annual report 2005

Collective Wisdom of Executives Worldwide

annual essay Douglass North on Leadership in an Uncertain World “A bend in the road is not the end of the road, unless you fail to make the turn. For business leaders, the key is to identify the bend in the road very early, to prepare changes in strategy. provides a world-class forum for business leaders to discuss new trends and burning issues. It helps evolve practices and standards that enable the smooth functioning of mar- kets. Most importantly, The Conference Board’s work enables us to share and understand best practices across industries, countries and corporations.”

Nandan Nilekani CEO, President and Managing Director of Infosys Vice Chairman of The Conference Board

2 the conference board 2005 annual report Leaders Working Together to Strengthen Performance and Values

To grow and thrive in an ever-changing business climate, leaders need great ideas they can use today. We believe that ideas that work come from building the right relationships with the right people.

Leaders need a place where they can hone their ideas with trusted peers who offer experienced, practical advice — and expect the same in return. Where a diverse mix of perspectives draws out the most useful problem-solving insights from the most unexpected places. Where they participate in a global conversation with one ground rule: Challenge all assumptions in favor of what actually works.

The Conference Board brings respected economic and management experts together with experienced leaders in business, government and academia to create an unrivaled global community of leaders who bring their collective wisdom to bear on today’s most pressing business, economic and social concerns.

Participation in our forums and access to our research provides leaders with the ideas and tools they need to break from ordinary thinking, cultivate innovation and address critical issues in ways that help strengthen the performance and shape the values of their organizations and the world around them. Paul Volcker, former Chairman of the Board of Governors of the Federal Reserve System and Chairman of the independent United Nations inquiry into the Iraqi Oil for Food Program, keynotes The Conference Board’s Annual Meeting this November. As a co-chair of The Conference Board Global Advisory Council (with Kees Storm, Member of the Supervisory Board, AEGON n.v.), he continues to be a major force in the work of The Conference Board. The council, which advises and supports The Conference Board’s economic research agenda, is composed of global business leaders “StraightTalk ®*is a good who are committed to advancing the way to keep up with what’s understanding of the global business happening to the economy environment. and an intelligent discussion of what’s in store—when you don’t have the whole Federal Reserve staff to do it for you.” Paul Volcker

CHAIRMAN’S LETTER 05 PRESIDENT’S LETTER 06 BUSINESS REVIEW 08 PRODUCTS & SERVICES 21 ANNUAL ESSAY 26 FINANCIALS 30 GLOBAL COUNSELLORS 32 *Monthly economic report on global trends by Gail Fosler, Chief Economist TRUSTEES 34 of The Conference Board Chairman’s Letter

congratulate our loyal members and the Niall FitzGerald kbe talented staff of The Conference Board for Chairman, The Conference Board Chairman, Reuters Group plc Ianother successful year. In the most impor- tant ways, the Board set records — in service to our members; in contribution to the public interest; and in market performance. The Conference Board is well positioned in the increasingly competitive marketplace for best practice research, economic insight, the continu- gratitude to my fellow Trustees for their insight ing education of executives, and shaping the and dedication; to The Conference Board staff values that guide business leaders worldwide. for their hard work and ingenuity; and to our Two particular future challenges are extending thousands of member executives around the international reach and sharpening our branding. world for their long-standing generosity and Let me take this opportunity to thank support. Much has been achieved in recent years, two retiring Trustees, Sharon Patrick and John which should give confidence to set the aspira- Hunkin, for their service and contribution. tions even higher. The Conference Board continues to benefit from the tradition of distinguished and active Trustees, Respectfully submitted, drawn from the ranks of business leaders from Asia, Europe, and North America. This is at the heart of what makes us unique. Finally, I am delighted that my friend and Niall FitzGerald kbe colleague, Sam DiPiazza, has agreed to succeed Chairman, The Conference Board, Inc. Chairman, Reuters Group plc me and chair this extraordinary group of Trustees. As I prepare to step aside, I want to express my

2005 annual report the conference board 5 President’s Letter

e are pleased to report success in advancing Within hours of the South Asia tsunami, our our dual mission of helping businesses Contributions Council and staff colleagues facilitated Wimprove their performance and strengthen a private-sector relief response to this tragic natural their service to society. These efforts rewarded us disaster. More than 100 companies used our special Web with a record fiscal year. site, which recorded more than $250 million in assis- tance to relief agencies. At this writing, in September, Better World this same group is at work helping to facilitate the We take seriously our 90-year-old duty to help business response to Hurricane Katrina’s devastation. contribute to a better world. Here are some highlights of our work to shape values and improve business standards: Better Business The bread and butter of our work is directed toward • We continued our efforts to restore trust in corporate bringing executives knowledge, ideas, and perspective governance. Our Directors’ Institute has now provided to help them improve their skills and strengthen their continuing education to 300 sitting corporate directors performance. We do this by creating and sharing intellec- (representing half of the Fortune 500), including a dozen tual capital over a wide range of critical management on-site sessions with boards of leading companies. endeavors — and through a world-class economics pro- We released a new, updated gram that forecasts and explains trends in nine markets Handbook; held two transatlantic Corporate/Investor that represent two-thirds of the world’s GDP. Summits; and learned that the Harvard Business School Press accepted Carolyn Brancato’s book for publication. Creating Knowledge and Know-How We published nearly 30 major reports this year — • Our corporate ethics conference was again the signal a dozen of which were accompanied by user-friendly event in the field. And our annual CEO Forum featured PowerPoint presentations — and more than 50 online Citigroup CEO Chuck Prince on “Living Your Values in Executive Action reports. Eight of these publications the Global Economy.” focused on subjects of special interest to mid-size companies. • We extended our diversity efforts beyond North America. Our economics programs continued to innovate To help our members in Europe capture the benefits and win accolades. We created the Help-Wanted Online of workplace diversity, we created a new council and Data Series — a monthly census of Internet job listings — undertook an EU review of diversity best practice. to complement our national Help-Wanted Advertising Today, six diversity councils serve more than 250 Index of 51 major newspapers. We revised our Leading corporate diversity executives; we held seven major Economic Indicators to make them even more valuable conferences about the issue; and our research on the in predicting economic turning points. Gail Fosler, our maturing workforce earned praise from the academic Chief Economist, was named by world and high interest from executives facing multi- as one of the two most prescient forecasters of inflation. generational workforces. And the U.S. Business Council invited us to conduct and present their closely watched semiannual CEO • We held our seventh Awards ceremony at surveys of economic sentiment. the White House, this time recognizing J. P. Morgan We made special efforts to help business (and public) Chase, KeySpan and Luxottica for exemplary leaders better understand the many facets of risk — an corporate citizenship. increasingly complex topic in an uncertain world that is further complicated by new markets, new financial prod- ucts and services, and greater levels of leverage. We com- pleted the first comparative survey of risk management practices in Europe and North America; and explored

6 the conference board 2005 annual report best practices through conferences, councils, a working group, and nearly a score of reports and publications. One of our most promising initiatives — a world- class, independent research center on economics and business practice in — was launched, with ten major multinational companies (from Europe, Asia, Richard E. Cavanagh and North America) pledging generous financial support President and CEO and top management attention during the three-year The Conference Board startup. Our China Center will be located in and New York and will collaborate with leading Chinese universities. Two distinguished leaders have agreed to co-chair the group — former U. S. Federal Reserve Chairman Paul Volcker and Chen Yuan, Governor of the China Development Bank (CDB). Customer loyalty was exceptional and gratifying. Some 97 percent of our key accounts chose to renew Educating Executives (including a remarkable 99 percent of our key U.S. This year, some 15,000 senior executives from six customers). U.S. conference attendance grew 20 per- continents participated in more than 200 conferences, cent; and we posted double-digit revenue growth in 120 councils, 17 research working groups, and 50 U.S. councils, subscriptions and conferences in Asia, Webcasts on subjects ranging from corporate security advertising income, and research working groups — to productivity improvement. and triple-digit growth in Webcasts! We hosted a dozen experiential leadership pro- Beyond the facts and numbers, two special events grams at Gettysburg and Normandy — where senior marked our year. Our Annual Dinner in New York executives learned how to apply battlefield leadership set a record for attendance, as then SEC Chairman lessons to business. These relatively new and fast- William Donaldson lauded The Conference Board for growing programs have proven to be especially popu- our role in strengthening corporate governance. lar among our most seasoned and senior business And this spring, we had extraordinary meetings of our leaders, who often bring their top management teams European Global Counsellors and Trustees in Ireland, to participate in customized sessions. where Prime Minister Bertie Ahern shared his wisdom on Ireland’s economic development strategy. A Year of Achievement Finally, let me express my thanks to our outgoing As a result of all of these efforts, revenue grew almost Chairman, Niall FitzGerald, for his years of dedicated 10 percent this year (to a record high); we earned a leadership. His prodigious energy and exceptionally comfortable operating surplus from recurring opera- high standards made The Conference Board a better tions; and we invested $2 million to rebuild our reserves enterprise, and we are grateful for his care and vision. and voluntarily fortify our plans. We are blessed that long-time Conference Board Trustee My talented staff colleagues set 10 all-time records, and Vice Chairman Sam DiPiazza has agreed to suc- including membership subscriptions, council participa- ceed Niall. tion, research working group activity, Webcasts, Web site Respectfully submitted, visits, governance programs, staff productivity, confer- ence contribution, and overall revenue. And our peo- ple and our work were cited 36,000 times worldwide by the press and media. Richard E. Cavanagh President and CEO The Conference Board, Inc.

2005 annual report the conference board 7 Business Review 2004–2005 Building a Community of Leaders Worldwide

his March in , more than 200 invited guests urgent need, and high value, in sharing knowledge Theard worldwide business leaders call for a barrier- across different sectors of society. free transatlantic market to spur economic growth Nurturing the candid exchange of experiences and global stability. Niall FitzGerald, Chairman of and ideas is at the core of The Conference Board mis- The Conference Board and Chairman of the Reuters sion. Through knowledge-sharing forums, pragmatic Group, said that relations between the U.S. and Europe research, face-to-face meetings, Webcasts and small will withstand current social and political tensions. informal events, The Conference Board is building a “There is much more that unites America and Europe community of leaders with ideas that can enhance than divides them,” he declared. Noting that the U.S. business performance and strengthen society. and Europe produce 60 percent of the world’s gross During the last year, The Conference Board brought domestic product and drive the global economy, leaders together around the world: In Amsterdam, FitzGerald said the ties that bind the U.S. and Europe Athens, Bangalore, Beijing, Berlin, , Budapest, are both strong and enduring. Chicago, Copenhagen, Dublin, Florence and Frankfurt. At a West Point forum this spring, co-hosted by In , the Hague, and Johannesburg. U.S. Secretary of the Army Francis J. Harvey and And in , Muscat, New York, Oman, Oslo, Paris, U.S. Army Chief of Staff General Peter Schoomaker, Prague, San Francisco, Seattle, , Stockholm, CEOs, three- and four-star generals and leaders from Vienna, Washington, Warsaw and Zurich.

“I’ve long valued the business intelligence I get from The Conference Board. I trust the information because I can use it in the same way so many of my colleagues do — to help make my company better. When I come here to be with my peers, I hear some of the best ideas and practices and insights in business today.” Robert Benmosche Chairman and CEO, Metropolitan Life

the not-for-profit sector came together to explore proven All provided opportunities for executives to ways to develop leaders, make better decisions and discover new ways of solving problems and develop serve society. The forum was the third such collaboration lasting business relationships. As Richard Cavanagh, of the Leader to Leader Institute, the U.S. Army and The The Conference Board’s President and CEO, likes to Conference Board. say: “If you come away from a meeting with one good Best-selling management and leadership scholar idea, one new relationship or one new understanding, Jim Collins told the invitation-only gathering: “If we only then that meeting was successful.” have great companies, we are only going to have a prosperous nation. We are not going to have a great Linking CEOs Worldwide nation. Wealth and power are only the means, not The Conference Board’s almost 90-year reputation the definition, of a great nation.” as an objective sounding board for business continues During three days of intense discussion, partici- to attract chief executives from around the world. pants shared experiences and insights, and developed In October, The Conference Board’s Annual new friendships. Leaders emphasized that organiza- Meeting drew more than 300 senior executives from tions must regularly transform themselves to keep fit 20 countries. Keynote speaker William Donaldson, and effective, and they agreed that there is both an then Chairman of the U.S. Securities and Exchange

8 the conference board 2005 annual report Left to right Gail Fosler Executive Vice President and Chief Economist, The Conference Board Washington SyCip Founder, The SGV Group Global Counsellor since 1970 Global Advisory Council founding member since 1998 Trustee of The Conference Board, 1995–2004 Councillor-for-Life since 2004 Dona Scott Samuel C. Scott III Chairman, President and CEO, Corn Products International, Inc. Trustee of The Conference Board In Dublin this June, special meetings of The Conference Board Global Advisory Council and the Board of Trustees brought together leaders from business, government, academia and the media to discuss issues affecting the global economy. Speakers included Irish Prime Minister Bertie Ahern; Deputy Prime Minister Mary Harney; Brian J. Goggin, Group Chief Executive of the Bank of Ireland; and Thomas L. Friedman of .

Jim Collins Author and management expert

Investment in America Forum May 2005 West Point, N.Y. This collaboration with the U.S. Army and the Leader to Leader Institute was launched in 2002. Best-selling author Jim Collins discussed some of the major criteria that define a “great” nation. At this annual gathering, CEOs, military leaders and members of the not-for-profit sector explore strategies and tactics for developing leaders with vision. William Donaldson Former Chairman U.S. Securities and Exchange Commission

Annual Meeting October 2004 New York

At last fall’s Annual Meeting, SEC Chairman William Donaldson praised The Conference Board for its work in helping companies strengthen their governance programs, saying that recommendations made by the Commission on Public Trust and Private Enterprise “are powerful examples of actions that can help to restore good business practices and public trust in companies, their leaders and the capital markets.”

The Council February 2005 meeting Allianz/Dresdner Bank, Berlin Council founded in 1996 This interdisciplinary group of European pension managers, HR executives and financial executives gathers to discuss the strategic benefits and financial obligations of pensions. At meeting sites from Florence to Budapest to Edinburgh to St. Petersburg in recent years, members have learned about country develop- ments; heard company case studies by fellow members; and studied issues like deflation, liability-driven investing and EU institutional reform. Commission, called on business leaders to push for Kleiner Perkins Caufield & Byers; and entrepreneur Dr. stronger governance and ethical standards: “The ero- Andrew Viterbi, co-founder of Qualcomm and President sion of trust in business is a serious and worrying of The Viterbi Group. They emphasized that major new- development. We need your help, and we want to part- product breakthroughs are fueled by three ingredients: ner with you and those elements of the business and dogged research, adequate capital and “dumb luck.” financial community who have maintained the standards At another CEO Dialogue in New York this upon which our industrial leadership was founded.” December, two former U.S. government officials met Also in October, more than 40 chief executives, with business leaders to examine the state of the major investors and company directors met in New York economy. Featured were former U.S. Treasury Secretary to examine “Living Your Values in a Global Economy.” Robert Rubin, Director and Chairman of the Executive Featured speaker Charles Prince, CEO of Citigroup, Committee of Citigroup; and former U.S. Commerce launched a discussion led by Walter Kiechel, editor-at- Secretary Peter G. Peterson, Chairman and co-founder large of the Harvard Business Review. A key message: of . Both warned that swelling Companies can bolster their brands and profits by inte- federal deficits, an aging population and continuing grating strong value systems into everyday operations. deficits in both the U.S. Social Security and Medicare This spring, The Conference Board’s popular programs are growing threats to America’s economic Leadership Experience program expanded from Gettys- growth and fiscal stability. They noted that both of

“The erosion of trust in business is serious and worrying. We need your help, and we want to partner with you and those elements of the business and financial community who have maintained the standards upon which our industrial leadership was founded.” William Donaldson

burg, Pennsylvania, to Normandy, . While walking America’s political parties bear responsibility for what these historic battlefields in the footsteps of legendary they view as “an impending crisis.” military leaders, executives learned how major lessons Chief executives also contributed to our seventh of the Civil War and World War II can be effectively applied CEO Challenge Survey. The resulting report, CEO to challenges facing business today. Challenge 2004: Perspectives and Analysis, presents Convinced that wisdom is enhanced when leaders the views of more than 500 global business leaders come together, The Conference Board and The Week in 40 countries. In-depth interviews with 11 of these magazine have launched a series of innovative CEO CEOs provide insight into the most critical issues fac- Dialogues. These newsmaking events feature notable ing leaders and the firms they lead. business leaders exploring and debating economic The most controversial, high-profile issue on issues that matter. their agenda last summer? Outsourcing and off- At last November’s CEO Dialogue in San Francisco, shoring. Summing up the view of many top leaders, high-profile leaders from high-technology firms examined Robert Benmosche, a Trustee of The Conference “The Genius of Innovation.” Panelists included inventor Board and Chairman and CEO of Metropolitan Life, Jeff Hawkins, the Chief Technology Officer of palmOne, said: “Survival of the fittest is the way you survive Inc.; investor William Randolph Hearst III, a partner in in business. And outsourcing/offshoring is just another

2005 annual report the conference board 11 form of making sure that you’re economically sound to managing global supply chains, and from brand man- in whatever you’re doing.” agement to business ethics. CEOs say that sustained and steady top-line Conferences are designed to keep executives out growth is their number one challenge. Echoing in front of issues and trends that pose both opportunities Benmosche, another Trustee of The Conference Board, and risks. A strong case in point was The Conference Douglas Conant, President and CEO of Campbell Soup, Board’s meeting last fall on security threats to corpora- notes: “Life is very Darwinian. You either grow or die.” tions in the wake of the war in Iraq and the spread of terrorism. Global experts on war, terrorism and corporate Building Business Relationships, Face to Face security identified impending threats to corporations Senior executives continue to place high value on and described strategies to detect and deter potential meeting regularly with their peers from other compa- crises. Addressing this event were leaders from the nies, industries and countries. During the last year, U.S. Department of Homeland Security, major corpora- about 15,000 executives participated in our expanding tions and prominent security experts. range of business forums, including more than 200 conferences, seminars and forums and 120 councils. Making Governance Practical for Leaders At conferences and councils worldwide, the It’s now clear that companies failing to comply with emphasis is not only on strategies that are effective changing governance requirements do so at their peril.

“The Conference Board provides me with firsthand knowledge of strategies that worked and those that didn’t, and the ability to learn directly from those who developed and implemented them. Consultants may provide me with knowledge. The Conference Board provides me with wisdom.” Erik Sossa Director of Employee Benefits, Pepsi Bottling Group

but also on those that fail. Erik Sossa, Director of Faced with a blizzard of new federal, state and local Employee Benefits at the Pepsi Bottling Group and regulations in the U.S; disparate laws and practices a member of The Conference Board’s Employee around the globe; and pressure from both manage- Benefits Council, speaks for many council members ment and investors, leading organizations turn to The when he says: “The most important items I need to Conference Board Global Corporate Governance do my job are ideas that work. The Conference Board Research Center as their resource of choice. Forty provides me with firsthand knowledge of strategies companies and major institutional investors are now that worked and those that didn’t, and the ability to members of the Governance Center. learn directly from those who developed and imple- During the last year, The Conference Board com- mented them. Consultants may provide me with pleted a comprehensive update of its Corporate knowledge. The Conference Board provides me with Governance Handbook. Co-authored by Dr. Carolyn wisdom.” Brancato, Director of the Center, the handbook — As with our councils, our conferences and briefings which includes the timely views of 100 prominent last year addressed virtually every important issue directors and other senior-level executives — pinpoints facing business today. Themes ranged from leadership a pragmatic series of best practices, new legal stan- development to diversity, from building loyal customers dards and compliance requirements.

12 the conference board 2005 annual report Rohana Weiler VP, Human Resources, Asia-Pacific Agilent Technologies Malaysia Asia-Pacific HR Council member since 2003 Seen here at the Asia-Pacific HR Conference, held in Shanghai in November, Weiler has participated in conference and council meetings from Bangkok to Penang to Hong Kong. She is becoming a regular speaker at our leadership and HR meetings in the region and is one of a growing number of Asia-Pacific leaders who are finding their way to The Conference Board.

Left to right Carlos E. Represas Charles Prince CEO, Citigroup Chairman, Nestlé Alan MacDonald Vice Chairman, Global Advisory Council member, Citibank; and COO, Global 2000-2005 Banking, Citigroup In New York last October, Citigroup CEO Charles Prince was the keynote speaker for The Conference Board CEO Forum on “Living Your Values in the Global Economy.” Our CEO Forums highlight our long-standing role of helping companies design strong value systems by helping their leaders to build strong relationships over time. Council of Chief Legal Officers September 2004 meeting Chicago Council founded in 1992

Left to right Dennis L. Schoff Senior VP and , Lincoln National Jose M. de Lasa Senior VP and General Counsel, Abbott Laboratories Rick Palmore Executive VP, Sara Lee Scott Turow Author and lawyer The Conference Board’s Council of Chief Legal Officers brings together corporate General Counsels from leading companies based in North America. In addition to participating in the Council’s internal panels, members hear from a distinguished roster of speakers from the public and private sectors. Past speakers have included the U.S. Attorney General, several U.S. Supreme Court Justices and Counsels to U.S. Presidents.

Left to right Alain J.P. Belda Chairman and CEO, Alcoa Haydee Belda Ronald A. Williams President, Aetna The Conference Board’s Annual Meeting attracted business leaders from nearly 20 countries around the world. Trustees Alain Belda and Ronald Williams lead companies that have been contributing to the collective wisdom of The Conference Board for decades. The Directors’ Institute — a key part of the of online U.S. job offerings. The Conference Board Governance Center — has now trained 300 corporate Help-Wanted OnLine Data Series™ covers more directors who sit on the boards of more than half than 1,200 major Internet job boards and some of the world’s 500 largest companies. Comprising a important smaller boards as well. It complements world-class faculty of jurists, scholars and seasoned The Conference Board Help-Wanted Advertising board leaders, the Institute is a premier provider of Index, which reports classified job advertising governance education for directors. appearing in 51 major newspapers across the U.S. Herb Allison, Chairman, President and CEO of The Conference Board expanded its reputation TIAA-CREF, commends The Conference Board’s pivotal • as a leading authority on worldwide productivity role in governance research and education: “Sound cor- porate governance is absolutely essential to maintaining trends. Its ongoing productivity studies now investor trust — and, by extension, to ensuring our include 97 countries. Performance 2005, this nation’s continuing economic strength and competitive- year’s widely covered study, revealed that stellar ness. That’s why the work of the Governance Center is economic performance by China and helped so important. The Center pushes forward governance double the world’s productivity gains over the last practices…and its Directors’ Institute has become a key decade and that productivity in Ireland outpaces training ground for corporate directors in a wide range every other country. Since productivity growth is

“One key to improving corporate governance practices is for companies and institutional investors to meet in the same room and tell each other what they’re thinking. That can be much easier said than done. The Conference Board, through its Governance Center, provides us with a place to come together and find common ground that's good for investors and good for business.” Patricia Dunn Vice Chairman, Barclays Global Investors; Chairman, HP

of industries, enabling them to sharpen their oversight crucial to faster economic growth, these studies skills and stay abreast of best practices.” are increasingly followed by both business strate- gists and government policymakers. Expanded Economic Intelligence The Conference Board expanded and enriched its The Conference Board’s long-standing reputation already broad array of economic indicators, forecasts for accuracy was again fortified when the Wall Street and analytical reports. Journal named Conference Board Executive Vice Three major developments: President and Chief Economist Gail Fosler one of the The Conference Board strengthened some of the nation’s two most accurate forecasters of inflation. • Previously, the Journal has twice named Fosler the major components of its U.S. Leading Economic most accurate forecaster for the U.S. economy overall. Index. Economists and the media have hailed these efforts to make the Index even more reliable Rising Impact in Europe and Asia-Pacific in signaling major turning points in the economy. Our meetings in Europe this year featured a score of • To help business analysts and management distinguished business leaders. Among them: François better understand the online demand for labor, Cornélis, Vice Chairman of the Executive Committee The Conference Board created its first measure and Executive Vice President of Total SA, and a Global

2005 annual report the conference board 15 Counsellor of The Conference Board; and Guy Quaden, The Conference Board Europe is undertaking Governor of the National Bank of . Also major new research projects that will have an impact Bertrand Collomb, Chairman of the of on both business and government decision making. Lafarge, and a Global Counsellor of The Conference We are working with the European Commission’s Board; and Baudouin Prot, CEO of BNP Paribas. All Directorate-General for Employment, Social Affairs told, more and Equal Opportunities to prepare a major report than 1,000 senior executives participated in a variety and pan-European conference on the business case of meetings in Europe. for diversity. Some 32 European companies have been At a special dinner of The Conference Board’s identified as strong case studies for this project. Trustees and Global Counsellors — hosted in Enniskerry, Growing numbers of senior executives are also Ireland, by The Bank of Ireland — guests included more participating in The Conference Board’s knowledge- than 100 business leaders. Mary Harney, Ireland’s Deputy building programs throughout the Asia-Pacific region. Prime Minister, spoke, as did Conference Board Chairman More than 400 executives in Asia-Pacific are now mem- Niall FitzGerald. bers of Conference Board councils and working groups, Also in Enniskerry, a meeting of The Conference and speak and attend briefings and conferences. They Board’s Global Advisory Council attracted an equally actively participate in research projects of The impressive group of chief executives representing global Conference Board. And high-level business events in

“There is much more that unites America and Europe than divides them.” Niall FitzGerald kbe Chairman, The Conference Board Chairman, Reuters Group plc

enterprises. The meeting — co-chaired by Kees Storm, Hong Kong, Singapore, Shanghai, Manila and Mumbai Member of the Supervisory Board of AEGON N.V., and have attracted senior executives from China, India and former Federal Reserve Chairman Paul Volcker — includ- other parts of Asia-Pacific — as well as from Australia, ed Irish Prime Minister Bertie Ahern, Viscount Etienne Germany, Mexico, and the . Davignon, Thomas L. Friedman of the New York Times, The Conference Board’s close relationships with Nobel Prize-winning economist Douglass C. North leading Chinese companies, government agencies and and Mario Monti, the European Commission’s former economic authorities led to a signature accomplish- Commissioner for Competition. ment this year: the creation of The Conference Board Another major business forum, in Brussels, focused China Center for Business and Economics. Located in on new ways companies are building sustainable enter- New York and Beijing, the Center’s strategic aim is to prises. The keynoter was Liam O’Mahony, Group Chief build bridges between business executives and gov- Executive of CRH. Irish Prime Minister Bertie Ahern told ernment policymakers, and spur collaboration between the group that Ireland’s dynamic economic growth owes the public and private sectors. The Center — co-chaired much to the close collaboration between government, by former Federal Reserve Chair Paul Volcker and Chen business and trade unions, which he said is “the unique Yuan, Governor of the China Development Bank — ingredient in the Irish mix.” is already becoming a unique repository of knowledge

16 the conference board 2005 annual report Bertrand Collomb Chairman, Lafarge Global Counsellor since 2004 Invitational forum at the Paris Chamber of Commerce and Industry March 2005 At a briefing in Paris this spring, more than 200 business leaders gathered to discuss the economic relationship between the U.S. and Europe in the face of recent political tensions between the two. Collomb expressed his hope that Europe would play a calm, stable and constructive role in its discussions with the U.S. and work purposefully towards successful globalization and world development.

India CEO Forum April 2005 Mumbai As The Conference Board continues to expand its role in India, growing numbers of leading companies and multinationals across a range of industries are participating in our activities. Last April in Mumbai, a special event sponsored by Reliance Industries, Tata Consultancy Services and Jindal Group attracted more than 60 top executives. CEOs from India shared their experiences as emerging global leaders in the business marketplace, focusing on business ethics and governance, managing cross-cultural diversity and corporate leadership. Left to right Jeffrey A. Garten Juan Trippe Professor of International Trade, Finance and Business, Yale School of Management Harry M. Jansen Kraemer Executive Partner, Madison Dearborn Julie Kraemer

Experienced business leaders and academic experts gather at forums of The Conference Board to discuss issues of common concern. Among those assembled in Ireland early this summer for The Conference Board Members’ Dinner were Trustees of Yale and Harry Kraemer of Madison Dearborn, who are joined here by Julie Kraemer.

Ron Brown Award ceremony November 2004 Fully funded by the private sector, The White House, Washington, D.C. the Ron Brown Award for Corporate Leadership is the only Presidential Left to right Award recognizing companies for Michael Brown and Alma Brown outstanding achievements in employee Donald L. Evans U.S. Secretary of Commerce and community relations. At this year’s David J. Manning Senior VP, Corporate Affairs, Keyspan White House ceremony, U.S. Commerce Bill Harrison Chairman and CEO, J.P. Morgan Chase Secretary Donald Evans presented the Pamela Adamo VP, Public Affairs, KeySpan Award to J.P. Morgan Chase, KeySpan Kerry Bradley COO, Luxottica Retail Corporation and Luxottica Retail about the Chinese economy. And it is a focal point for gain a better understanding of different regional government and business leaders to examine China’s approaches to these issues, and are now working to future and its growing impact on the global economy. leverage collective insights from the meeting to Founding corporate members of the Center include improve diversity and work-life practices globally. Agilent Technologies Foundation, Bekaert, DBS Bank, The Conference Board has also become a valued Campbell Soup, Caterpillar, China Development Bank, source of intelligence on strategies for managing a Deloitte & Touche, , Reuters and maturing workforce. We held briefings in six major U.S. PricewaterhouseCoopers. cities to examine changing demographics and the impact they are having on company human resources Outsourcing, Diversity and an strategies. These were led by Conference Board econo- Aging Workforce: Critical Issues mist and research director Linda Barrington and Jeri In addition to launching an ongoing series of outsourc- Sedlar, The Conference Board’s senior advisor on the ing and offshoring studies this year, The Conference maturing workforce. Board held an increasing number of meetings to keep “Energy and healthcare are among the industries executives informed on these crucial issues. In an now feeling the crunch as their workforces grow older effort spearheaded by The Conference Board’s offshoring and begin to retire,” notes Barrington. “Our briefings specialist, Ton Heijmen, executives are being cautioned focus on what all companies can learn from the pioneer-

“We should spend less time trying to protect the jobs where we’re not competitive and more time investing in our educational systems to make sure that we can, in fact, adapt to a changing global environment.” Erroll B. Davis Chairman, Alliant Energy

to weigh all the costs and benefits of offshoring — ing work being done in these industries to deal with economic and social. Our studies reveal step-by-step succession planning, retaining essential workers and measures to determine if, and when, offshoring makes transferring knowledge from older to younger workers.” economic and social sense. They warn that some off- shoring ventures continue to be plagued with high Research Working Groups: failure rates and merit increased scrutiny. Action Networks for Executives Long a leader in championing diversity as a prof- Designed by The Conference Board to help executives itable business strategy, The Conference Board counts probe more deeply into the latest management concepts more than 550 HR executives (including 250 diversity and economic shifts, our research working groups cre- executives) among its council members. We created ate opportunities for members to participate directly in one new diversity council this past year, and worldwide the work of The Conference Board. To ensure that every diversity leaders participated in seven conferences executive’s voice is heard, these high-level, tightly-knit focusing on leadership issues. forums are limited to groups of 15–20 executives, who In May, our U.S. council division hosted a joint meet in person and online. meeting of the seven work-life and diversity councils Working group meetings during the last year from Europe, the United States and Canada. Nearly addressed employee engagement and commitment; 100 council members and speakers came together to how to align performance measures with business

2005 annual report the conference board 19 objectives and strategic workforce planning. Also of services being channeled through our Web pages. underway are working groups on human capital strategy That was more than double the amount recorded last and measurement; the financial and operational aspects year. And the number of visitors to Conference Board of offshoring; executive compensation consulting; man- pages jumped 25 percent to almost two million. aging mature workers; consumer-driven healthcare; Our Web team (assisted by our Publishing group, and change management. Helping The Conference Board Council Program and Global Corporate Citizenship identify major research themes were working groups Research Group) was a major resource in helping mem- on corporate ctizenship in China; Asia-Pacific leadership ber companies respond to the devastating impact of development; and environmental, social and governance the tsunami in Asia. The Conference Board established risk factors. widely used bulletin boards and a special post-tsunami Web page that helped our members respond, and con- Webcasts Put More Knowledge at More Desks tribute, to victims of this disaster. The Conference Board’s Webcast offerings are expanding The Conference Board Web site has become an dramatically, to satisfy growing executive demand for around-the-clock knowledge network, linking executives business knowledge delivered right now, in real time. both to new ideas and to each other. As executives These online meetings were an instant hit among exec- seek to negotiate twists and turns in the global econo- utives all over the world. All told, 41 Webcasts delivered my, many of them look to The Conference Board to

“If you come away from a meeting with one good idea, one new relationship or one new understanding, then that meeting was successful.” Richard E. Cavanagh President and CEO, The Conference Board

the latest economic and management intelligence to provide economic and management road maps that hundreds of senior executives. they can’t find anywhere else. Our Web site is but one Featuring experts from The Conference Board of the many ways The Conference Board is building and other major organizations, Webcasts brought exec- a community to help executives learn, lead and excel utives up to date on doing business in China, consumer around the world. attitudes and spending plans, outsourcing, diversity Says Nandan Nilekani, CEO of fast-growing Infosys practices, privacy, corporate citizenship and global and a Trustee of The Conference Board: “A bend in the grantmaking. Other sessions covered corporate securi- road is not the end of the road, unless you fail to make ty, executive compensation and business ethics. the turn. For business leaders, the key is to identify the Due to rising demand, we will launch a new series bend in the road very early, to prepare changes in of Webcasts in the coming months. The only equipment strategy. The Conference Board provides a world-class needed: a telephone and a computer. forum for business leaders to discuss new trends and burning issues. It helps evolve practices and standards A Breakthrough Year for that enable the smooth functioning of markets. Most The Conference Board Online importantly, The Conference Board’s work enables us Improved navigation and easy access triggered record to share and understand best practices across indus- Web revenues this year, with more than $8 million worth tries, countries and corporations.”

20 the conference board 2005 annual report Products & Services Knowledge When You Need It.

Councils Corporate Governance Handbook Nonprofit Organization Ethics CORPORATE 2005: Developments in Best Guidelines: Setting and Verifying Business/Education Council Practices, Compliance, and Legal Standards for Good Practice Anne L. Bryant National School Standards CITIZENSHIP Boards Association Outsourcing and Internal Controls: Web edition A Sarbanes-Oxley Update research Charlotte K. Frank The McGraw-Hill Companies Executive Action series Successful Building of Ethics and Compliance Programs Research Reports Chief EH&S Officers’ Council I Conducting Independent Arthur J. Gibson Home Depot Inc. Corporate Citizenship Reporting: Investigations Tone at the Top: Why Directors Best Practices Chief EH&S Officers’ Council II Should Be Concerned with Ethics Evolving Role of the Board in and Culture 2004 Corporate Contributions Yvon Beauregard Bombardier Inc. CEO and Senior “Back Bench” Also available in PowerPresentation format Community and Succession Councils Public Issues Council How Prepared Are Companies Executive Action series Jerry W. Glazier Sprint for the Revised Sentencing Asia Council on Business Conduct Can U.S. Corporations Change Guidelines? Contributions Council Council on Corporate Compliance the Way People Think About Kathleen W. Buechel Alcoa Inc. Minimizing Risk and Maintaining Marjorie W. Doyle E.I. du Pont de Nemours America? Christine Park Lucent Technologies Ethics in Asia–Pacific and Company, Inc Committed Management Builds Foundation Reaching the Goal Line on Council on Corporate Governance Sustainable Enterprises in Contributions Council II Good Governance Europe Lucia E. Kos Edison International European Council on Strategy Struggles in the Corporate Governance and Corporate Contributions: Boardroom A Look at the Numbers Environment, Health & Board Effectiveness Safety Legal Council Succession Planning — Folkert Schukken Navigating the Tsunami Peter Etienne Baxter International Inc. Without Tears Relief Effort European Council on European Council on Environment Using Ethical Analysis to Investor Relations and Product Stewardship Guide Offshoring Dries Ausems DSM N.V. meetings Urban Jacobsson ExxonMobil Why Ethical Leaders Are Marco E. Peyron Banca Nazionale Del Chemical Europe Inc. Lavoro SPA Conferences Different European Council on Eliane Rouyer Accor Business and Sustainability Health and Safety Wolfram Schmitt Deutsche Bank AG New York John Lyons O2 plc meetings Corporate Community Global Council on European Working Group and Conferences Business Conduct Involvement New York Council on Corporate Citizenship James D. Berg International Paper Company Antitrust New York Global Corporate Citizenship Health and Safety Council New York Business Ethics New York directors’ institute ECONOMICS Other face-to-face forums CORPORATE Directors’ Institute Roundtable Building Sustainable Enterprises Forum New York (2) research Forum Brussels GOVERNANCE/ Research Reports Global Corporate Citizenship ETHICS/ Other face-to-face forums Seminar New York Performance 2005: Audit Committee Executives Productivity, Employment, and Global Values Breakfast COMPLIANCE Workshop New York (3) Income in the Worlds’ Economies Roundtable New York Business Ethics Seminar Also available in PowerPresentation format research New York (4) The Retail Revolution: Webcasts Research Reports Corporate Governance Can Europe Match U.S. Company Programs to Executives Workshop New York (3) Productivity Performance? Ease Offshoring Impact corporate/investor summit series Corporate Governance (Perspectives on a Global Economy series) Also available in PowerPresentation format Contributions Report Briefing Future of the Annual Self-Assessment Workshop Chicago, New York, San Francisco Using Technology to Enhance General Meeting Corporate/Investor Summit Executive Action series Your Grantmaking Due Diligence Improving Communications Asia’s New Era of Opportunity Between Companies and Wilmington, DE measure of success series Investors EU Labor Productivity and Webcasts Employment Improve in 2004— Best Practices in Corporate but U.S. Still Leads Citizenship Reporting Directors’ Compensation Compliance and Ethics Programs: and Board Practices in 2004 Directors’ Cut Measurement as a Management Also available in Executive Summary and Tool for Corporate Citizenship PowerPresentation formats Executive Briefing on Compliance and Ethics Programs Measurement Schemes for Corporate Citizenship Performance

2005 annual report the conference board 21 products & services

Restructuring for a Stronger Councils Salary Increase Budgets Strategic e-HR San Diego European Union 2005–2006 European Council of Economists Strategy Development and The Revolution in Retail Trade Daniel M. Hofmann Zürich Insurance The Unique Challenges of Execution for Building World- Sound Fundamentals, Troubling Company Developing World-Class Business Class Leaders in Asia Bangalore, Leaders in Asia-Pacific Singapore Trends: U.S. Consumers Can’t Francesco Meucci UniCredit Banca d’Impresa Carry the Global Economy Why Organization Design Succession Management New York Indefinitely Is Critical to Leadership Global Advisory Council Talent Management New York Co-chaired by Kees Storm, member of the Development Women in Leadership Prague Periodicals Supervisory Board of AEGON N.V., and Paul Women in Leadership: Putting Volcker, former Chairman of the Federal Women’s Leadership New York, Indicators monthly Reserve Diversity Policies into Practice San Diego CEO Confidence Survey quarterly Work-Life and Diversity: Local Needs and Business Work-Life and Diversity Copenhagen Consumer Confidence Survey Relevance Drive Sucess monthly HR / TALENT Work-Life New York Consumer Internet Barometer MANAGEMENT PowerPresentation Other face-to-face forums quarterly Discontent in the Workplace: Communicating Employee Consumer Spending Trends research Take This Job and... Benefits Seminar New York (2) bimonthly Research Reports Diversity Seminar Chicago (2) StraightTalk 10 issues per year Working Groups The Business Value of Consumer-Driven Healthcare Employee Benefits Seminar Chicago Leadership Development Working Papers Executive Compensation Employee Retention and Loyalty Executive Compensation International Comparisons of Consulting Seminar Chicago (2), New York (2) Consulting: Working Group R&D Expenditure: Does an R&D Executive Coaching Seminar Recommendations Global Leadership Development PPP Make a Difference? New York (3) HR Outsourcing in Government Managing Mature Workers The Structure of Business R&D: Executive Compensation Seminar Organizations Recent Trends and Measurement Maximizing Rotational Chicago, New York (2), San Francisco Implications Keeping the Talent Pipeline Assignments Healthcare Seminar New York (2), Filled in the Energy and Utility What Role for the Private Sector Strategic Workforce Planning San Diego (2) in Public Statistics? Industries Investment in America Forum Managing the Mature Workforce: meetings Implications and Best Practices West Point, NY meetings Leadership Experience Measuring More Than Conferences at Gettysburg (9) Efficiency: The New Role of Face-to-face forums Compensation New York, San Diego Board Briefing with Gail Fosler Human Capital Metrics Leadership Experience Also available in Executive Summary Diversity Chicago, New York at Normandy Do Exchange Rates Matter? and PowerPresentation formats Hong Kong, Singapore Employee Benefits New York Mature Workforce Seminar Talent Management Employee Healthcare New York, New York Heading into Troubled Waters Value Imperatives: Hong Kong, Singapore Strategies for Execution San Diego Performance Management Seminar Chicago, New York Business Briefing at the CCIP Paris Also available in Executive Summary format Executive Coaching New York, The 2004 Top Executive San Diego Seminar on Redefining the Employee Value Proposition Business Briefings Compensation Report Executive Compensation New York Hong Kong, Shanghai, Singapore Strategic Choices for Global Also available in Executive Summary format Extending Your Brand to Senior Human Resources Business Belgium Employees Chicago Executive Action series Executive Weekend Boca Raton Impact of Technology on Global Leadership Development Succession Management Productivity: Briefing with Robert Building Executive Coaching Mumbai Capability That Delivers Business Seminar New York, San Diego McGuckin Mumbai HR Outsourcing Chicago Results Talent Strategy Briefing Beijing, Human Resources New York, Shanghai Webcasts Coaching Creates Relationships Hong Kong, Shanghai, Singapore Essential to Business Success Economic Briefing Series Leadership Development New York, San Diego, Singapore Webcasts with Gail Fosler (6) Consumer-Driven Healthcare: Cost Shift or Paradigm Shift? Next Generation New York Corporate Culture and the Law: What Firms Need to Know Discontent in the Workplace: Pensions and Retirement New York Take This Job and... Performance Enhancement and Discontent in the Workplace and What Can Be Done About It Forget the Free Sodas — Management Chicago, New York They Don’t Motivate Anymore Driving Strategic Success Go Ahead: Sweat the Small Stuff through Human Capital Planning Making Over Leaders and Employee Relationships, Leadership Styles New Laws and Code Training Redefining the Employee Value Enterprise Risk Management: Proposition: New Developments in Managing the Cultural Change Asia-Pacific

22 the conference board 2005 annual report products & services products & services

HR’s Contribution to Innovation: Jeffrey R. Sampson The Goodyear Tire & European Council on Learning, A Roadmap for Strategic Energy Fostering New Products and Rubber Company Leadership & Organisational Planning and Management Services with HR Systems Development (Business and Energy in the 21st Century series) Council of Human Also available in PowerPresentation format Linking Business Strategy Resources Executives European Council on with People and Metrics: Lawrence J. Krema Equity Office Work-Life and Diversity A Framework for Successful Properties Trust Executive Action series Implementation Richard A. Lamond Spherion Corporation Executive Compensation Climate Change: Clear Trajectory, Management Council Sally A. Savoia Praxair, Inc. Haze in the Details Managing Diversity Dennis A. Kudla Abbott Laboratories Measuring More Than Efficiency: Council on International Cops, Geeks, and Bean Counters: Global Human Resources The New Role in Human Capital Compensation and Benefits The Clashing Cultures of Corporate Management Council Metrics Rhonda Gold Bristol-Myers Squibb Co. Security Gaston Ouellet Alcan Inc. Council on Learning, Energy Management Goes Human Resources Council – Councils Development & Organizational Strategic Asia-Pacific Performance Advisory Council on Human Andrew Ditty BP Hong Kong Ltd. The Future of Knowledge Edward Betof Becton, Dickinson and Resources Management Management Company Werner Krieger Henkel Asia-Pacific Ltd. Patricia A. Barnard Georgia-Pacific Charles A. Lim Procter & Gamble (Asia) Pte. Ltd. Improving Project Results: Corporation Council for Mid-Market Operating “Below the Line” Roy Massey CLP Holdings Ltd. Miles B. King Motor Sales, U.S.A., Inc. Human Resources Executives – to Produce Real Value Eastern Division Rohana Weiler Agilent Technologies Malaysia Colon S. McLean Duke Energy Corporation Insourcing, Outsourcing, James L. Francis Swagelok Company Human Resources Council – China and Offshoring Council on Compensation Carla S. Nussbaum Paragon Medical, Inc. William J. Cahill FedEx Corporation Lia Belilos Shell China Limited Mark P. Salsbury Markem Corporation security in mid-market David A. Loucks Procter & Gamble Claire Forster Manulife Financial Gayle Schaumann Union Tank Car Company companies series Company Human Resources Council – India Mark L. Nagorka 3M Company Council for Mid-Market Tackling the Challenge William T. Tompkins Gap, Inc. Human Resources Executives – Human Resources Council – The View from the Top Mexico Darla Whitaker Texas Instruments Inc. Western Division Robert Jones First Interstate BancSystem Joaquín J. Salazar García Working Group Council on Compensation II PricewaterhouseCoopers (México), S.C. Miles W. Meyer Kellogg Company Council of Talent Change Management Management Executives Leadership Development Council Council on Development, Catherine Cardona The World Bank Pensions Council meetings Education & Training Neil McPherson Standard Life Investments Ltd. Tamar Elkeles QUALCOMM, Inc. Council on Workforce Diversity Deborah Dagit Merck & Co., Inc. William van Ettinger Masterfoods Michael A. Hopp Lockheed Martin Conferences May E. Snowden Starbucks Corporation Corporation Polish Council of Human E-Procurement Chicago Robert C. Reindl Edwards Lifesciences Resources Executives Diversity Business Council Logistics Fort Lauderdale Corporation Canzata Castleberry-Singleton Malgorzata Tomasik Ernst & Young Purchasing New York Kevin D. Wilde General Mills, Inc. Sun Microsystems, Inc. Research Council on Texanna M. Reeves Georgia-Pacific Radio Frequency Identification Council of Diversity Executives Employee Benefits Corporation Scott Swasey Chevron Corporation Boston Council for Division Leaders – Diversity and Inclusion Council Shared Services Bangalore, Barcelona, Human Resources Work/Life Leadership Council Hayward L. Bell Raytheon Company Maria S. Ferris IBM Corporation Chicago Francis J. Hyatt Wausau Insurance Company Karen Fowler-Williams Lincoln Financial Sharon A. Wilkie GlaxoSmithKline Supplier Relationship Michael L. Meyer Abbott Laboratories Group Management Atlanta Peter Wentworth Pfizer Consumer Healthcare Diversity and Inclusion Supply Chain Chicago Strategy Council MANAGEMENT / Council for Division Leaders – Jeanne Myers Alliant Energy Corporation Other face-to-face forums Human Resources II Eduardo Salaz Intuit, Inc. OPERATIONS RoJean DeChantal Dunkin Brands Inc. Board Briefing on Shared Employee Benefits Council Michael Procida Ford Motor Company research Services Hong Kong, Manila John F. Fitzgerald Sequa Corporation Patricia Rowell American Express Company Polish Business Forum Warsaw European Council on Research Reports Teresa Smiley CNA Insurance Polish Councils Breakfast Warsaw Compensation and Benefits Corporate Security Measures Council on Employee Healthcare Polish Councils Meeting Warsaw Donald Watson Hydro Aluminum ASA and Practices: An Overview of Council on Executive Coaching Clive Wright Mercer Human Resource Corporate Security Management Shared Services Seminar Chicago Consulting William H. Hodgetts Fidelity Investments Since 9/11 Council on Executive European Council on Effecting Change in Business Webcasts Compensation Human Resources Enterprises: Current Trends in Adopting a Global Privacy Policy Andy Jones Prudential plc Michael L. Davis General Mills, Inc. Change Management for the Transfer of Personal Data (2) Joachim Kayser Deutsche Post World Net Also available in Executive Summary format David O. Eng American Express Company Compliance Systems: Cynthia Heath Emerson Electric Co. Implementation/Costs/Benefits (2) James R. Otieno Hewlett-Packard Company

2005 annual report the conference board 23 products & services

Legal Issues in Corporate European Council on Purchasing Corporate Image New York Council of Marketing Executives Security Michael Hellemann Novo Nordisk Bruce E. Dell Lockwood Greene Engineers, Inc. Servicepartner A/S Customer Experience An Outsourcing Primer: Defining Management New York Council of Marketing Executives II Patrick Le Laouenan Sanofi-Aventis the Market and Understanding the Mark Samuels SEI Investments Company Customer Loyalty New York Evaluation Process European Council Digital Marketing New York Council on Marketing Research Restructuring and Renegotiations on Shared Services Chris Curtright United Parcel Service in Outsourcing Michel de Zeeuw Philips International Enterprise Risk and Jos Verelst SKF European Corporate Reputation Beijing European Council on Corporate Structuring and Negotiating the Communications Optimal Outsourcing Contract Executive Council Global Marketing and Katharina Auer AstraZeneca plc Satyam C. Cherukuri Sarnoff Corporation Communications Hong Kong Stefan Lorentzson Volvo Councils Marketing New York Global Business Polish Council of Asia-Pacific Shared Services Excellence Council Marketing Research Chicago Marketing Executives Paivi Suutari Stora Enso OYJ Council Sales Management Solutions Michelle Cheung Henkel Asia Pacific Ltd. Western Marketing Performance Excellence Council New York Edward Kwong CLP Power Hong Kong J. Michael Bealle Union Pacific Railroad Research Council Limited Company Steve Meinzen John Deere Other face-to-face forums William Pfluger Caltex (Asia) Ltd Ellen J. Gaucher Wellmark Blue Cross Blue Vivian Millroy Callaway Pillsbury USA Shield of Iowa Branding for Customer Division of General Mills Business Performance Loyalty Seminar New York Polish Council of Improvement Council Corporate Brand Management Philip C. Forve Cargill Chief Executive Officers Seminar Chicago (2) STRATEGY / Sally J. Penley Weyerhaeuser Strategic Purchasing and Supply Resources Corporate Communication FINANCE Leadership Council Seminar New York (2) Council of Chief Legal Officers Anthony S. Nieves Hilton Hotels Howard Malovany Wm. Wrigley Jr. Company Corporation Corporate Image and Branding research Seminar Chicago (2), New York (2) Purchasing and Supply Council on Corporate Research Reports Travel Management Leadership Council II Crisis Communication and c.p.m ceo challenge series Ernest Guerra, Jr. American Standard John R. Gossmann, Medtronic, Inc. Management Seminar New York Companies U.S. Quality Council Digital Marketing Seminar New York CEO Challenge 2004: Perspectives and Analysis Stacey Taylor Tyco International Leroy Boatwright Corning Incorporated Employee Communications Also available in PowerPresentation format Council of Senior Steven H. Hoisington Johnson Controls, Inc. Seminar Chicago (2), New York (2) CEO Challenge 2004: International Attorneys Senior Marketing Executive William D. Manson Lubrizol Corporation Top 10 Challenges Executive Summary Roundtable Chicago (2), New York (2) MARKETING / Mid-Market CEO Challenge Council of Shared Business Also available in Executive Summary and Services Executives Webcasts COMMUNICATIONS PowerPresentation formats Thomas McGlinn Unisys Corporation Eight Things Every Marketer Council of Shared Business research Needs to Know About the Luxury Enterprise Risk Services Executives II Market (2) Management Systems: Earl K. Moore BHP Billiton Consumer Research Center reports Understanding the American Beyond the Balanced Scorecard Also available in PowerPresentation format Council for Six Sigma Executives Demographic Information Consumer Linda Gardner-Goos Wellmark Blue Service: Household Income From Risk Management Cross Blue Shield Councils to Risk Strategy Steven K. Randol U.S. Department Discretionary Spending Also available in PowerPresentation format of the Army The Hispanic Market in 2010 Asia-Pacific Corporate Communication Council From Risk Management to Council for Six Sigma Executives II Report and database Risk Strategy: Mid-Markets Asia-Pacific Marketing Also available in PowerPresentation format Council on Supplier Diversity Executive Action series Strategy Council Denise Coley Cisco Systems Inc. Consumers Going Online thinking offshoring through series Icy L. Williams Procter & Gamble Company Corporate Communications Before Going on the Road Development Group Beyond Costs: Financial and European Council on Discretionary Income Trends: Operational Risks First in a 4-part series Global Supply Chain An Overview Council on Corporate Peter D. Laurence Laboratories Serono S.A. Brand Management Executive Action series The Hispanic Market in 2010 Edward A. Faruolo CIGNA Corporation Arne Schmidt Novozymes A/S Beyond Compliance: European Council Council on Corporate The Future of Risk Management meetings Communications Strategy on Legal Affairs Business Is Evolving — Alfred Gerber Sulzer Ltd Mark O. Bain Alticor Inc. Conferences Just Not in the Way You Think Erik Lagendijk AEGON N.V. Laura B. Tew Arch Chemicals, Inc. Business Intelligence Chicago Going Global: The Challenges Facing Indian Business Corporate Communication New York How CFOs Carve Out Time Corporate Communication for What Counts Most and Technology New York

24 the conference board 2005 annual report products & services products & services

on the record series thinking offshoring through series European Council of Controllers Bo Gustavsson AB Volvo Alain Belda of Alcoa Beyond Costs: Financial and CONFERENCE Robert H. Parkes Urenco Limited Julien De Wilde of Bekaert Operational Risks Frank Vromant Bekaert S.A./N.V. BOARD INITIATIVES Nandan M. Nilekani of Infosys The New Corporate Reality: External and Market Considerations European Council on Magazine Stan Shih of The Acer Group Organizing Offshore Operations: Corporate Strategy Across the Board bimonthly Management and HR Concerns Hein Schreuder DSM N.V. Thinking Offshoring Though European Council Annual Essay from the 2004 annual report Councils on e-Procurement Building a Culture of Candor: meetings Paul Brackel Unilever N.V. Asia-Pacific Learning and A Crucial Key to Leadership European Council on Knowledge Management Council by Warren Bennis Conferences Information Technology CEO Challenge Hong Kong, Shanghai (2) Governance and Strategy Controllers’ Council Newsletters Patrick Arlequeeuw Procter & Gamble Change Management New York Council for Business Company Board Asia quarterly Corporate Security, Development and European Council on Innovation Board Europe bimonthly Business Continuity and Integration Executives Heidi Kleinbach Sara Lee / Coffee & Tea Crisis Management New York Randolph M. Croyle Division Board News quarterly The Dow Chemical Company Enterprise Learning Strategy European Council on E-mail Express biweekly New York Council for CFEs of Mergers & Acquisitions Ulf Hoof ABB Asea Brown Boveri Ltd Enterprise Risk Management Mid-Market Companies Meeting London, New York Council of CFOs European Council on 2004 Annual Meeting New York Frank R. Gatti ETS Strategic Manufacturing Growth and Innovation New York Jochen Jacobs Henkel KGaA Council of Chief Audit Executives Post-Merger Integration New York Philippe Roodhooft Borealis Polymers NV Kimberly Parker Gavaletz Lockheed Strategic Alliances New York Martin Corporation European Council on Strategic Outsourcing New York Council of Chief Privacy Officers Strategic Risk Management Strategic Spend Management European Tax Executives Council New York Council of CIO Executives Brandt R. Allen University of Virginia Global Council of Investor Other face-to-face forums Council on Competitive Analysis Relations Executives Svetlana Shaknes Standard & Poor’s Robert F. Drennan, Jr. Progress Energy, Inc. Business Continuity, Security Corporation and Crisis Management Seminar Hungarian Council of New York (2), San Francisco (2) Council of Corporate Finance Executives Security Executives Change Management Seminar Information Research and Timothy T. Janes Capital One Financial New York Corporation Management Council Homeland Security Roundtable Council of Corporate Treasurers Learning and Knowledge Boston (2), Chicago, San Francisco (2) Thomas C. Deas, Jr. FMC Corporation Management Council James I. Mitnick Turner Construction Homeland Security Seminar Thomas W. Grein Eli Lilly and Company Company New York Susan M. Kreh PPG Industries, Inc. Middle East Business Strategic Outsourcing Seminar Cathie Lesjak Hewlett-Packard Company New York Leaders Council Council for Division Leaders – Financial Executives Online Strategy Council Webcasts Thomas Hoehn Eastman Kodak Co. David C. Walker GMAC Mortgage Doing Business in China: Trading Corporation Catherine M. Wilson Pfizer Inc Rights, Distribution Rights and Polish Council of Commercial in China Post-WTO (2) Council of Financial Executives David B. Rickard CVS Corporation Finance Executives William H. Hernandez PPG Industries, Inc. integrating acquisitions series Research Council on Building Core M&A Capabilities Council on Innovation Global Investment Harold H. Schmitz Mars, Incorporated P. Brett Hammond TIAA-CREF A Contingency Framework and Practical Lessons Learned Council of Strategic Strategic Risk Planning Executives Management Council Offshoring, Outsourcing and Richard J. Lunardi CNF Inc. Tara Heusé Skinner Synovus Growth Opportunities: What Financial Corp. Council of Tax Executives Can We Learn from the Chinese Norman B. Richter Textron Inc. Experience? Council of Telecommunications Executives Thomas J. Marcin DuPont Company European Council of Chief Financial Officers Rudolf Zemp Maus Frères S.A.

2005 annual report the conference board 25 annual essay

Corporate Leadership in an Uncertain World by douglass c. north

oes understanding how a political-economic current environment and how we got there. But they system functions help us to understand how are subjective and at best only partly correct. Da business organization within that system In fact, history shows that our theories have functions? The answer is clearly yes. In both cases, been wrong more often than right, resulting in the structures are created to organize markets; the effi- demise of whole civilizations when we have misinter- ciency of the resulting exchange will determine per- preted what is happening to us. Given that only a small formance, whether of the economy as a whole or of percentage of businesses around today were also the individual enterprise. Businesses are themselves present 20 or even 10 years ago, survival is a thresh- concentrated institutional structures that, like the old challenge for businesses as well. We improve our markets they operate in, are always fine-tuning their chances of survival by continually developing better organizations to perceive the world more accurately theories, grounded in empirical evidence of the ever- and to evolve strategies that help them perform. In changing environment. Survival depends on a complex short, businesses, like economies, organize labor, institutional structure that will provide the correct develop incentive structures, apply knowledge and incentives for humans to continue to evaluate their technology, and monitor their own performance. surroundings critically and undertake the necessary Also, in the complex interdependent world changes when the evidence derived from additional we have created, efficient business organization is information suggests the need for revision. intimately tied to the performance of the overall There is no guarantee that the essential institu- economy. But we only imperfectly understand the tional structure will, in fact, evolve. Indeed, throughout very complex nature of economic systems and history, societies have disintegrated because they

Douglass C. North, co-recipient the way they change. To improve that understanding have failed to create such a framework. The rise and of the 1993 Nobel Prize in Economic and leverage it into institutions and their policies is fall of the Soviet Union is the most recent dramatic Science, is the Spencer T. Olin the intellectual task of the economist. The practical illustration. I believe that the same issues are applica- Professor in Arts and Sciences at Washington University. Dr. North challenge of the business leader is to enable this ble to business organization and how it changes. is a member of the American improved understanding to permeate the business The second issue is that it is a non-ergodic world. Academy of Arts and Sciences and a Fellow of the British Academy. organization in such a way that the organization uses If the world we are trying to understand remained He is a frequent advisor to the World it most effectively in a constantly changing world. constant and unchanging, then the lessons from past Bank and to countries around the world on issues of economic growth. What is required is a deeper understanding of experience would serve as a guide to future choices. 1) how the mind interprets the external environment And, indeed, much of the theory developed in the social The evolution of Dr. North’s wide- ranging research interests in econom- and 2) the process of decision making in a non- sciences assumes such a static environment. But if ic institutions and economic change ergodic world — that is, a world that is evolving in we human beings are continually modifying our exter- is expressed in ten books, including Institutions, Institutional Change and new and novel ways and at an unprecedented pace. nal environment, the lessons from the past would Economic Performance (Cambridge Let us explore each issue. help us solve future problems only to the extent these University Press, 1990) and Under- standing the Process of Economic First, by what means does any of us understand problems are similar to those of the past. Many of Change (Princeton University Press, the external environment? The senses — eyes, ears, them are; but we are also creating new and novel 2005). nose, and feel — send signals to the brain, which then worlds unlike anything in the past, and understanding

The Annual Essay constructs an interpretation of the external environ- what is happening to us is essential for our continual Each year, The Conference Board ment. This interpretation is reinforced or weakened survival. How should we deal with such uncertainty? publishes in its Annual Report an original and timely commentary by as the senses provide additional signals consistent We can get some clues by looking at how humans a leading economic or management with it or at odds with it. Our beliefs are subjective have confronted uncertainty in the past. thought leader. Past essayists have interpretations made possible by the impressive included Warren Bennis, Jim Collins, Peter Drucker, Dale Jorgenson and development in humans of larger brains, language, Lessons from History Paul Volcker. and consciousness — that is, self-awareness of our- Throughout most of the human experience, the selves in time and space. The result is elaborate uncertainty humans have faced has been a conse- belief systems that explain where we are in time quence of the physical environment. Climate, and space. Explanations — theories — account for our weather, and earthquakes were the primary sources

26 the conference board 2005 annual report of uncertainty to be overcome or at least contained. Everything economists have learned since then The development of agriculture some ten millennia reinforces this assertion. ago was a major breakthrough because it permitted Impersonal exchange — exchange between par- humans to expand the resource base rather than, ties with no knowledge of each other and occurring as hunter/gatherers, simply exploit the existing one. over time and space — not only runs counter to The result was the creation of civilization as we know innate genetic features of humans that evolved over it. But the consequent political, economic, and social the several million years that humans were hunter/ structure that evolved became ever more complicated, gatherers; it also is simply an open invitation to fraud, and the uncertainties of human interaction — the cheating, and corrupt practices. In fact, in the absence human environment — replaced those of the physical of the essential institutional safeguards, impersonal environment as the most significant. exchange does not exist except in cases where strong These uncertainties arise from transaction ethnic or religious ties make reputation a viable under- costs, which are the costs involved in human interac- pinning. tion, specifically the costs of measuring what is What is required is a political institutional struc- being exchanged and of enforcing agreements. That ture that will put in place the rule of law and the nec- rather innocuous-sounding assertion is at the heart essary enforcement structure. The need to establish

We are creating new and novel worlds unlike anything in the past, and understanding what is happening to us is essential for our continual survival.

of the problems of economic efficiency. Throughout such a framework to guide business is at the core of most of history, exchange has been based on per- why issues of transparency and corporate governance sonal knowledge of the other party. Reputation and are so important. But the fact that such a framework repeat dealings have been the basis for confidence must substitute effectively for the “trust” that comes that the exchange would be lived up to in terms of with personal exchange means that establishing it both the quantity and the quality of the good or serv- entails a fundamental overhaul of both the economic ice exchanged and that the agreement would be exe- and the political institutions. The failure to create the cuted in accordance with the understanding of both essential institutional base is the central problem of parties. Transaction costs in such cases were small. economic development. But also, markets were of necessity small. As long-distance trade expanded in the Middle Institutions and Economic Performance Ages, the difficulties of exchange between parties Institutions structure human interaction. They are that did not know each other posed fundamental the incentive structure of a society and are designed transaction cost problems. At the champagne fairs in to reduce the uncertainties of those players in a France in the twelfth century, one merchant was position to alter them. To understand the role of insti- designated to collect information on the reliability of tutions in a society, we need to explore what they the merchants attending the fair; when contemplating are, who designs them, and why they always work an exchange that was not instantaneous, a merchant imperfectly. would seek advice from the designated merchant on Institutions are made up of formal rules and the reliability of the other party. But extending personal informal constraints, along with enforcement knowledge by such devices has limits with respect mechanisms for both. Formal rules are laws, rules, to the size of markets. And Adam Smith, the patron saint of economists, was unequivocal in his assertion that specialization, division of labor, and the size of markets are the source of the wealth of nations.

2005 annual report the conference board 27 and regulations. Informal constraints are conventions, of the human environment, and we have only a vague codes of conduct, and norms of behavior. Enforcement understanding of the complexities of the latter. ranges from first party enforcement (humans living up Indeed, uncertainty is the norm; risk assessment to institutional requirements because they believe in involves probabilities that are based on the past them) to second party enforcement (retaliation) to third but of only limited use in responding to the future. party enforcement (ranging from the force of peer The structure of society and, in this case, the busi- approval to police, armies, etc.). All of these elements ness organization must enable uncertainty to be are present in the incentive structures and values- incorporated into decision making. based leadership challenges of modern business Individual social science disciplines give us organizations. insights into individual parts of a society, but these The structure of a political system, from disciplines are seldom woven together to give us authoritarian regimes to direct democracy, defines a comprehensive picture of how a society operates; who makes the rules. The economic rules — property and they are static — telling a story at an instant of rights — are always made by whomever runs the politi- time when what we need is an integrated story over cal system and obviously are designed to reduce the time. Nor do these disciplines confront the problem uncertainties of those making them. of understanding new and novel problems: How do I can illustrate why institutions work imperfectly the minds of those in charge of institutional change by exploring an analogous institutional setting — come to comprehend what is happening to us? professional football. The rules, devised by the own- It would be comforting to believe that humans ers in the interests of maximizing their revenue, have been prescient enough to understand what include both formal rules and informal norms (such is happening to themselves and act accordingly. But as not deliberately injuring the quarterback of the going back to the first issue — the way the mind opposing team); and there is an enforcement mecha- understands the external environment — the beliefs nism (referees, with the right to impose penalties for humans construct to explain the external world are rule infractions). In fact, the way the game is actually frequently incorrect, particularly if the changes are played depends on the incentives and disincentives creating really novel situations. And clearly, humans that arise from the complex interaction of the parties have evolved environments radically different from — owners, players, and referees. Taking out the quar- anything that existed before. Can we create an insti- terback of the opposing team may have a payoff that tutional environment that will deal imaginatively with vastly exceeds any penalties, even assuming that novelty? There are success stories: the United States the referees could perceive the action and judge it has evolved more or less successfully over more deliberate. The incentive structure of the rules, the than two centuries. How did that happen? accurate measurement of performance, the behavioral The institutions created with initial settlement norms of the participants, and the effectiveness of of the colonies were those carried over from Britain, penalties all lead to wide variation in actual perform- which by the seventeenth century had begun to ance, as even the most casual observation of the evolve property rights in land that encouraged individ- game attests. ual ownership and was also in the course of creating The operation of a political-economic system what we view today as common law. Moreover, the has all these features plus one crucial additional colonies were not considered very important to source of variation — the game is continually chang- England in the early stages and were therefore grant- ing as the participants evolve new aspects of it. ed substantial autonomy and self-government. By The result is a crucial complication and uncertainty the time the colonies became independent, they had not present in a static setting. Survival in a non- the essential institutional underpinnings necessary ergodic environment requires that the participants for a productive economy and polity. Indeed, the understand the implications of the evolving environ- Constitution was built up from the political and ment and make the necessary changes to ensure economic experiences of the colonies. survival in such a setting. This was in striking contrast to the Latin American experience, where Spain, in its successful A Dynamic World pursuit of “treasure,” provided no self-government Even the most cursory view of history makes one and economic activity was generated by monopoly aware of the radical change that has occurred in the grants to individual merchants seeking to mine and human condition. The uncertainties have shifted export gold and silver. When Latin American coun- from those of the physical environment to those tries (of Spanish origin) achieved independence, they

28 the conference board 2005 annual report frequently copied the U.S. Constitution, but absent tive environment will encourage attempts to create the informal rules and enforcement that had evolved monopoly, which if successful will dry up the well- during the American colonial experience, the results springs of adaptive efficiency. were a half-century of recurrent civil war and subse- quent instability. Business Organization and The propitious character of early U.S. develop- Adaptive Efficiency ment explains how, with good fortune, we got it right How much of this is relevant to modern business to begin with. It does not explain the successful organization? Clearly, the dynamic success of the subsequent dynamic development as this country overall economy plays a critical role in the opportuni- evolved from a rural small-scale society of about ty set of an individual enterprise. But more than that, 5 million to a rich urban superpower of almost 300 the individual enterprise in a dynamic world is simi- million. Have we always known what we are doing? larly confronted by uncertainty and must make choices Clearly not, as miscues like the Civil War, one of the that can be guided only partially by past experience. most costly and deadly wars in history, attest. All the sources of uncertainty for an evolving economy (However, the historical heritage had created an are equally important for an individual enterprise — institutional framework that produced rapid recov- changes in information costs, technology, and com- ery, and today the South is a dynamic partner in the petitive conditions. And all the sources of imperfect choices in devising institutions to deal with evolving The structures of both society and uncertainty are equally applicable to the individual enterprise. the business organization must The constructions humans create to confront novel change in the overall economy or in individual enable uncertainty to be incorporated markets require making choices in the face of uncer- into decision making. tainty, and success is dependent on an adaptively efficient approach. In the case of the overall economy, improving the chances of successful survival depends on an institutional structure that: 1. creates a hierarchy in which the decision- overall economy.) We have made many mistakes making entrepreneurs have the interest of and still do. Indeed, the very nature of a non-ergodic the economy as a whole, rather than their world assures you that will happen. own private interest, at heart; But contrast the U.S. story with the history of 2. is adaptively efficient, encouraging experimenta- the Soviet Union. The institutional framework of the tion in the face of the uncertainty that results former created an adaptively efficient structure, from confronting new and novel problems; and while the latter was rigidly constrained. The former 3. evolves decision mechanisms that reward encouraged trial-and-error experimentation, the success — and eliminate failures — arising latter did not. The development of an open access from trial-and-error experimentation. society — one that encourages entry into political So, too, in the case of the individual enterprise, and economic markets — creates an institutional improving the chances of success depends on an framework that encourages such experimentation organizational structure that: in the face of the uncertainties of novel change. 1. creates entrepreneurs with a concern for The Soviet Union, founded on a set of beliefs that the welfare of the overall enterprise; “knew the truth,” could make only superficial reforms 2. is adaptively efficient, enabling the organization in the face of increasing stagnation. Both societies to learn, assimilate information, and adjust the were constrained by their heritage, which determined organizational structure in the face of uncertainty the flexibility of the resulting institutional structure. and continuous novel change; and Open-access societies confronted with uncer- 3. develops incentives that reward success tainty will produce an adaptively efficient structure. and mechanisms that eliminate failures that But it should be carefully noted that there is no guar- will inevitably occur — especially as a result antee that open-access societies will remain that of innovation — in a non-ergodic world. way. The pervasive search for security in a competi-

2005 annual report the conference board 29 Financials

statements of financial position (in us$ thousands) June 30 2005 2004 Assets Cash and cash equivalents $ 6,803 $ 5,893 Accrued interest receivable 116 81 Accounts receivable 5,445 5,929 Investments, at fair value 19,600 18,005 Securities purchased not yet settled 2,145 – Deferred charges and sundry assets 1,551 1,343 Pension asset 6,956 5,488 Furniture, equipment, software, and leasehold improvements— at cost, less depreciation and amortization 2,547 2,879 Total Assets $ 45,163 $ 39,618

Liabilities and Net Assets Accounts payable and accrued liabilities $ 7,597 $ 5,971 Advance payments and deferred revenue 9,733 8,767 Deferred subscription revenue 8,588 8,353 Due to broker 2,145 – Post-retirement benefit obligation 3,203 3,054 Total Liabilities 31,266 26,145

Net Assets Unrestricted 13,810 13,295 Temporarily restricted 87 178 Total Net Assets 13,897 13,473

Total Liabilities and Net Assets $ 45,163 $ 39,618

Note: The information on pages 30 and 31 was extracted from the Financial Statements audited by Ernst & Young llp. These statements are available upon request.

30 the conference board 2005 annual report financials

statements of activities (in us$ thousands) Year ended June 30 2005 2004 Operating Revenue Subscriptions $15,942 $ 14,937 Conferences, councils, and meetings 29,550 25,991 Grants, contracts, and fee-based services 4,327 4,629 Sale of publications 391 380 Other income* 618 462 Total Operating Revenue 50,828 46,399

Operating Expenses Compensation 24,021 22,803 Purchased services 9,032 7,693 Travel 1,775 1,594 Meeting location costs 6,095 5,183 Printing, postage, and supplies 4,232 3,811 Depreciation and amortization 771 932 Facilities 3,042 2,977 Other expenses 1,543 1,156 Total Operating Expenses 50,511 46,149 Excess of Revenue from Recurring Operations 317 250

Other Activities Nonrecurring legal expenses (579) – Interest, dividends, and other income 261 168 Realized gain on disposal of investments 396 414 Unrealized gain in the fair value of investments 55 904 Effect of foreign currency translation (35) (21) Transfer of temporarily restricted net assets to unrestricted net assets 100 – Change in unrestricted net assets 515 1,715 Change in temporarily restricted net assets (91) 9 Change in net assets 424 1,724 Net assets as of the beginning of the year 13,473 11,749 Net Assets as of the End of the Year $ 13,897 $ 13,473

* Includes $337,000 and $68,000 in 2005 and 2004, respectively, of Operating Fund investment income.

2005 annual report the conference board 31 Global Counsellors

asia/pacific Singapore Jess Søderberg Klaus Kleinfeld S. Dhanabalan Partner and CEO President and CEO Australia Chairman A.P. Møller - Maersk Group Siemens ag Linda Bardo Nicholls Temasek Holdings (Pte) Ltd. Chairman Peter Straarup Edward G. Krubasik Australia Post Koh Boon Hwee2 Chairman of the Executive Board Executive Vice President and Chairman and the Executive Committee Member of the Management John B. Prescott, a.c.3 Singapore Airlines Ltd. Danske Bank as Board Chairman Siemens ag Australian Submarine Lim Chee Onn4 Finland Corporation Pty Ltd Executive Chairman Jukka Härmälä Jürgen E. Schrempp1 Keppel Corporation Limited President and CEO Chairman of the Board of John B. Reid, a.o.3 Stora Enso Management and CEO Chairman Emeritus middle east DaimlerChrysler ag Australian Graduate School Ole Johansson of Management Egypt President and CEO Greece University of New South Wales M. Shafik Gabr Wärtsilä Corporation Yannis S. Costopoulos Chairman and Managing Director Chairman of the Board of China Mikael Lilius4 ARTOC Group Directors and CEO Jing Shuping1 President and CEO Alpha Bank Chairman of the Israel Fortum Corporation Board of Directors Ireland Doron Tamir France Minsheng Banking Corporation Chairman Liam O’Mahony Philippe Camus RDT Investments Group Chief Executive Hong Kong Co-Managing Partner CRH plc Andrew C. W. Brandler2 Kuwait Lagardère Italy Group Managing Director Hisham Abdulrazzak Al-Razzuqi2 Bertrand Collomb4 2-4 and CEO Chief Executive Officer Mario Monti CLP Holdings Ltd. Gulf Investment Corporation Chairman of the Group Chairman Chairman of the Board of Università Bocconi Marjorie Yang Oman Directors Chairman Sayyid Khalid Bin Hamad LAFARGE Netherlands Esquel Group of Companies Al Bu Said2 Peter Bakker2 1 Chairman Henri Lachmann Chief Executive Officer India Sabco l.l.c. Chairman and TNT n.v. Mukesh D. Ambani4 Chief Executive Officer sa Chairman and Managing Director europe Schneider Electric Industries Rijkman W. J. Groenink Reliance Industries Ltd. Chairman of the Managing Board 1 n.v. Belgium Gérard E. Worms ABN AMRO Bank Nandan M. Nilekani4 General Partner François M. G. Cornelis4 Chief Executive Officer, Rothschild et Cie Banque P. J. Kalff3 President and Managing Director Vice Chairman of the Former Member of the Infosys Technologies Limited Executive Committee and Germany Supervisory Board Executive Vice President Josef Ackermann4 n.v. a. ABN AMRO Bank . Malaysia TOTAL s. Spokesman of the Board of Dato’ Tan Teong Hean Managing Directors and Jonkheer Aarnout A. Loudon3 Viscount Etienne Davignon2 Chief Executive Director Chairman of the Group Chairman of the Vice Chairman Southern Bank Berhad a Executive Committee Supervisory Board Suez-Tractebel s. . Deutsche Bank ag Akzo Nobel nv Philippines Julien De Wilde Roberto F. de Ocampo Roland Berger Kees J. Storm4 Chief Executive Officer President a Chairman and Global Member of the Supervisory Board Asian Institute of Management N.V. Bekaert s. . Managing Partner AEGON n.v. Thomas Leysen Roland Berger Strategy Oscar M. Lopez Consultants Morris Tabaksblat3-4 Chairman and Chief Executive Officer Retired Chairman and CEO Umicore Chief Executive Officer Gerhard Cromme4 Unilever n.v. First Philippine Holdings Anton van Rossum Chairman of the Corporation Supervisory Board C. J. A. van Lede3 Member of the Board of Directors ag Member of the Supervisory Board Crédit Suisse Group ThyssenKrupp Washington Z. SyCip3-4 Akzo Nobel nv 4 Founder Karel Vinck Michael Diekmann The SGV Group Chairman of the Norway Chairman of the Board Management Board and CEO Johan H. Andresen, Jr. Umicore Allianz ag Owner and Denmark Chief Executive Officer as Mads Øvlisen Ferd Holding Chairman of the Board Novo Nordisk a/s

32 the conference board 2005 annual report global counsellors

Poland Patrick J. Cescau Alain J. P. Belda4 Ellen R. Marram3 Maria Wišniewska Group Chief Executive Chairman and CEO Managing Director Vice President Unilever plc Alcoa Inc. North Castle Partners, l.lc. Polish Confederation of Private Employers Harald Einsmann Robert H. Benmosche4 W. Craig McClelland3-4 Executive Chairman of the Board Chairman and CEO Retired Chairman and CEO Spain Findus a.b. Metropolitan Life Insurance Co. Union Camp Corporation César Alierta Izuel4 Chairman and Niall FitzGerald KBE4 Douglas R. Conant4 Hutham S. Olayan4 Chief Executive Officer Chairman President and CEO President and CEO Telefónica s.a. Reuters Group plc Campbell Soup Company Olayan America Corporation

Isidro Fainé Casas Lord Marshall of Knightsbridge3 Alfred C. DeCrane, Jr.3 James W. Owens4 President and CEO Chairman Retired Chairman and CEO Chairman and CEO La Caixa Pirelli UK plc Texaco Inc. Caterpillar Inc.

Francisco González Rodriguez4 Sir Bryan Nicholson, GBE Robert E. Denham3 Donald K. Peterson4 Chairman and CEO Chairman Partner Chairman and CEO BBVA Financial Reporting Council Munger, Tolles & Olson llp Avaya, Inc.

Ignacio Sánchez Galán Sir Martin Sorrell Livio D. DeSimone3 Jane Cahill Pfeiffer3 Vice Chairman and CEO Group Chief Executive Retired Chairman and CEO Management Consultant Iberdrola s.a. WPP Group plc 3M Company Stephen W. Sanger3 Sweden Peter D. Sutherland3 Samuel A. DiPiazza, Jr.4 Chairman and CEO Tom Johnstone Chairman and Managing Director Chief Executive Officer General Mills, Inc. President and CEO Goldman Sachs International PricewaterhouseCoopers llp 3 SKF ab Henry B. Schacht André Villeneuve4 Laurence D. Fink4 Director and Senior Advisor Lars G. Nordström Chairman Chairman and CEO Lucent Technologies, Inc. Group Chief Executive Officer Euronext.liffe BlackRock, Inc. 4 Nordea ab Anne M. Tatlock Jacob A. Frenkel4 Chairman and CEO Marcus Wallenberg4 Vice Chairman Fiduciary Trust Company Chairman of the Board Chile Chairman, Global Economic International SEB Fernando Leniz1 Strategies Group 4 Chairman American International Group, Inc. Paul A. Volcker Switzerland ANAGRA s.a. Former Chairman of Fritz F. Fahrni Christina A. Gold3 the Board of Governors Chairman Mexico President The Federal Reserve System Innovation Management Dionisio Garza Medina Western Union and Logistics Chairman of the Board and CEO 3 Institute of Technology, Alfa Corporativo, s.a. de c.v. John W. Johnstone, Jr. Management and Retired Chairman and CEO Entrepreneurship Tomás González Sada Olin Corporation University of St. Gallen Chairman of the Board, 1 Harry P. Kamen3 Until November 3, 2005 President, and CEO 2 Chairman of the Board As of November 3, 2005 Grupo Cydsa, s.a. de c.v. 3 and CEO (Retired) Former Trustee Bülent Eçzaçibasi 4 Global Advisory Council Member Chairman Federico Sada Metropolitan Life Insurance Eçzaçibasi Holding a.s. Chief Executive Officer Company Grupo Vitro 4 Güler Sabanci Harry M. Jansen Kraemer, Jr. Chairman Panama Executive Partner Haci Ömer Sabanci Holding a.s. Stanley A. Motta Madison Dearborn Chairman United Kingdom Banco Continental de Panama H. William Lichtenberger Sanjiv Ahuja3 Chairman Chief Executive Officer north america Noveon Orange s.a. United States Lord Browne of Madingley3 Paul M. Anderson Group Chief Executive Chairman and CEO BP p.l.c. Duke Energy Corporation

2005 annual report the conference board 33 Board of Trustees

chairman vice chairmen

Niall FitzGerald kbe1 Josef Ackermann Douglas R. Conant Harry M. Jansen Chairman Spokesman of the Board of President and CEO Kraemer, Jr. Reuters Group plc Managing Directors and Campbell Soup Company Executive Partner Chairman of the Group Madison Dearborn Executive Committee Deutsche Bank ag

Samuel A. DiPiazza, Jr.2 Nandan M. Nilekani Anne M. Tatlock Chief Executive Officer Chief Executive Officer, Chairman and CEO PricewaterhouseCoopers llp President and Managing Director Fiduciary Trust Company Infosys Technologies Ltd. International

members Herbert M. Allison, Jr. Alan M. Dachs Rijkman W. J. Groenink Samuel C. Scott III Chairman, President and CEO President and CEO Chairman of the Managing Board Chairman, President and CEO TIAA-CREF Fremont Group, l.l.c. ABN AMRO Bank n.v. Corn Products International, Inc. Alain J. P. Belda Erroll B. Davis, Jr. Klaus Kleinfeld Stephen G. Snyder Chairman and CEO Chairman President and CEO President and CEO Alcoa Inc. Alliant Energy Corporation Siemens ag TransAlta Corporation Robert H. Benmosche Ian E. L. Davis Linda Bardo Nicholls Sir Martin Sorrell Chairman and CEO Managing Director Chairman Group Chief Executive Metropolitan Life Insurance Co. McKinsey & Company Australia Post WPP Group plc Stephanie A. Burns S. Dhanabalan Hutham S. Olayan Anton van Rossum President and CEO Chairman President and CEO Member of the Dow Corning Corporation Temasek Holdings (Pte) Ltd. Olayan America Corporation Board of Directors Crédit Suisse Group Richard E. Cavanagh Jeffrey E. Garten Sharon Patrick1 President and CEO Juan Trippe Professor of Former President and CEO Ronald A. Williams The Conference Board, Inc. International Trade, Martha Stewart Living President Finance and Business Omnimedia, Inc. Aetna Inc. Patrick Cescau Yale School of Management Group Chief Executive Edward B. Rust, Jr. Marjorie Yang Unilever plc Anne Golden Chairman and CEO Chairman President and CEO State Farm Insurance Companies Esquel Group of Companies Paul W. Chellgren The Conference Board of Retired Chairman of Canada the Board and CEO Ashland Inc.

1 Until November 3, 2005 2 As of November 3, 2005

34 the conference board 2005 annual report Our Mission The Conference Board creates and disseminates knowledge about management and the marketplace to help businesses strengthen their performance and better serve society. Working as a global, independent membership organization in the public interest, we conduct research, convene conferences, make forecasts, assess trends, publish information and analysis, and bring executives together to learn from one another.

Milestones*

1916 Establishment of 1951 The Help-Wanted 1997 Creates the Ron 2001 Lord Marshall of The Conference Board as a Advertising Index is launched Brown Award for Corporate Knightsbridge (and CEO of not-for-profit, nonpartisan Leadership, the first presiden- Britsh Airways) is elected research and business mem- 1967 Creates The tial award honoring compa- first non-U.S. Chairman of bership organization Conference Board Consumer nies for outstanding Board of Trustees Confidence Index citizenship programs 1918 Conducts pioneering 2002 Convenes The research on working women 1976 Establishes 1998 Holds its first major Conference Board and safety in the workplace The Conference Board meeting in India, bringing Commission on Public Trust CEO Confidence Index together leaders from the and Private Enterprise 1919 Establishes the first United States, Europe and continuous measure of the 1980 Launches new research India 2003 Launches the cost of living across America on the practices of boards of Consumer Internet Barometer directors 1999 Designs business 1920 Defines the eight-hour cycle indicators for eight 2004 Establishes the workday 1993 Establishes The nations—Japan, Korea, the Directors’ Institute to provide Conference Board Global United Kingdom, France, governance education for 1926 Establishes the first Corporate Governance Spain, Mexico, Australia directors serving on corporate Conference Board Council of Research Center and Germany—that, along with boards Human Resources Executives the United States, account 1996 Assumes control of for two-thirds of global GDP 2005 Creates The 1940s Begins tracking direc- the U.S. Leading Economic Conference Board China tors’ compensation and corpo- Indicators from the U.S. 2000 The Conference Board Center for Business and rate contributions government and the Asia Society form the Economics, which will be Asia Business Initiative, link- based in Beijing and New 1950s Begins ongoing ing business and government York, as a focal point for research on the impact of leaders throughout Asia, the knowledge and data on the federal budget on the United States and Europe the Chinese economy U.S. and world economies

*Milestone years are in Conference Board fiscal years.

Communications Randall Poe, Printing Thames Printing Carol Courter Photography Creative Peter Drubin Marino Belich, Peter Drubin, Arthur Krasinsky, Susan San Giovanni, John Harrington, Editors John Lumea, Timothy Dennison Jennie Zeiner, Warren Skalski photography, Brian Fox, Icon Photography

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