Super Directors to the Rescue?

Robert Pozen has been a director for Fridley-based Medtronic since 2004. He’s also a financial expert: a former associate general counsel for the Securities and Exchange Commission, a lecturer at the Harvard Business School, and chairman of MFS Investment Management, a $150 billion Boston-based money manager for individual and institutional investors.

In early December, Pozen spoke to the Twin Cities chapter of the National Association of Corporate Directors about the financial crisis still roiling the country. He drew in part from his recently published book, Too Big To Save? How to Fix The U.S. Financial System. After his speech at the Minneapolis Club, Pozen tackled a few additional questions.

SW: How has the crisis impacted Medtronic’s board meetings?

RP: We’ve become much more focused on what is happening globally. We’re dealing with a global crisis. Second, we’ve started to have much more intensive strategic reviews. There are so many more things going on—the financial crisis, the health care bill, to name just a couple of topics.

SW: In view of the financial crisis, what has been your advice to the CFO or treasurer of Medtronic?

RP: Liquidity is much more important than you thought. Executives were always sensitive to interest rate risk and credit risk. Historically, they underestimated the importance of liquidity—the ability to get your money back.

SW: One of the key recommendations in your book is the idea of “super directors” who will spend a lot more time on their board duties. Has that idea gotten any traction?

RP: You’re seeing this at GM and Citigroup, companies that are starting to get a different kind of director. For instance, Citi now has three or four directors who are former CEOs of banks. They’re much more experienced, much more committed.

SW: Should this idea be extended beyond the largest 200 financial institutions?

RP: I try not to view things as all or nothing. If you’re part of a very large global company that is complicated and growing, then you should spend more time on it. And make sure you have the relevant expertise.