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Compensation-Related Challenges Not What Corporate Directors Anticipate, Says Crisis Expert Richard Torrenzano at Directorship Magazine Board Forum
NEW YORK, October 27, 2006 – The biggest crisis corporate board members will face in the next six months is executive compensation – but not in the way most people anticipate, says crisis communications expert Richard Torrenzano, chairman and chief executive of The Torrenzano Group.
"Directors currently focus on compiling and comparing compensation data, and that is important. But what they're not doing is communicating their long process and deliberations to their key constituencies such as investors, analysts and media," he told more than 200 public company directors who attended the annual Directorship magazine Boardroom Forum on October 25.
"Reasonable people can differ on important issues. However, good communication during the course of an incident, and throughout the year, can moderate extreme reactions by ensuring key constituencies understand the rationale," he continued.
"To be successful, directors – and particularly compensation committee chairmen and non-executive chairmen – will need to be able to clearly articulate their decisions to investors, analysts and media.
Furthermore, they must explain the process and analysis through which these decisions were made." Elaborating on these messages throughout Directorship's crisis panel, Mr. Torrenzano outlined his ten-point plan for corporate directors addressing such issues:
Mr. Torrenzano, who has headed his own firm for more than 11 years, formerly was a key executive at The New York Stock Exchange for more than a decade, serving as a member of the exchange's management and executive committees, and as chief spokesman.
He has managed the public policy strategies for two of the most significant global crises since the Great Depression: The stock market crash of 1987, as well as the recapitalization of Long-Term Capital Management, directed by the Federal Reserve Bank and financed by a consortium of 14 leading financial institutions.
Currently in its fifth year, Directorship's Boardroom Forum, Agenda 07, previews the major governance issues that will dominate the next year's agenda, including issues related to regulation, compensation, audit and nominating committee best practices, succession planning, crisis management and the media, litigation and liability.
Other forum speakers included former Securities and Exchange Commission chairmen Harvey Pitt and Richard Breeden; Home Depot founder and current chairman and CEO of The New York Stock Exchange member firm Invemed Associates LLC, Kenneth Langone; Playboy chairman and CEO Christie Hefner and CNBC personality Jim Cramer.
About The Torrenzano Group
The Torrenzano Group, headquartered in New York City, specializes in building and protecting corporate reputations, helping clients grow their business and enhancing shareholder value. With decades of in-depth experience and knowledge in markets and media and a hands-on senior level philosophy and staff, The Torrenzano Group "helps organizations take control of how they are perceived™."
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