Ray McCormick, chief executive officer of $30-million American Sweeteners Inc., has weathered three different boards during his company's 15-year history. The experience has taught him a valuable lesson: "Anyone who is thinking about setting up a board should be prepared to commit at least 10% of his time to [board-related matters]," he states. "Otherwise, you won't get the right people and you won't get them involved in running your business."
McCormick followed his own advice when he set up his latest, and most successful, advisory council, an informal group of six individuals, including himself. Potential members were first identified through third-party introductions, then interviewed twice by McCormick. Once on board, council members attend four meetings a year at the company's Frazier, Pa., headquarters.
Unlike many other CEOs, however, McCormick meets with each member of his council between sessions. It is a responsibility that he feels he shouldn't delegate. "I can't say to a very important guy that I'm pleased he'll be working with us, but I'm going to turn him over to my assistant. . . . We're dealing at a certain level with top people, and we have to give them all the tender loving care they deserve."
Perhaps the most time-consuming part of this process, McCormick says, is deciding what issues should be placed on the council's quarterly agendas, and then compiling background reports on these items for the board. For example, American Sweetener's council recently reviewed the company's strategic planning process, discussed the idea of changing banks, and debated a proposal for a leveraged buyout acquisition.
Do these kinds of responsibilities take away from the time McCormick needs to run his company? The answer is clearly no. "What we're really talking about is running the company," he states. "Strategy, direction, objectives, programs, all the key issues we discuss at our council meetings are very important parts of the management process." The payoff for McCormick is obvious. If you are willing to do the work necessary to set up a good board, he says, "you'll wind up with a better company."