Turn Your Directors into Floor Walkers
BY Ralph Ward
Directors walk the walk if they're on the board of Atlanta-based handyman giant Home Depot. The HD board sets itself a formal requirement that each director will personally visit a minimum number of stores yearly. Jerry Shields, an HD investor relations employee, notes that "the directors are supposed to walk 20 stores a year. It's a self-imposed rule. The rationale is that this is the only way they can be engaged with the stores, to get direct info on morale, training, customer service and merchandising issues." The directors initially keep mum when visiting the store, looking and acting like just another customer. Usually they make themselves known to chat with the employees, though.
Does this pressing the flesh help directors gain a better fix on real-world issues facing Home Depot? "Without question," says Shields. The policy is taken very seriously by the board, too. Director Johnnetta Cole made the business news in April when she announced, with regret, that she had to resign from the Home Depot board. Her reason? Her day job as an anthropologist at Emory University left her too little time to make all the store visits needed.
Such formal shoe leather requirements of the board remain rare, but they are often an informal part of the director's job description. At U.S. drug store giant CVS, the board sets itself a strong (though unwritten) mandate to visit as many stores as possible. "When we get into a city, we all make an effort," says director Sheli Rosenberg. "I go out of my way to make store visits, and even go back to make re-checks. It gives you a much better sense of what the product is, how the management philosophy is carried out, and how the stores are laid out. I like chatting with the people, but I still try to be anonymous."
Editor's note: This board approach has uses beyond the retail sector, through product usage and customer visits. Think of how many changes the directors of computer makers would demand if they had to go through their company's regular tech support channels!