Analyzing DowDuPont’s New Leader’s Short-Term Role
Originally published by: Forbes — April 5, 2018
by George Brandt
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Editor’s Note: When Andrew Liveris shared he would step down as executive chairman of DowDuPont in April, it was announced that Jeff Fettig, the company’s co-lead independent director, would assume the role as a nonemployee executive chairman. The following article summarizes Fettig’s biggest challenges as he assumes this new role.
Generally, the chair or lead director runs the board and the chief executive runs the company. An executive chair has a potentially confusing foot in both camps, running the board and directly supervising the CEO. In DowDuPont’s case, Jeff Fettig took over on April 1 as “non-employee Executive Chairman”. Not joking. This does however reflect the temporary nature of his real job leading into the coming three-way split – setting the new companies and CEOs up for success.
- The CEO is an employee.
- The chair is not an employee. If the CEO is also the chair, there should be a non-employee lead director.
- An executive chair is an employee, suggesting the need for a lead director as well.
Thus, “non-employee Executive Chairman” is a contradiction in terms.
Executive onboarding is the key to accelerating success and reducing risk in a new job. People generally fail in new executive roles because of poor fit, poor delivery or poor adjustment to a change down the road. They accelerate success by 1) getting a head start, 2) managing the message, 3) setting direction and building the team and 4) sustaining momentum and delivering results.
In Fettig’s case, his personal risk pales in comparison to the risk to the three new companies. In many respects, his real job is to set up for success the new CEOs of DowDuPont’s three spin-offs: Corteva Agriscience, Specialty Products, and Materials Science. These are going to be brand new corporations with $15B+, $20B+ and $45B+ in revenue on day one. Fettig needs to oversee the set up of three new boards, hopefully following generally accepted practices and roles:
- Accountable for governance and oversight (noses in.)
- Approve strategic, annual operating (P&L, cash flows, balance sheet), future capability, succession, contingency and compensation plans.
- Advise on everything else (hands out.)
Accountable for strategic, operating, organization plans/results, culture.
Lead Director/Chair accountable for (“owns”) board management
- Operations (committees) & board organization.
CEO responsible for board management (“does the work”)
- Prepare/brief in advance, manage meetings, follow-up.
- Manage board, group, one-on-one, board two-step (Step 1: Test or consult. Step 2: Sell.)