, Peter R. Moore and
Terdema L. Ussery, II will stand for election at the Company’s Annual Meeting on May 19, 2005. The Board has
also nominated for re-election seven of the nine Directors that are currently serving. John E. Beard and John F.
Brennan have attained the Board of Directors’ mandatory retirement age of 72 and will not be sitting for re-elec-
tion.
Mr. Lombard is President of Starbucks Entertainment, a division of Starbucks Corporation, in Seattle, Washington.
Mr. Moneypenny is Senior Vice President – Finance and Chief Financial Officer for 7-Eleven, Inc. in Dallas, Texas.
Mr. Moore is Corporate Vice President of the Home and Entertainment Division of Microsoft Corporation in
Redmond, Washington. Mr. Ussery is President and Chief Executive Officer of the Dallas Mavericks basketball
team, also in Dallas.
“I am very pleased to announce the nomination of these talented individuals to our Board,” said Jeffrey Swartz,
President and Chief Executive Officer, The Timberland Company. “Between them, they offer a powerful combina-
tion of leadership experience, business success and community consciousness that will strengthen and complement
our current Board.”
A graduate of the University of Washington, Mr. Lombard started his career in real estate as a regional director for
Grubb & Ellis Real Estate Company in Los Angeles. Before assuming his current position as head of Starbucks
Entertainment in 2004, he was co-founder and president of Johnson Development Company, an organization
focused on urban retail development in minority communities. Mr. Lombard assisted in establishing UCLA’s
minority business leadership program and has been active with the California Community Foundation and the Los
Angeles Education Alliance for Restructuring.
Prior to joining 7-Eleven, Inc., Mr. Moneypenny spent more than 25 years in the energy industry. He served in a
variety of senior executive finance positions for companies such as Covanta Energy Corporation, Florida Progress
Corporation, Oryx Energy Company and Sun Company. He graduated from St. Joseph’s University in
Philadelphia, PA and received his master’s degree from the University of Illinois. Mr. Moneypenny began his career
at the accounting firm Coopers & Lybrand.
In his current position at Microsoft, Mr. Moore is responsible for all worldwide marketing and game development
for the company’s XBox business. Prior to joining Microsoft, he was President and Chief Operating Officer of Sega
of America, Inc., and before that spent six years at Reebok International Ltd. Mr. Moore started his career at Patrick
USA, the U.S. subsidiary of the French sportswear company. He graduated from Madeley College in Madeley,
England, and received his master’s degree from California State University, Long Beach.
In addition to his current position as President and Chief Executive Officer of the Dallas Mavericks, Mr. Ussery is
also Chief Executive Officer of HDNet, the nation’s first high-definition television network. He has extensive expe-
rience in the sports industry, having served as Commissioner and General Counsel of the Continental Basketball
Association and President of Nike Sports Management before joining the Mavericks in 1997. Mr. Ussery graduated
from Princeton University, received his master’s degree from the John F. Kennedy School of Government at Harvard
and his J.D. from the University of California. He currently sits on the boards of the Dallas Symphony Orchestra,
the Texas Higher Education Coordinating Board and the Princeton University Board of Trustees, among others.
Additional information regarding these nominees is contained in the Company’s definitive proxy statement on
Schedule 14A which was filed with the Securities and Exchange Commission and also mailed to the Company’s
stockholders on April 15, 2005. The definitive proxy statement is available free of charge on the Securities and
Exchange Commission’s website, www.sec.gov or by contacting Susan Ostrow at the phone number provided
above.
Timberland (NYSE: TBL) is a global leader in the design, engineering and marketing of premium-quality footwear,
apparel and accessories for consumers who value the outdoors and their time in it. Timberland® products offer
quality workmanship and detailing and are built to withstand the elements of nature. The Company’s products
can be found in leading department and specialty stores as well as Timberland® retail stores throughout North
America, Europe, Asia, Latin America, South Africa and the Middle East. More information about Timberland is
available in the Company’s reports filed with the Securities and Exchange Commission (SEC)
www.ctnet.com