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GARY LIEBL : It's Lonely, Risky at the Top : CEO Coach Helps Directors Play Game Fairly and Win

October 01, 1990|Anne Michaud | Times staff writer

At the suggestion that the job of corporate director is becoming a job nobody wants, Gary Liebl smiled and poked around in his briefcase. He was hoping this would come up.

He pulled out a news story about three Allergan Inc. shareholders who filed a lawsuit seeking to force 11 officers and directors to return their salaries for decisions they made that impacted the company's stock price. "This is the kind of litigation that does dissuade a lot of people from taking the risk," he said, adding cautiously that he is not making a judgment on this particular case. "Even with (directors and officers) insurance, there's much pain to be borne."

Bad publicity, anxiety and public embarrassment, just to name a few. Add hostile takeovers, corporate raiders and greenmail to the list of hazards and it's clear that directors have a tougher job today than before.

Liebl has led a push to organize Orange County directors and would-be directors by forming a new chapter of the National Assn. of Corporate Directors. It is the 15th regional chapter formed since the organization opened its doors in Washington, D.C., in 1977. The organization has 2,000 members nationally. The chapter, which met for the first time last week, will hold five dinner meetings in the coming year and invite speakers. As important as the speakers will be to the group's mission of educating directors is the fact that local business leaders will be gathering in the same place a few times a year, Liebl said.

He said his experience as former head of Cipher Data Products of San Diego--which was acquired in a hostile takeover by Costa Mesa-based Archive Corp. earlier this year--showed him that directors need a peer group. Among other things, they can share names of trusted investment bankers and attorneys when time is short and a takeover bid has come as a surprise.

So it was not a surprise that the invitation Liebl sent out to prospective members of NACD quoted a recent Harvard Business Review: "Every time you find a business in trouble you will find a board of directors either unable or unwilling to fulfill its responsibilities." More than 100 local business leaders took the challenge.

Liebl, now chairman of Systech Corp. of San Diego, lives in North Tustin. He recently spoke with Times staff writer Anne Michaud about his views on life as a corporate director.

Q. Why are you forming an NACD chapter here?

A. The environment has become significantly more complex. The issues of risk have become far more complex. Federal regulations are more complex when you get into things like environmental controls and the like. The capitalizations of companies are subject to much more change than they were 10 years ago with, until recently, the seemingly attractive junk bond methodologies for recapitalization, the leveraged buyouts, takeovers of all types including hostile takeovers.

As a consequence, there is a question of where does a professional board member go if he or she wants to understand alternatives, to understand rules, to understand practices, to make informed judgments. That's what NACD represents: an opportunity to have participation in a formal organization that addresses those kinds of issues and an opportunity to hear from very informed speakers.

In addition to that, there is the opportunity to have a peer group of fellow board members who share the same kinds of challenges and responsibilities. The meetings can be opportunities to discuss these kinds of issues.

Q. Who will you choose to speak to the group?

A. The feedback we've had from our Orange County directors has indicated to us that they'd like to hear from CEOs who really have experiences that they themselves may have, and from professionals who can advise in areas that relate to responsibility and to potential risk and liability as well.

We will be bringing to Orange County over the next 12 months speakers who are very prominent CEOs, who have experience and visibility, individuals who are strong leaders, who can recount experiences and challenges and solutions.

We will also be talking to professionals such as attorneys who have specific experience in things like hostile takeovers and recapitalizations and government regulation.

Q. You have said that one of your chapter's goals is education. What is the point of the education?

A. A director in a company is not expected to be a rubber stamp who attends a quarterly board meeting and nods when told to nod, but rather to be a proactive participant in the process. The director carries the burden and the responsibility of guiding a company's directions strategically as well as tactically, but particularly strategically, to ensure long-term success. That's a big responsibility. One must understand a number of things. To the extent that we can, we're going to provide resources, speakers and forums and panels that will advise directors in those areas.

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