The new GM Board of Directors meets today for the first time. Here are three pieces of advice for new GM Board Chairman, Edward Whitacre, Jr.
First, Whitacre needs to have a frank discussion with the Board, as well as senior management at GM, about the role of the Board relative to management. The Board needs to exercise good governance and control, but it can't be meddling in numerous operational decisions at GM. Whitacre needs to lead an open conversation about how they will delineate the boundaries between management versus Board responsibilities.
Second, Whitacre must discuss Board process with his team of directors. How will he run the Board meetings? What is expected of each director? What role(s) will each director play? What information will be made available to the directors, and at what time? How will Whitacre encourage candid dialogue and the expression of dissenting views?
Third, Whitacre must establish a process for evaluating CEO Fritz Henderson over the coming months. What criteria will be used to evaluate Henderson? Whitacre should establish those criteria clearly, as well as marking out clear milestones for Henderson to strive to achieve. He should also establish the timing of the CEO review process. In other words, how often will the Board formally review Henderson's performance? Given the situation at GM, an annual review seems inadequate. Establishing quarterly milestones and reviews seems more appropriate given the depth of the crisis.