Posts in category: Articles

Article originally published in the Philadelphia Business Journal on October 19, 2015

Pennsylvania has been operating without a budget since July 1. As of Monday, it’s been 111 days and still counting. Democratic Gov. Tom Wolf and the Republican controlled legislature have not been able to reach an agreement on the elements of a budget acceptable to both sides.

Without a budget, our children are adversely affected due to a lack of state subsidies for educational programs, including pre-kindergarten. Schools and school districts that have the ability to borrow interim funds from financial institutions face the cost of interest on those borrowed funds until a budget is approved.

Subsidies from the state budget also support many health and welfare organizations that provide services to people in need. As the budget impasse continues, an increasing number of these organizations will be unable to provide those services. Many businesses are hurt by the budget impasse, because they will not be paid for products or services purchased by the state until a budget is passed.

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Article originally published in the Philadelphia Business Journal on October 12, 2015

Many leaders have a significant impact on the lives of others. One of these leaders was Jim White, cross country coach at McFarland High School, whose teams won nine California cross country state championships within 14 years.

White’s story is told in the 2015 film “McFarland USA.” This film was not nominated for any Academy Awards, but would have if “Inspirational Films” was a category. White was a coach who taught his athletes to believe in themselves when everyone else had low expectations of them.

McFarland, California, was an economically depressed community, populated by Mexican immigrants, many of whom worked in fields picking lettuce. The future of many of the children from these immigrant families was not bright, and very few went to college.

Continue reading on The Business Journals.

Article originally published in the Philadelphia Business Journal on October 5, 2015

Many readers are aware of the scandal that has emerged within the last two weeks involving Volkswagen, whose employees purposely installed software on their diesel cars that would give lower than actual readings in the emissions testing process. Not only did this action permit these cars to pass emission tests, the results were also used in VW’s strategy to market their “clean diesel” vehicle technology.

To state that VW’s actions were a gross violation of trust is an understatement. This was not an unintended action that can occasionally embarrass a company who has every intention to do the right thing. This was a deliberate action to violate the law and fraudulently sell cars to customers who thought they were buying vehicles that met mandated pollution standards.

In an article published Sept. 21, Reuters reported that “evidence of increased toxic emissions at VW first emerged in 2014, prompting the California Air Resources Board to start investigating VW. Volkswagen initially denied it was trying to game the inspections, attributing the higher emissions to ‘various technical issues and unexpected in-use conditions,’ the EPA said.”

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Article originally published in the Philadelphia Business Journal on September 28, 2015

What a weekend! The pope captured the hearts of all. His warmth, compassion, humanity and humility, as well as the words and thoughts he shared, many times off script and extemporaneously, touched everyone, from his personal encounters with all whom he met, and at all of the events at which he spoke.

As the pope was driven along the parkway in his specially designed Jeep Wrangler popemobile prior to mass on Sunday, watching parents hand their small children to the members of the pope’s security detail, who in turn presented these children to the pope so he could kiss and bless them, was a sight to behold. I know most individuals of all faiths were moved and felt spiritual watching all these incredible sights.

The Parkway was the perfect venue, even with the very long wait times on Sunday to clear security. Many more checkpoints were needed, as well as additional jumbotrons outside the Francis Festival Grounds, so those who could not enter the Festival Grounds could watch the mass. This was predictable – more checkpoints should have been provided. I feel sorry for the many thousands who had traveled long distances and were not able to enter the Grounds. Had the original estimates of attendance been reached, the screening issue would have been much worse. Predictably, SEPTA outbound train service was overwhelmed Saturday night and after the mass Sunday afternoon. With patience, everyone eventually made it home.

Continue reading on The Business Journals.

Article originally published in the Philadelphia Business Journal on September 24, 2015

The papal weekend is upon us. After months of planning, Philadelphia will host the largest public event in the city’s history. The logistics and security issues are immense, causing a significant number of road closures and major disruptions to the normal flow of city life.

I was not at the numerous planning meetings, which involved dozens of public, private and governmental agencies, so I don’t know the dynamics of those discussions. I wonder whether other alternatives were explored for hosting the papal visit, and if the impact to city life of those alternatives were compared to the extensive impact that is currently underway.

The one obvious alternative that might have been considered would be holding the papal mass (or perhaps two masses) at Lincoln Financial Field, the home venue of the Philadelphia Eagles. This venue can accommodate over 69,000 people, not including thousands of temporary seats on the field. At Lincoln Financial Field, it is much easier to provide security for the pope and attendees. The stadium’s staff provides security for each Eagles game, so the Secret Service would already have an existing security infrastructure on which to build.

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Article originally published in the Philadelphia Business Journal on September 21, 2015

A negative story that goes viral on social media and is covered by numerous print and Internet news outlets is every company’s nightmare. On Sept. 11, a police officer asked a Center City Philadelphia Starbucks barista for the code to the store’s restroom. The Starbucks employee refused to give the officer the code, stating in a voice that other customers could hear, “The bathroom is for paying customers only.” According to the officer, he asked for the code once again, and the employee responded in the “same loud manner and with a smirk, ‘Are you a paying customer?’”

The police officer’s description of the incident was posted by a fellow officer on Starbucks’ Facebook page. Included in the Facebook post was the officer’s comment, “It’s hip for this generation to berate and totally disrespect cops in front of the public and praise cop killers as the heroes of their time.”

The post received thousands of views and comments expressing displeasure and hostility towards Starbucks and the actions of their employee. Of course, Starbucks corporate office apologized to the officer and made the obligatory statement that the police officer’s experience was “not consistent with the welcoming and friendly environment we strive to create for everyone. We have personally apologized to the customer and look forward to welcoming him back to our store.

Continue reading on The Business Journals.

Article originally published in the Philadelphia Business Journal on September 11, 2015

Another year has gone by since Sept. 11, 2001. Three thousand people lost their lives when four commercial aircraft were hijacked by members of al-Qaida, destroying the two World Trade Center towers and doing significant damage to the Pentagon. The fourth aircraft was brought down by courageous passengers in a field in central Pennsylvania before it could reach the White House or Capital Building.

Another year has gone by since family members lost loved ones that day. The young children who lost parents are now teenagers and young adults, having grown up without a mother or father.

I wrote an article a year ago headlined “Reflections of a CEO on the 13th anniversary of 9/11.” I received many emails in response from people sharing with me their personal stories that day. Many urged me to re-run that article on Sept. 11, 2015. I do so in part, below.

No one can ever forget where they were at 8:45 that morning. I was at the Greenbrier Hotel in White Sulphur Springs, West Virginia, attending a board meeting of the American Chemistry Council. A staffer entered the meeting and handed a note to the chairman of the Council. His face turned white as he announced that a plane had hit the North Tower of the World Trade Center. We all gathered around a TV just outside the meeting room and watched with horror as a second plane hit the South Tower. It was then immediately evident to everyone that the United States was under attack. It was announced that the airspace over the United States was now closed, and all aircraft in the air were ordered to immediately land. As then CEO of PQ Corporation, my first thought and only concern was the safety of our employees and those traveling away from home. Our company operates in 19 countries, and it was not uncommon for many of our employees to be traveling within their respective countries and between countries around the world. I called my executive assistant and requested that she ask our travel department to determine if any of our employees were on those four flights or were visitors to the World Trade Center towers or the Pentagon that day. I also asked for a list of employees who were on trips to or from the U.S., as well as employees on flights scheduled to pass over the U.S. between Canada and Mexico. I knew that it would be days before these employees could reach their business destination or home. I wanted to return to corporate headquarters as soon as possible. We couldn’t fly back, so

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Article originally published in the Philadelphia Business Journal on September 8, 2015

One of the most important things an individual can leave to the next generation is their legacy. It can be a value system, moral compass or set of principles on how to lead one’s life that can inspire others. A legacy can also be something you accomplish that improves the future lives of individuals or institutions once you are gone. Having a legacy identifies the broad vision that you want to accomplish from which a roadmap can be developed. The old adage “you can’t get there if you don’t know where you are going” is the reason legacies are important. With a legacy, you can reach into the future.

At this point in my life, as a writer and advisor on effective leadership, as a trustee and director on the boards of three educational institutions and as a mentor to a number of college students and recent grads, my legacy is clear – to help young people develop and reach their full potential. This provides focus in my life – knowing that through my legacy of helping others, I am making a difference.

When I served as CEO of PQ Corporation, one of my board members, Alan Barton, then executive vice president of Rohm and Hass, once asked me what my legacy is – what I wanted to leave the company, its shareholders and its employees after I was gone. I told him I had not thought about it. He asked that I do so and get back to him when I knew what my legacy would be.

After a few weeks of thought, I called Barton and told him that 10 years from now, I wanted the company’s shareholders and employees to say that the leadership team a decade ago built a strong corporate culture, value system and operational platform from which the company could grow, serving its customers with products and services that made a difference in the quality of life. Having that legacy catalyzed my focus on a goal that was in addition to that of increasing shareholder value.

Within all types of organizations, the legacy of the leader increases the sustainability of that organization, because it rallies everyone towards a common vision of the future and guides decisions toward achieving that vision.

Given the myriad of things that need to be accomplished in our companies and organizations, in our communities, in our schools and in the broader society, why aren’t more business and political leaders thinking about their legacies? Why are so many leaders focused on the short term? Why are some leaders focused on what is important to them and not the institutions they serve?

Why aren’t our government, labor and business leaders thinking about the legacy they want to leave future generations? Perhaps these leaders don’t share among themselves the same values or desired outcomes. One leader’s legacy may be different than another’s legacy. Perhaps some political leaders feel that the concept of “legacy,” a long-term vision of the future, will not appeal to the voters and won’t get them reelected. Perhaps, however, they are mistaken.

The status quo may be just fine for many people, including key decision makers. Constituencies have different objectives. Some might feel that an improvement in one area disadvantages them or their group, and therefore they will not implement change.

It takes effective leadership to pull disparate groups together to agree on a common legacy and how to achieve it. For example, the financial condition of the public school system in Philadelphia is in a deplorable state. Charter schools take funds from the public system that has fixed costs over the short-term that cannot be quickly shed.

Classroom teachers need to pay for classroom incidentals out of their own pocket. Each year my wife Jackie and I financially support Alyse Weisbrod, a second grade teacher and her class at the Elwood School in Philadelphia so the students can enjoy a better educational experience than can be provided by the very small and inadequate monetary allowance provided by the school district. We are trying to make a small difference in these children’s lives. This is part of our legacy.

Each year the Philadelphia school district must beg for funds from politicians reluctant to continue to provide financial resources without a long-term sustainable plan. Where is the leadership that can pull together the right group of educators, union hierarchy, politicians and civic leaders who will create a long-term solution to the financial issues of the district?

Philadelphia will never be a preeminent world-class city unless the short and long-term financial issues with the public school district are addressed. Why is this issue not being addressed? The group that solves this problem will be giving a valuable legacy to the city, its residents and its children. When they do, this group of leaders should be celebrated – they did something for the greater good of our city.

Leaders, think about the legacy you want to leave the organization or institution you lead. What do you want to be remembered by? There is no higher calling in life than leaving a meaningful legacy.

Stan Silverman is a writer, speaker and advisor on effective leadership. He is the Leadership Catalyst at Tier 1 Group, a firm of strategists and advisors for preeminent growth. Silverman is vice chairman of the board of Drexel University, a director of Ben Franklin Technology Partners of Southeastern Pennsylvania and former president and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com

Article originally published in the Philadelphia Business Journal on September 1, 2015

A major cause of failure of initiatives, sometimes with catastrophic consequences, is the inability of CEOs, their leadership team or a company’s board to face the brutal facts of their reality, and the lack of a courageous independent thinker who will point that reality out. In the past I would have referred to this individual as a lone wolf, but unfortunately, world events have co-opted that label.

How many times have you wondered what drives the senior management of your company to make the decisions they do? How often have you sat in a meeting talking about an issue, and wonder why no one wants to discuss the elephant in the room – the one factor that could spell the difference between success and failure, but for some reason, the subject is off-limits? Perhaps you are that independent thinker who speaks up, and puts the issue squarely on the table to face the brutal facts of reality.

One of the best examples of a failure to face the brutal facts of reality was NASA’s Jan. 28, 1986 decision to launch the space shuttle Challenger in cold weather, which caused the O-ring seal in the right solid rocket booster to fail 73 seconds after launch, resulting in the escape of burning fuel that destroyed the shuttle. Five astronauts lost their lives, including public school teacher Christa McAuliffe.

The engineers at Morton Thiokol, the contractor responsible for the design of the solid rocket boosters, were concerned about the cold temperature on launch day and recommended that the launch be postponed, a recommendation supported by Thiokol management.

NASA however, objected to Thiokol’s recommendation to delay the launch. The launch of the Challenger had already been delayed a number of times for various reasons. One NASA manager is quoted as saying, “I am appalled by your recommendation.” Another NASA manager is quoted as saying, “My God, Thiokol, when do you want me to launch – next April?”

NASA made unrealistic launch frequency commitments to Congress to secure increased funding for the space program. Thiokol management, facing pressure from NASA, eventually acquiesced and agreed that the launch could proceed. The rest is history. The United States lost the Challenger and its crew due to the catastrophic failure of an O-ring.

President Ronald Reagan established the Rogers Commission (named for its chairman William P. Rogers) to investigate the reasons for the Challenger disaster. The Commission found that NASA, concerned about their inability to meet an unrealistic launch schedule that might jeopardize their Congressional funding, did not face the brutal facts of their reality – launching in cold weather conditions exposed the Challenger to an unacceptable high level of risk.

One member of the Commission, physicist Richard Feynman, clearly saw that two issues within NASA were lack of communication and an understanding of risk. Through his own work independent of the Commission, Feynman learned that NASA management felt that the likelihood of shuttle failure was one in 100,000, compared with NASA engineers, who felt that the likelihood of failure was one in 100. Feynman was the independent thinker on the Commission, wanting to probe an organizational culture in which there was such a large disconnect between management and their technical experts.

Feynman was at odds with Commission chairman Rogers on many issues during the investigation, and when he learned that the final Commission report would not focus on the issues he felt were key to the loss of the shuttle, he decided to write a minority report. If it wasn’t for Feynman, these issues within NASA might not have been identified and addressed.

So, how do organizations ensure that the brutal facts of their reality get addressed? It takes the leadership of the CEO to nurture an environment and organizational culture in which this occurs, where those who have a seat at the table feel that their views are listened to and are welcome, even if they go against conventional wisdom.

Once reality is acknowledged, many times a decision will come down to assessing the risk of various courses of action. When the risk of a course of action is low but the possible result is catastrophic, one should not take the risk. Unfortunately, the NASA decision makers who moved ahead with the Challenger launch did not think in these terms.

On occasion, a courageous independent thinker needs to voice their opinion and try to convince everyone of the validity of the organization’s reality. The views of the independent thinker may not be ultimately adopted, but at a minimum, those views provide a different path, a path against which the majority opinion can be tested, and either confirmed or changed. Under this type of process, the best decisions will emerge.

In the words of renowned Brazilian novelist, Paulo Coelho, “If you want to be successful, you must respect one rule: Never lie to yourself.” Leaders, remember this when one of the independent thinkers on your staff reminds you to face the brutal facts of your reality.

Stan Silverman is a writer, speaker and advisor on effective leadership. He is the Leadership Catalyst at Tier 1 Group, a firm of strategists and advisors for preeminent growth. Silverman is vice chairman of the board of Drexel University, a director of Ben Franklin Technology Partners of Southeastern Pennsylvania and former president and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com

Article originally published in the Philadelphia Business Journal on August 25, 2015

I have received many comments about my Aug. 18 article headlined, “Pope visit: Quit hitting the panic button, Philadelphia, and let’s make people feel welcome.” None of my previous articles have garnered as high a level of response. Many readers felt a need to voice their opinions, and weighed in with their thoughts about the planning for the papal visit.

In my article, I wrote that Philadelphia should have three goals for the papal visit: the paramount goal of ensuring a safe and secure event, have visitors feel that they are welcomed guests and to the highest extent possible, minimize any disruption to the daily lives of the citizens of Philadelphia. These goals are not incompatible. Rather than make it hard for people, you want to make it easy as possible, given the security and logistical constraints. This is what world-class cities do.

As the event approaches, increasingly restrictive plans have been announced regarding a very large security and vehicle perimeter, along with the closure of major portions of I-76 not only in the city, but also in the outlying suburbs. On Aug. 20, Philly.com reported that the city will now permit registered buses to access restricted roads. This is a step in the right direction.

The Ben Franklin Bridge connecting New Jersey and Philadelphia will be closed to vehicle traffic, but will be open to pedestrians. However, all major approach roads in New Jersey leading to the Ben Franklin Bridge will be closed, making it very difficult for people who want to walk the ten mile round trip distance to and from the event to get to the Bridge.

A sampling of the comments following the Aug. 18 article is as follows:

“We live in the Washington, DC area and the [Pope’s] visit to DC is being treated as [the visit of] ‘another very important world leader’. In Philly, it sounds like a lock-down. An opportunity to promote the City is turning into a reason to stay away.”

“We now have a certain notoriety – the wrong kind. Inside the security zone, the Secret Service has the responsibility for security. Outside the security zone, the mayor has the responsibility to effectively move people around. Looks like he has ceded all of that to others.”

“I’m not sure what the city is thinking, but in my mini-poll, no one is even thinking about coming down to the city. … I have friends who work in the medical tower at 17th and Locust Streets, and they have no real practical choice but to shut down. Other friends own restaurants, and they are considering the same thing. They depend on daily deliveries. One city official suggested they do a limited menu. … I feel equally bad for the supposedly 1.5 million visitors. Not only will they be putting in 10 mile days, they will be limited to mini-menus from our fabulous eateries (if they are open). In DC they are not going to this extreme. NYC same thing.”

“Instead of making the event a world-wide recognition of the city and opening it to the world in a positive manner, all you hear about is …more and more restrictions. Many people wanting to see the Pope and attend this one in a lifetime event are older or sicker – they are essentially being kept away. This is a meeting of families: can we see families walking miles upon miles with young children?”

“If [Philadelphia] … cannot handle it and make it a positive experience why … did they choose this city? We run the risk of turning a once in a lifetime positive PR event into a fiasco that will do poorly for the city’s reputation.”

On Sept. 28 after the Pope has departed, the fences have been dismantled and city life returns to normal, the planners for the event will pronounce that the papal visit went as planned and was a great success. This will be the case – for those able to attend.

What will be missed, however, is the opportunity to demonstrate that the papal visit could have been more successful by better accommodating the city’s visitors and making it easier for the residents and businesses of center city to go about their lives with as little disruption as possible. What also will be missed is the opportunity to demonstrate that Philadelphia could have handled the papal visit without much of the city shutting down.

Stan Silverman is a writer, speaker and advisor on effective leadership. He is the Leadership Catalyst at Tier 1 Group, a firm of strategists and advisors for preeminent growth. Silverman is vice chairman of the board of Drexel University, a director of Ben Franklin Technology Partners of Southeastern Pennsylvania and former president and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com

Article originally published in the Philadelphia Business Journal on August 18, 2015

The city of Philadelphia has been planning for months for Pope Francis’ visit on Sept. 26-27. The number of visitors to Philadelphia during the papal visit is anticipated to be about 1.5 million people, including those who are expected to attend the World Meeting of Families, which will start four days prior to the Pope’s arrival.

Philadelphia should have three goals for the papal visit: the paramount goal of ensuring a safe and secure event, have visitors feel that they are welcomed guests and to the extent possible, minimize any disruption to the daily lives of the citizens of Philadelphia. These goals are not incompatible.

The security and logistical issues for the number of expected visitors are complex. In 1979, Philadelphia hosted the visit of Pope John Paul II; so this is not the city’s first papal visit. How did our city manage that event? Have the strategies and action plans of other cities that have hosted papal visits been benchmarked, so Philadelphia can take advantage of their experiences?

So far, only decisions have been announced, but little explanation for those decisions. Given the disruption to businesses and residents, the city needs to be more forthcoming with explanations.

As the event approaches, increasingly restrictive plans have been announced regarding a very large security and vehicle perimeter, and the closure of major portions of I-76 not only in the city, but also in the outlying suburbs. Mayor Michael Nutter has said be prepared to walk the weekend of the Pope’s visit. Philly.com reports that event organizers anticipate 53 percent of the visitors for Saturday’s Mass on the Parkway will be elderly. Will our visitors be able to travel to a point sufficiently close to the Parkway so the distance of their walk to and from the event is reasonable? If they drive, where will they park their cars?

The Ben Franklin Bridge connecting New Jersey and Philadelphia will be closed to vehicle traffic, but will be open to pedestrians. All major approach roads in New Jersey leading to the Ben Franklin Bridge will be closed. NJ Transit published a map Aug. 13 showing that from the foot of the Ben Franklin Bridge to the Parkway where the Pope will celebrate Mass, the walk is five miles, taking an estimated three to four hours.

Assuming that they can get to the Ben Franklin Bridge, how many people will attempt in a single day a 10 mile round-trip walk across the Bridge to the Parkway that will take them an estimated total of six to eight hours, not including the hours spent at the Mass. One wonders how many people who attempt this will not make it and need medical attention.

NJ Transit has stated that their buses will not enter Philadelphia. Why not? Buses are an efficient way to transport people. New Jersey Transportation Commissioner Jamie Fox has stated, “If you are not prepared to walk a considerable distance, you may want to reconsider your attendance.”

Why not sell passes in advance to the many dozens of remote parking lots in the suburbs and beyond, bus people into Philadelphia using I-76 and across the Ben Franklin Bridge, drop them off near the Parkway outside the security zone and at the end of the day, bus them back to their cars? Does SEPTA and NJ Transit have a sufficient number of buses? If not, borrow them from other cities. Is SEPTA and NJ Transit using the maximum capacity of their rail systems?

With major portions of the city closed to vehicular traffic, many businesses that will cater to our visitors, such as hotels and restaurants, are wondering how their employees will get to work. Restaurants are also concerned about fresh food deliveries, and how trash will be picked up each day.

I am sure there are good reasons for the decisions that have been made. These reasons need to be explained to the public, and why alternatives that would have made logistics easier were not chosen.

The visitors to our city are our guests, and we should make them feel welcome. That’s how guests are to be treated – the way world class companies treat their customers. Rather than make it hard for people, you want to make it as easy as possible, given the security and logistical constraints.

In the past, when statements were made calling into question the capacity of various Olympic Game venues to effectively handle crowds, people chose not to attend. They were scared away by all of the negative talk. They didn’t feel welcome. Is there a danger that this will occur in Philadelphia? Only time will tell.

On Aug. 1, the Huffington Post ran a story headlined, “Philadelphia in a state of near panic as Pope’s visit nears.” The headline certainly does not cast our city in a favorable national light.

Philadelphia should make all of its visitors feel welcome, while maintaining the safety and security of the event. That is what preeminent cities do. This is a great opportunity for Philadelphia to shine. Hopefully, it will.

Stan Silverman is a writer, speaker and advisor on effective leadership. He is the Leadership Catalyst at Tier 1 Group, a firm of strategists and advisors for preeminent growth. Silverman is vice chairman of the board of Drexel University, a director of Ben Franklin Technology Partners of Southeastern Pennsylvania and former president and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com

Article originally published in the Philadelphia Business Journal on August 11, 2015

Should a retiring CEO continue to remain on the board? If that individual holds the position of chairman and CEO, should they remain as chairman once they vacate the CEO position? These are questions that boards often deal with at the time of CEO transition. How does a lingering CEO impact the newly appointed one?

When the former CEO remains on the board, especially in the case where they retain the position of chairman, there is a high probability that their presence could have a chilling effect on the actions of the new CEO. The last thing a new CEO needs is to be second-guessed by someone whose strategies are undergoing review and perhaps being changed. The retired CEO has a vested interest in not having the strategies they put in place changed, even if change is necessary to move the company forward. This is just human nature. The other board members won’t know if the retired CEO is challenging the new CEO because of their “ownership” in a former strategy, or if they have a real issue with the new CEO’s strategy.

If the retiring CEO retains the position of chairman, it is likely little will change regarding strategy unless driven by the chairman. The chairman may cede operational control to the new CEO, but ceding responsibility for strategic direction is not likely. However, in the case of a privately held company where the individual holding the position of chairman and CEO has a controlling interest in the company, appointing a CEO for operational matters is not uncommon. Because of their controlling interest, the chairman often retains ultimate responsibility for strategic direction, unless this responsibility is also ceded to the CEO.

Why do boards permit retired CEOs to remain as board members, or continue to serve as chairman of the board? Perhaps there is the thought that the board does not want to lose the business knowledge of the retiring CEO. This can be addressed by asking the retiring CEO to be available for consultation after retirement, at the option of the new CEO.

Perhaps the board feels that retirement would be an easier transition for the individual if they remain a board member. The board must make their decisions based on what is in the best interest of the company and its shareholders, not the retiring CEO.

The Conference Board’s September 2010 article by Jason D. Schloetzer titled, “Retaining former CEOs on the Board” shared a number of perspectives from board members and others on these issues:

• “Former CEOs could dominate the board agenda …”
• “It is very difficult to discuss steps that may reverse a course of action with a board that includes the person who made the original decision …”
• “Former CEOs can hardly ‘contribute constructively to board discussions without being concerned that they will undercut the effectiveness of their successors.’”
• “What you have now is a CEO who is neither gone nor forgotten.”
• “Former CEOs make excellent directors – of other companies.”

Schloetzer’s perspectives are very consistent with my own, and others who have experienced former CEOs remaining on the boards of companies they had once led.

When I was named CEO of PQ Corporation, the retiring CEO left the board. Many changes needed to be made to get the company growing again. I can only imagine his reaction if he had continued to sit on the board as I outlined my plans for change.

A similar issue exists when a senior executive is promoted to a higher position within the company. When I was appointed president of PQ’s Canadian subsidiary, the changes I made were challenged by the former subsidiary president, now at a senior executive position. My response was that the business environment had changed, and he would have made the same changes had he remained in that position. This was a face-saving way for him to accept the changes I was making.

The most important job of any board is to hire and fire the CEO. Board members should not encumber the new CEO’s chance to be successful by keeping the retired CEO on the board. Don’t expect major change if the retiring CEO retains the position of chairman of the board. Except in the case where the CEO has a controlling interest in the company, permitting the CEO to remain on the board or retain the title of chairman is not in the best long-term interests of the shareholders.

Stanley W. Silverman is a writer, speaker and advisor on effective leadership. He is the Leadership Catalyst at Tier 1 Group, a firm of strategists and advisors for preeminent growth. Silverman is vice chairman of the board of Drexel University, a director of Ben Franklin Technology Partners of Southeastern Pennsylvania and former president and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com