annual report 2006

90years of trusted insights

annual essay Sir Harold Evans on Innovation

2006 annual report the conference board 3 CHAIRMAN’S LETTER 03 PRESIDENT’S LETTER 04 BUSINESS REVIEW 07 HISTORICAL OVERVIEW 16 ANNUAL ESSAY 22 PRODUCTS & SERVICES 28 FINANCIALS 34 GLOBAL COUNSELLORS 36 TRUSTEES 38

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. Chairman’s Letter

I congratulate The Conference Board on its 90th anniversary and our loyal members and talented staff for making its 90th year its best year! Once again, The Conference Board’s research and learning has helped companies strengthen their performance and better contribute to society. Seven of my Trustee colleagues conclude their service this year: Robert Benmosche, Erroll Davis, S. Dhanabalan, Niall FitzGerald KBE, Rijkman Groenink, Stephen Snyder, and Sir Martin Sorrell. We applaud their dedication and leadership, and acknowledge the contribution they have made to our strategy and governance. Let me also salute Dick Cavanagh, our president and CEO, who has provided exemplary leadership since 1995, and who announced his plans to step aside earlier this year. During his tenure, The Conference Board renewed its reputation, extended its global reach, enjoyed unprecedented prosperity, and executed initiatives in corporate governance and workforce diversity that have changed the heart and soul of business practice.

Respectfully submitted,

Samuel A. DiPiazza, Jr. Chairman, The Conference Board, Inc. Chief Executive Officer, PricewaterhouseCoopers llp

2006 annual report the conference board 3 President’s Letter

e are pleased that our 90th year was also our Domestically, this year saw the advent of our W tm best year. Help-Wanted Online Data Series, a complement to As is the case for any organization that creates our monthly compilation and analysis of newspaper intellectual capital, our key measurements of success classified ads. This database covers all 50 states and include “impact and relevance.” In these realms, the top 52 U.S. metropolitan areas. our work and our people were cited more than 44,000 times in the media — generating 5.5 billion Strengthening Partnerships media impressions on subjects ranging from eco- Working with other like-minded organizations has nomic forecasts to advice on preparing for an avian long been a fruitful way to leverage our resources, flu pandemic. Our economic reports regularly moved avoid duplication of effort, and deliver superior the markets, our work on corporate governance value to our members. This year saw a renaissance has improved the conduct in boardrooms around in productive partnerships and joint ventures. the globe, and our research and outreach in work- Building on the second year of our successful force diversity has changed the face of management collaboration with the (U.S.) Business Council to in large-scale enterprises. survey and explain CEO sentiment about business Beyond our ongoing research and learning conditions, we extended the effort to Europe opportunities to advance the free enterprise system, (France and Germany) and Asia (Hong Kong and this year saw a number of new initiatives and some Singapore). The aim is to create and distribute new partnerships — and yielded record performance. timely knowledge about the economic perceptions of CEOs worldwide. New Initiatives In a similar vein, we joined forces with two We launched our China Center for Economics world-class business schools in joint research and Business this April in Beijing, dedicating our (INSEAD) and seminars (London Business School). new centrally located offices in the Qijiayuan We also held an inaugural conference on leadership Diplomatic Compound. Ten multinational firms, with the U.S. Naval Academy, complementing our headquartered in Asia, Europe, and North America, longstanding program with West Point. And we have have committed substantial financial and intellectu- launched a research consortium with three leading al resources for the three-year start-up phase. Our human resources associations to advance under- senior advisory board, co-chaired by Paul Volcker standing of workforce preparedness. and Chen Yuan (the governor of the China We joined with the National Safety Council in Development Bank), held its inaugural meeting sponsoring a global environmental health and safety at the Diao Yu Tai State Guesthouse. The Center award and were recognized by the Clinton Global will conduct research, both independently and with Initiative for our joint corporate social responsibili- key Chinese partners like the National Bureau of ty program with Harvard and the Shorenstein Statistics, the Development Research Center, and Foundation. And last but not least, we have been the Peoples’ Bank, on business cycles, productivity, favored by generous support of our research on, and competitiveness. and outreach to, the maturing workforce by The We have been busy helping companies around Atlantic Philanthropies. the world learn from one another to prepare for an By no means new, the Ron Brown Award avian flu pandemic. To this end, we conducted a for Corporate Citizenship was presented to Bayer 500-company survey, generated a timely Executive Corporation, Johnson & Johnson, and S. C. Johnson Action report, and hosted two sold-out (and brac- & Son. This was the seventh White House Award ing) webcasts. ceremony for the award we administer to honor exemplary corporate behavior.

4 the conference board 2006 annual report Record Performance Conference on Aging. Our own President’s Award Last year, our talented and hard-working staff set was presented to Carolyn Brancato for her pioneer- 10 all-time records in areas ranging from mem- ing work in corporate governance. bership subscriptions to staff productivity to capi- This annual letter is my eleventh and final talizing on the Internet. This year, we surpassed one. I have decided to follow my own advice to these same 10 records. others about the practice of stepping aside after One reason for success is that our members a decade of leadership service. During that time, are exceedingly loyal — over 98 percent of our I have been blessed by wise Trustees, talented key customers chose to renew their membership colleagues, and loyal and generous members who this year. During the past year, we counted 19 have made my service a privilege, for which of the 20 largest U.S. companies, 80 percent of I am grateful. the Fortune 100 companies, and all of the 20 most respected companies in the world as members. Respectfully submitted, Overall, we experienced 10 percent revenue growth, earned a better than expected surplus, and returned $785,000 to our reserves. We saw exceptional growth in Asia (52 percent), webcasts (62 percent), sponsored research (30 percent), Richard E. Cavanagh and governance programs (26 percent). President and CEO, The Conference Board, Inc. Several of our researchers received important recognition. Two economists were lauded for their insights and prescience — Gail Fosler, by the Wall Street Journal, and Ken Goldstein, by the International Herald Tribune. Judy Bannister, our new global demographer, won the Klein Award from the U.S. Bureau of Labor Statistics. And Linda Barrington, Lorrie Foster, and Jeri Sedlar were selected as delegates to the White House

2006 annual report the conference board 5 Michael Christiansen Managing Director, The Royal Danish Theatre, addressed Trustees at the Royal Opera House in Copenhagen.

Ann Henry Vice President, Global Operations, HP Financial Services, discussed the challenges of global redesign at The Conference Board Organizational Design and Renewal Conference.

Steve Kerr Managing Director and Mukesh Ambani Chief Learning Officer, Goldman Sachs Chairman and Managing & Co., participated in a panel at the Director, Reliance Industries, Senior Human Resources Conference Ian E. L. Davis Managing Director, McKinsey & at The Conference Board that examined today’s most critical Company (left), and Robert H. Benmosche retired Directors’ Institute program human resources issues. Chairman and CEO, Metropolitan Life Insurance Co., hosted at Reliance Industries, are Trustees of The Conference Board. Trustees represent Jamnagar. 15 nationalities and nearly half are CEOs of firms based outside of the United States.

6 the conference board 2006 annual report the conference board Business Review 2005-2006 Global Growth and Global Impact

tarted in 1916 as an organization of leading U.S. manufactur- on leadership development practices and, more specifically, ers, The Conference Board continued to meet its mission how multinational companies face the challenge of developing Sof serving business worldwide in its 90th year. More execu- local leaders in Asia. tives than ever profited from the business knowledge provided by The Conference Board, which now serves companies in all industries A State of Business Report: CEO Challenge 2006 and in many countries around the world. The Conference Board has In addition to bringing CEOs together, The Conference Board also always specialized in providing business knowledge to top compa- took the pulse of their opinions on major business issues in this nies, but now its wisdom is being spread globally. Extending its out- year’s edition of the annual CEO Challenge Survey. This was the reach, the organization held an increasing number of economic and most far-reaching survey yet, with responses from nearly 700 management briefings this year. It also intensified its role as a global CEOs from 40 countries. CEO Challenge 2006: Perspectives leading shaper of business values, delivering a wide range of studies and Analysis, an overview of the results, shows major differences and events focusing on citizenship, corporate governance, business among CEOs based in different parts of the world. For example, ethics, diversity, economics, human resources management, and how CEOs in Europe and Asia put equal emphasis on the challenges companies are responding to natural disasters. of sustained and steady top-line growth and profit growth, while U.S. CEOs are significantly more likely to rate sustained and steady Investigating Changes in the Global Workforce top-line growth over profit growth. Sajjan Jindal, vice chairman and One of the fastest growing business issues in the country is the managing director of India’s JSW Steel, Ltd., echoes many CEOs oncoming retirement of 64 million baby boomers from the U.S. in Asia when he explains that growth is significant because of its

“The Conference Board has a world vision with a global network.”

Sir C.K. Chow CEO, MTR Corporation labor force by the end of this decade. To help management handle importance to shareholders. “You have to have consistent growth, this development, The Conference Board Research Working Group quarter to quarter,” he says, and that “can only happen if you have on Managing Mature Workers produced Managing the Mature customer loyalty and innovation because, the way the world is Workforce, an in-depth study that pinpoints how organizations moving, it’s becoming imperative, very important, for everybody to can be strengthened by the right mature workers. In the coming stay on their toes and keep on changing.” year, The Conference Board will embark on a study on increasing the inclusion of older adults in the workforce that is being sup- Fostering Corporate Citizenship and Sustainability ported by a $2-million grant from The Atlantic Philanthropies. The Continuing its long tradition of supporting research in the fields Conference Board also received a grant from Microsoft Corporation of social responsibility and corporate citizenship, The Conference to support research on innovation that will draw on the econom- Board issued Philanthropy and Business: The Changing Agenda. ic and management perspectives. The multinational survey finds that companies are increasingly Mature workforce studies at The Conference Board are just seeking to align their giving programs more closely to their busi- one part of a larger management research program that also con- ness needs and improve their measurement of results and out- centrates on strategic workforce planning, talent management, and comes. This topic had particular relevance this year because of employee engagement. Leadership Development in Asia-Pacific: corporations’ desire to help people and communities damaged Identifying and Developing Leaders for Growth, which was based on by hurricanes Katrina and Rita. The Conference Board also findings from a research working group, provided a valuable primer partnered with the World Bank Institute, the Kennedy School of

2006 annual report the conference board 7 Ron Brown Award ceremony The White House, Washington D.C.

Left to right Dana G. Mead Chairman, Massachusetts Institute of Technology, and Chairman of the Ron Brown Award Board of Directors Carlos M. Gutierrez U.S. Secretary of Commerce Alma Brown and Michael Brown Curt M. Selquist Company Group Chairman and Worldwide Franchise Chairman, Medical Devices & Diagnostics, Johnson & Johnson Dr. Attila Molnar President and Chief Executive Officer, Bayer Corporation H. Fisk Johnson Chairman and Chief Executive Officer, S.C. Johnson & Son, Inc.

Carolyn Kay Brancato Director of The Conference Board Governance Center, was a moderator at the Corporate/ Investor Summit.

Left to right Martin Glynn President and CEO of HSBC Bank, USA Donald Gogel President and CEO David Vidal Research Director, Global Corporate of Clayton, Dubilier & Rice, Inc. Citizenship, The Conference Board At a meeting co-sponsored by The Conference Board and The Week magazine at The Four Seasons restaurant in New York.

8 the conference board 2006 annual report Government (Harvard University), Pfizer, the International Working in collaboration with McKinsey & Company and Business Leaders Forum, and the Global Alliance for Improved KPMG’s Audit Committee Institute, The Conference Board also pub- Nutrition to hold four events as part of the Clinton Global lished The Role of U.S. Corporate Boards in Enterprise Risk Initiative. Themes ranged from responding to natural disasters Management. Results from this study were announced during a to the public, private, and social sectors taking joint action press conference that was held in conjunction with a Directors’ on malnutrition. Institute seminar at The Harvard Club. The research, which includes Avian flu preparedness was also on the agenda. The a broad-based survey of U.S. boards, cites the financial services Conference Board conducted a survey on the issue that garnered and insurance industries as models for well-developed risk-manage- more than 500 corporate responses. An Executive Action report ment programs. outlined how this crisis differs from previous threats. “At the very Both the Governance Center and Directors’ Institute conducted least, companies ought to consider how to continue when work programs outside of the United States this year. Business and gov- practices must be altered to reflect the reality of a changed environ- ernment officials in China hosted the Governance Center at two ment,” the report says. “Meetings, travel, and office environments meetings in Beijing — one convened for the leaders of state-owned can spread infection through an extensive population.” enterprises and one held for the Banking Regulatory Agency. The Directors’ Institute held in-house educational programs for A Leader in Corporate Governance Reliance Industries Limited in India and for the Egyptian Institute During the last year, The Conference Board Governance Center of Directors. These sessions featured a global perspective on cor- and Directors’ Institute elevated their reputations as go-to resources porate governance issues, fiduciary responsibilities of board for business leaders in the United States and their counterparts directors, and similarities and differences in motivations among around the world. One of their reports — Revisiting Stock Market countries for determining global best practices.

“The Conference Board has become the respected source for corporate governance.”

Douglas R. Conant President and CEO, Campbell Soup Company

Short-Termism — was based on a unique consensus achieved Tracking Shifts in Jobs, by leaders of major corporations and the investment community Productivity, and the World Economy at the June 2005 Corporate/Investor Summit convened by The The Conference Board increased its economic data and analysis Conference Board in London and moderated by Dr. Carolyn Kay of the employment market over the last year, including launching Brancato, director of The Conference Board Governance Center the monthly Help-Wanted OnLine Data Series.TM This new series and Directors’ Institute. The report warned about the dangers of sheds light on business demand for labor and supplements the short-term thinking in developing business strategy in the financial long-standing Help-Wanted Advertising Index. The Conference markets. It also called on companies, investors, financial analysts, Board also produced webcasts and special reports on the chang- and fund managers to shift their focus from quarterly earnings ing dynamics of the U.S. workforce, including a candid overview to long-term growth and profitability. published by the The Conference Board Consumer Research Center According to the report, the pressure to meet short-term of how workers view their jobs and how successful companies quarterly earnings numbers can cause undue market volatility. This are seeking to reverse “a commitment crisis.” Research by The may, in turn, cause management to lose sight of its strategic busi- Conference Board on comparative productivity in countries around ness model, which would compromise its global competitiveness the world was presented to central bank governors from some 20 as well as its ability to make investments in such critical areas countries, including the European Central Bank President Jean- as research and development and environmental controls. Claude Trichet and to the Keidanren (the Japanese Federation of

2006 annual report the conference board 9 Economic Organizations). The results of this research found that initiatives for Merck & Co., Inc., says, “As one of the founding mem- the times of extraordinarily high U.S. labor productivity growth bers of the Council on Work Force Diversity in 1993, I have wit- rates are over, at least for now, and that there has been sustained nessed The Conference Board transition from an organization that productivity acceleration in the emerging markets of Central and was learning about diversity and inclusion to one that considers Eastern Europe and Asia. In another new project with global these concepts an integral part of their identity and brand.” impact, the Global Indicators Program launched initiatives to develop leading economic indexes (LEIs) for the European Union Expanding Our Global Reach and China. The LEI program currently produces monthly data for The Prague meeting of the Council on Work Force Diversity was the United States and eight other countries, which collectively just one of the ways The Conference Board has broadened its glob- represent almost two-thirds of the world economy. al presence this year. In China, The Conference Board China Center for Economics and Business hosted seminars that showcased such Making Diversity a Corporate Reality leading academics as Dale Jorgenson, the Samuel W. Morris As part of a research project commissioned by the European University Professor at Harvard University, and Ren Rouen, Beihang Commission’s Directorate General for Employment, Social Affairs, University. In addition to the initial meeting of the The Conference and Equal Opportunities, The Conference Board and Focus Board Asia-Pacific Chief Financial Officers Council at the end of Consultancy, a UK diversity consulting firm, produced a special 2005, The Conference Board supplemented its Asia-Pacific council conference in Brussels on the business case for diversity. This program with conferences, smaller forums, roundtables, and briefings meeting attracted 130 delegates from 25 countries, equally divided on economic trends, outsourcing, and major challenges facing CEOs. among executives, government officials, and leaders of social The Conference Board stepped up its activities in India this sector organizations. Companies presenting at the conference year. At a meeting of The Conference Board Human Resources

“The Conference Board motivates me, inspires me, and encourages me in ways that are beneficial to my whole life.” May Snowden Vice President, Global Diversity, Starbucks

included Adecco, Air Products, Bertelsmann, Cadbury Schweppes, Council of India in Hyderabad, Ramalinga Raju, chairman of Satyam Coco-Mat, Ford, IBM, Lufthansa, Randstad, TNT, and Unilever. A report Computers, described his widely acclaimed model of business released at this event included responses from 900 executives and leadership that relies on balancing good corporate citizenship in-depth case studies of 19 pace-setting firms, including BT, Danfoss, practices with corporate business priorities. In Mumbai, Nandan Deutsche Bank, Deutsche Telecom, Shell, and Volvo. M. Nilekani, CEO, president, and managing director, Infosys Looking at other diversity events in Europe, “Profiting from Technologies, and a Trustee of The Conference Board, addressed Diversity” was the theme this year of the annual European Work-Life participants at the Global Leadership Conference. Adi Godrej, and Diversity Conference in Paris. Keynote speakers included Alain chairman of Godrej Industries, and other leading CEOs and speak- Roberts, global head of key clients and member of the global man- ers from India and other countries discussed the importance of agement board of UBS; David Cornick, vice president of IBM; and developing a global mindset in benchmarking during panels at the Ellen Galinsky, president of the Families and Work Institute. The forum. U.S. Council on Work Force Diversity gathered in Prague to discuss global diversity. Speaking about the council’s development, Deborah Dagit, executive director, diversity and work environment

10 the conference board 2006 annual report “Women in Power: Views from the Top,” a panel co-sponsored by The Conference Board and The Week magazine.

Left to right Carol Kovac General Manager of Healthcare and Life Sciences at IBM Shelly Lazarus Chairman and CEO of Ogilvy & Mather Worldwide Maria Bartiromo Host and Managing Editor of The Wall Street Journal Report, a nationally syndicated television program Catherine Kinney President of The New York Stock Exchange Zhang Xin co-CEO of Suzy Welch co-author with her husband, Jack Welch, of the bestseller SOHO China, who has been Winning, and a former editor of Harvard Business Review globally recognized as one of China’s major business entrepreneurs, spoke at a meeting on doing business in China.

Ted Childs Vice President, Global Workforce Diversity, IBM, and a member of the Council on Stephen M. Ward Work Force Diversity, addressed President and CEO of The Conference Board Women in Lenovo Leadership Conference.

Gail Fosler (right) Executive Vice President and Chief Economist, The Conference Board, delivered a global economic outlook at Dow Jones & Co. headquarters in New York. The meeting was covered by financial journalists and foreign correspondents.

2006 annual report the conference board 11 Trustees meeting in Copenhagen

Left to right Michael Lilius President and CEO, Fortum Corporation Hutham S. Olayan President and CEO, Olayan America Corporation “Can Good Governance Stop the Scandals?” a panel Alan M. Dachs President and CEO, co-hosted by The Conference Board and The Week magazine. Fremont Group, L.L.C. Nandan M. Nilekani CEO, President, and Left to right llp Managing Director, Infosys Technologies Ltd. Samuel A. DiPiazza Jr. CEO, PricewaterhouseCoopers , and Chairman, Board of Trustees, The Conference Board John Bogle Founder and CEO of The Vanguard Group Jack Ehnes CEO of California State Teachers’ Retirement System

Left to right Jordi Gual Deputy Director General of La Caixa Antonio Garrido-Lestache Director of Associate Service for Spain and Portugal, The Conference Board Bart van Ark Director of International Economic Research, The Conference Board Luis Lada President of Telefónica At a meeting in Madrid on international productivity trends. Senior executives from The Conference Board Advisory Council on Human Resources Management and the Council of Human Resources Executives at the U.S. Military Academy at West Point.

12 the conference board 2006 annual report A growing profile in Europe include Global Impact, Swiss Reinsurance Company, GlaxoSmith- This year, The Conference Board created plans to expand its Kline, The Coca-Cola Company, Philip Morris, and Shell. European operations, with the aim of bringing its franchise in the region up to the level of its U.S. operations. Executive vice Leadership Lessons from the Military president and chief economist Gail Fosler conducted a series of The Conference Board continued to increase and strengthen its economic briefings for senior business executives throughout the experiential leadership programs for senior business executives. region, including presentations in Brussels, Frankfurt, Helsinki, Designed for CEOs and other senior executives from leading Madrid, Munich, and Stockholm. She also addressed the second- companies, these special offerings show how the strategies and annual Sustainability Forum in Brussels on how global values will tactics of generals in historic battles, including actions taken at impact business practices around the world. Normandy, France, and Gettysburg, Pennsylvania, can be applied to In Paris, Fosler was part of an annual business briefing held achieving success in today’s business environment. At the fourth- by The Conference Board Europe at the Chamber of Commerce annual Investment in America Forum at the U.S. Military Academy and Industry. At this event, she noted that the current investment at West Point, which was co-hosted with the U.S. Army and the boom, especially in the United States, is not supported by a strong Leader to Leader Institute, executives from Credit Suisse, Skanska, consumer sector. The briefing also featured a presentation by U.S. HCA Corporation, Boston Consulting Group, and Texas Industries Ambassador Craig Stapleton on American political priorities for discussed pressing business issues with senior-level Army officers 2006. Others presenters included Daniel Dewavrin, chairman of and social sector CEOs. the Union des Industries et Métiers de la Métallurgie, France, and Edmond Alphandéry, former minister and current chairman of the supervisory board, CNP Assurances.

“The Conference Board has saved us many millions of dollars. I would certainly recommend it.” John Fitzgerald Director of Human Resources and Benefits, Sequa Corporation

Finding Solutions Together: Councils Link the Best in Business The Unique Value of Research Working Groups The thriving council program attracted senior executives from The research working group program was also expanded and virtually every function and business area. Over 200 council events enhanced in the past year. In these groups, The Conference Board were held, which drew more than 2,500 executives. There were works with its members to develop relevant research that address- several innovations to councils this year. The Contributions Council es their current business needs. The front-line executives in these instituted a website to record companies’ responses to the damage forums serve as research advisors to ensure actionable results, an caused by hurricanes Katrina and Rita. The Global Performance approach that distinguishes our working groups. Groups convened Excellence Council, with membership equally divided between the in the past year developed new strategies for employee engage- United States and Europe, initiated a series of web briefings to ment, offshoring risks, consumer-driven healthcare, strategic work- enable council members to exchange information without meeting force planning, complying with Sarbanes-Oxley legislation, and in person. The European Council on Purchasing and European human capital measurement. Council on e-Procurement held a joint meeting in India that gave The Conference Board also launched its first European executives from member companies an opportunity to visit rapidly research working group, which will study corporate responses growing Indian information technology firms. to humanitarian disasters and help companies learn how to become better partners with relief organizations. Corporate members

2006 annual report the conference board 13 The Conference Board Webcast Advantage successful conferences this year was the Employee Health Care After a highly successful first year, The Conference Board webcast Conference, which was held in both New York and San Diego. program exceeded expectations in its second year, delivering timely, These meetings emphasized the importance of building a culture interactive online meetings on economic and management topics. of health at organizations while juggling benefit costs and talent Compliance and ethics programs, outsourcing, Sarbanes-Oxley, management issues, and featured top executives from Aetna, Inc., human capital metrics, the economics of disasters, corporate BellSouth Corporation, DHL Express, and Gap Inc. security, and managing a mature workforce were just a few of the Co-chaired by Paul A. Volcker, former chairman of the Board of major corporate concerns covered. The Conference Board also Governors of the Federal Reserve System, and François Cornélis, launched a new webcast series in Europe, providing exclusive vice chairman of the Executive Committee of Total, The Conference research findings on how companies are identifying and trying Board Trustees’ and Global Advisory Council meeting in to eliminate microinequities, building leadership competencies and Copenhagen included dialogues by world business leaders on models, managing change, profiting from shared services manage- “What Constitutes a Market Economy?” and “Does Russia Meet the ment, and executing effective humanitarian relief programs in the Test?” Discussions also covered energy security and the global wake of natural disasters. economic outlook. At the Trustees’ and Members’ dinner, keynote speaker Ulrik Federspiel, the Secretary of State for Foreign Affairs Conferences and Special Events of Denmark, examined the changing business environment in a Provided Unique Access to Insights world that is rapidly being globalized. Conferences, which bring together leaders from throughout the Paul Volcker was also the featured speaker at The Conference world to exchange ideas and experiences, were the first benefit Board Annual Meeting and dinner in New York City. Reflecting on

“I can’t think of another international business organization that has the unique nonpartisan ability to look at issues the way they really are.” Nandan Nilekani CEO, President, and Managing Director, Infosys

The Conference Board offered members in 1916. In 2005-2006, his experiences as chairman of the United Nations inquiry into the the conference program had a number of important new offerings, Iraqi Oil for Food Program, Volcker said that the time was ripe to including its first corporate real estate conference, which explored reform the United Nations and that solving the world’s problems the relationship between global commerce and the growing move- requires a multilateral approach. ment toward sustainable real estate practices. By popular demand, As these offerings demonstrate, The Conference Board is The Conference Board’s annual business ethics conference went poised to continue an unmatched variety of quality programs for bi-coastal this year: The New York conference featured Andrew executives around the world as it heads toward its centennial. Liveris, chairman and CEO of Dow Chemical, while Jim McNerney, CEO of Boeing, addressed the La Jolla conference. The annual Diversity Conferences held in New York and Chicago continued to be trailblazing events. More than 270 top diversity and human resources executives attended these programs. One of the most

14 the conference board 2006 annual report Trustees meeting in Copenhagen

Left to right Samuel C. Scott III Chairman, President, and CEO, Corn Products International, Inc. Douglas R. Conant President and CEO, Campbell Soup Company, and Vice Chairman of the Board of Trustees, The Conference Board Washington SyCip Founder, The SGV Group Andrew Liveris Chairman, President, and CEO, The Dow Chemical Company, was a keynote speaker at The Conference Board Ethics and Compliance Conference.

Susanne Lyons Executive Vice President and Chief Marketing Officer, Visa USA, provided insights on building and sustaining a world-class brand to participants at The Conference Board Marketing Conference. Paul Volcker was the keynote speaker at The Conference Board 2005 Annual Meeting. Volcker is the former Chairman of the Board of Governors of the Federal Reserve System and Chairman of the United Nations inquiry into the Iraqi Oil for Food Program.

2006 annual report the conference board 15 the conference board Historical Overview 90 Years of Commitment

An Organization Born of Crisis cooperation and knowledge sharing among businesses, which had The Conference Board is an unlikely success story. Established during been notoriously secretive about even their most routine business a prolonged period of economic turmoil, The Conference Board began practices. On May 5, 1916, in the Hotel Gramatan in Bronxville, New life as a grand idea, not an institution. Prior to its founding, three trag- York, the National Industrial Conference Board (which changed its ic events had led to widespread public condemnation of business: name to The Conference Board in 1970) became an official entity, 1910 A dynamite bomb rips through the Los Angeles Times’ plant, with Alexander acting as its managing director (and later its first killing 20 workers and injuring many more. president) and Fish as the organization’s first chairman. 1911 A fire at the Triangle Shirtwaist Company in New York City kills 146 workers, mostly young women. 1916 Starting Fresh in Boston 1914 In Colorado, a long-running strike and nonstop violence With an initial budget of $100,000 and a small office in Boston, between armed miners and militia hired by the Colorado The Conference Board was finally open for business. One of the Fuel and Iron Company leads to “The Ludlow Massacre,” newly minted organization’s first research projects focused on work- during which more than 25 people die. ers’ compensation laws and their impact on business, employee One of the business leaders most concerned about these compensation, and labor strikes and boycotts. Just before the United events was Magnus Alexander, a prominent executive at General States entered World War I in 1917, President Woodrow Wilson Electric. Alexander and Frederick Fish, a Boston attorney who had organized a War Labor Board. As part of its efforts, the War Labor been president of AT&T, began bringing together business and trade Board asked The Conference Board to bring together business association leaders to discuss the strained business climate and leaders to examine America’s ability to manufacture essential goods what might be done to alleviate frictions. As economic tensions and services during the war. Among the major recommendations surged, Alexander and Fish convened a series of crisis meetings from this group was a call for a special board — with equal in 1915 and 1916. At these gatherings, Alexander called for greater representation from employers, employees, and the government —

The Conference Board Milestones

When The Conference Board was initially formed in 1916, Magnus 1918 Conducts research 1924 Alexander described the new organization’s role as being that of both on working women and safety Incorporates as a private, “a clearing house for information [and] a forum for constructive in the workplace nonprofit institution discussion” on the vital business issues of his day. During the last 90 1916 The Conference Board 1923 years, we have expanded our programs to meet, or even anticipate, 1919 Establishes the is established Attracts 282 delegates the needs of a rapidly changing and increasingly globalized business U.S. Cost of Living Index to a National Immigration environment. By doing so, we have helped our members find better 1917 Conference solutions for their individual needs and better serve the societies in Publishes first report, 1920 Conducts research which they operate. Workmen’s Compensation Acts on eight-hour workday

World War I 1914-1918

1924 1910 1911 Triangle Shirtwaist 1915 First transcontinental 1920 Company fire kills 146 workers telephone call Congress passes the National 1919 Immigration Act, which 1916 Passage of the First U.S. Supreme Court orders severely limits immigration Rural Credits Act, which transatlantic breakup of Standard Oil 1913 Passage of the provides aid to farmers flight 1920 Federal Reserve Act First meeting of League of Nations 1914 1910 Los Angeles Times Establishment of the Federal Trade Commission 19th Amendment gives plant bombing kills 20 workers women the right to vote The Ludlow Massacre

Period of increasing business regulation Businesses flourish and create an and rising labor unrest. unprecedented consumer market.

16 the conference board 2006 annual report to resolve labor disputes. The War Labor Board eventually agreed to remained. When Alexander died in 1932, Virgil Jordan, a noted all of the recommendations. In 1918, The Conference Board created economist and a prolific writer and public speaker, was appointed the first U.S. Cost of Living Index, which corporations instantly his successor. At the time, many business leaders were questioning began using in planning and strategy sessions. whether the economic analyses being used by the government were credible. To ensure a steady supply of accurate economic data, 1920s The Conference Board Moves to New York Jordan established a Bureau of Economic Audit and Control, which Seeking a broader platform and a greater role on the national stage, produced a wide range of studies on unemployment, pension plans, The Conference Board moved from Boston to New York City in 1920. corporate healthcare policies, and other issues during the 1930s. In that year, it also became an incorporated, not-for-profit organiza- tion. Over the course of the decade, The Conference Board produced 1940s Helping the War Effort a series of major studies on America’s deteriorating agricultural During World War II, The Conference Board focused on what companies conditions, the cost of government, and the fiscal health of state were doing, or could do, to aid the war effort. An ongoing series of governments. At the request of its members, the organization meetings were held between business leaders and high-level U.S. gov- also created special studies that focused on labor and management ernment officials, with discussions covering everything from the differences in France, Italy, Great Britain, and, later, Germany. production of goods and services and wartime pricing policies to con- tract negotiations between business and government. In1944, a 1930s Surviving during the Great Depression Division of Business Practices was created to oversee all research into The stock market collapse of 1929, which soon triggered a global management practices and policies. Jordan resigned as president in depression, hit The Conference Board almost immediately. Staff 1948, although he continued to be an advisor to The Conference Board and salaries were reduced, as were working hours for those who until 1963. John Sinclair, the former president and deputy governor of the Federal Reserve Bank of Philadelphia, became president in 1949.

Conducts over 187 studies on topics ranging from Research focuses on the downward spiral of international immigration to the conservation of natural resources. trade and the precarious position of financial institutions.

1937 Publishes first comprehensive 1928 Opens conferences 1932 Establishes group to 1935 Creates Bureau of study of Personnel Practices Governing to the public study business recovery Economic Audit and Control Factory and Office Administration 1926 Establishes the 1936 Advisory Council of Human 1933 Initiates Foreign Affairs, Admits Amalgamated Resources Executives, the a series on the worldwide Clothing Workers of America, first council effects of the depression its first labor union member 1938 Inauguration of the Economic Advisory Council Great Depression WW II begins 1930 1934 Congress creates 1928 Amelia Earhart is the Securities and Exchange first woman to fly across Commission 1938 Congress passes the Atlantic 1935 the Fair Labor Standards 1925 Broadcast of Social Security Act, establishing a first television picture 1929 Act becomes law Stock market crashes national minimum wage 1933 Roosevelt declares over six days in October and codifying the eight- four-day bank holiday and November hour workday

President Roosevelt inaugurates the “New Deal” to provide relief from the effects of the Great Depression.

2006 annual report the conference board 17 1950s Reaching Out to Europe 1960s Creating Jobs, Encouraging Social When The Conference Board celebrated its 35th birthday in 1951, Responsibility, and Building a Stronger Economy its annual revenue topped $1 million for the first time and it moved Sinclair stepped down as president in 1962. His successor was into a larger office to accommodate its more than 200 employees. H. Bruce Palmer, the president of Mutual Benefit Life Insurance With the United States facing a war in Korea, The Conference Board Company. A founding member of several nonprofit organizations, Council on Mobilization Planning began producing studies, reports, Palmer was a leading advocate of “social responsibility” and quickly and surveys on critical business issues during wartime. It also increased The Conference Board’s involvement in the public affairs issued a study on how business and government could protect confi- arena. The Ford Foundation gave The Conference Board a grant to dential data in the event of a nuclear war. Throughout the decade, produce a major study on company experiences in hiring African- The Conference Board began sponsoring major events outside of the American workers, which suggested a more determined effort by United States. In 1954, The Conference Board inaugurated an office companies was needed if more minorities were to find jobs. The in Montreal, which today is an independent but affiliated organization Conference Board also began publishing its Help-Wanted Advertising based in Ottawa. In 1959, the first CEO-level meeting held outside Index, which continues to be an effective barometer of job demand the United States was convened in Torquay, England. Some 40 chief in 52 major cities in the United States. In 1965, The Conference Board executives and company presidents from the United States, the was commissioned by the U.S. Treasury Department to study the United Kingdom, and Canada met to examine economic prospects. country’s controversial business depreciation guidelines. After pro- It was an instant success, spawning a similar meeting in Versailles, ducing a study pinpointing strengths and weaknesses in the guide- which linked business leaders from Belgium, Canada, France, the lines, President Lyndon Johnson addressed a meeting held by Netherlands, Sweden, Switzerland, the United States, and West The Conference Board in Washington, D.C., announcing that the study Germany. had persuaded him to make major changes in the nation’s business depreciation policies. As the 1960s came to a close, The Conference

Creates advisory councils to foster the exchange of Research focuses on the impact of the consumer information between businesses with defense contracts economy on price trends, buying behavior, and the and government agencies. television industry.

1945 First report in Studies in Business 1951 The Conference Board 1959 Economics, a series on the restoration of Help-Wanted Advertising Index 1940 Begins tracking directors’ the economic system First major meeting is launched outside U.S. in Torquay, UK compensation and corporate 1944 Publishes Employment contributions 1948 Publishes The Social Security First report on of Handicapped Persons 1954 Almanac, which covers the U.S. and Opens Montreal office data processing 1943 Brings consulting groups other countries and begins enrolling associates together as the Advisory Council on from outside the U.S. Defense and Reconstruction

World War II 1939-45

1940 1950 1955 Formation 1944 Passage of 1947 Marshall Plan of the AFL-CIO GI Bill of Rights Act 1950-1951 First transistor Introduction of first commercial mainframe 1957 Launch of 1941 The U.S. computers the Sputnik satellite enters WW II 1948 GATT agreement is signed by 23 countries 1954 Foundation 1949 Creation of NATO of SEATO

America’s entry into WWII leads to the near Postwar, the U.S. enters a period of prosperity elimination of unemployment and opens new and experiences a sea change in living standards opportunities for women in the workplace and the consumption of consumer goods

18 the conference board 2006 annual report Board, with financial support from Life magazine, began producing A formed in the region, bringing together leading European executives Graphic Guide to Consumer Markets, an annual chartbook on consumer on a regular basis to share ideas and insights. (Today, The Conference spending trends. Board Europe oversees a network of councils in Europe, India, and the Middle East.) Trowbridge stepped aside as president of 1970s Forging Bonds between Business and Government The Conference Board in 1976. Kenneth A. Randall, a former head Palmer, who resigned from The Conference Board in 1970, was of the Federal Deposit Insurance Corporation and chairman of the board succeeded by Alexander B. Trowbridge, former U.S. Secretary of and CEO of Virginia Bankshares Inc., was named the new president. Commerce under President Johnson and, before that, a senior execu- tive with Esso Standard Oil. Trowbridge built strong relationships 1980s Restructuring, Downsizing, and Another Market Crash with noted business and government leaders and The Conference In 1981, James T. Mills, president and CEO of the Sperry Hutchinson Board soon began producing studies that helped companies under- Company, took over as president of The Conference Board and set stand and deal with a rising tide of environmental legislation. With out to upgrade its technological infrastructure and make its extensive The Conference Board gaining stature for its expertise in this area, research program more responsive to the needs of its corporate the National Commission on Water Quality soon asked the organiza- members. Significant research was published on businesses’ growing tion to convene a meeting of business and government leaders to public-affairs activities, shifts in monetary policy, and best practices explore the pros and cons of water quality laws across America. in marketing, finance, and research and development. As corporate President Gerald Ford addressed members of The Conference Board restructuring, cost-cutting, and mergers and acquisitions swept at a meeting in Washington in 1976, stressing the need for a strong through the business world in the mid-1980s, The Conference Board defense and encouraged the bolstering of relationships between began issuing a series of reports on the processes companies were business and the government. The Conference Board established an employing to become more competitive. office in Brussels in 1977, and a growing number of councils were

Extension of public affairs research on corporate contributions, business and government relations, In addition to added management and marketing programs, and community affairs. there are new forums for business and government exchanges.

1965 Based on The Conference Board research, President 1972 The results of a survey conducted 1961 President Kennedy Johnson announces major changes in the nation’s depreciation by The Conference Board on industry addresses a special meeting 1977 practices expenditures for water pollution abatement Opens are included in an EPA report Brussels office 1966 Study on companies’ efforts to increase 1960 Publishes A Graphic their employment of African-Americans Guide to Consumer Markets, 1976 Establishes The Conference 1967 in collaboration with Life Creates The Conference Board Board CEO Confidence Index magazine Consumer Confidence Index

Introduction of Personal Computer

1960 1964 The Civil Rights Act becomes law 1970 1976 Grameen Bank First successful heart transplant 1970 The first Earth Day is celebrated established 1961 Construction and the U.S. Environmental Protection of the Berlin Wall Agency (EPA) is founded 1963 Martin Luther 1973 An embargo on oil shipments to King, Jr., addresses the 1969 the U.S. and Western Europe creates March on Washington First man on moon 1960 gasoline shortages and doubles prices First working laser Woodstock

Increasing inflation, urban strife, rising unemployment, and Economies are wracked by stagflation, recessions, the Vietnam War place pressures on the world economies. rising unemployment, and a series of energy crises.

2006 annual report the conference board 19 When Mills stepped down in 1988, Preston Townley, dean of When Townley died of a heart attack in 1994, Jack V. Wirts the Carlson School of Management at the University of Minnesota became acting president and CEO of The Conference Board. During and a former top manager at General Mills, was appointed his succes- the next year, the organization stepped up its activities in Europe sor. Townley speedily moved to identify critical business issues and and Asia. It also signed its first working agreement in China after put experienced specialists in place at The Conference Board to Wirts met with leading Chinese government and business leaders. study and report on them. He also oversaw the reorganization of The Other joint ventures in Australia, Hong Kong, Europe, and Mexico Conference Board around six major themes: business and educa- followed, as well as alliances in India and Taiwan. In an unprecedented tion, corporate business practices, economics, managing development, the U.S. Department of Commerce selected The for global growth, quality, and workforce management. Conference Board to produce and distribute the U.S. leading eco- nomic indicator series. This was the first time a U.S. Government 1990s Total Quality, Stability, and an Economic Coup agency entrusted a major economic series to a private organization. Townley broadened the offerings of The Conference Board, including (Today, The Conference Board produces indicators for eight other making it a major player in the drive for total quality management nations as well.) In October 1995, The Conference Board named (TQM). Building on its Quality Council — a group of executives in Richard E. Cavanagh, a seasoned executive with broad business, charge of their companies’ TQM programs — The Conference Board government, and academic credentials, as its ninth president. Before began holding annual quality conferences. The success of the being executive dean of Harvard’s John F. Kennedy School of Quality Council was also reflective of the growing importance of Government for nine years, Cavanagh was a partner with McKinsey the overall council program, which had become the fastest-growing and Company. component of the organization in both the United States and Europe. The conference program was also enlivened and expanded, with 2000s Going Global and Restoring Trust more events being sponsored by notable outside organizations. One of Cavanagh’s early strategic thrusts was to continue expanding Townley also added more research staff to provide what he called the globalization of not only the organization’s research and meeting “more market-driven” reports, surveys, and meetings. programs, but its governing body as well. In 2000, Lord Marshall of Knightsbridge, chairman of British Airways, became chairman of

Restructures activities around business practices, economics, Studies the growth of business education, global growth (now having associate members from and education partnerships. over 50 countries), management, and quality.

1990 The Conference Board 1988 First annual Business Total Quality Management Center Ethics Conference established 1993 1980 Launches research on the 1986 Article in Across 1989 President George Bush The Conference practices of boards of directors The Board on eldercare writes The Conference Board Board Governance receives national attention that its pursuit of excellence in Center established education “has earned the gratitude of all Americans”

WorldS & War L Crisis I 1914-1918 Rise of the Internet

1994 1980 1988 Fall of the Berlin Wall 1990 1985 In the largest corporate The North American merger at that time, GE acquires Drexel Burnham Lambert Free Trade Agreement 1981 Launch of space the RCA Corporation pays $650 million penalty for (NAFTA) goes into effect shuttle Columbia insider trading Nabisco merges with Standard Brands 1984 AT&T operations split 1987 On “Black Monday,” the into seven independent companies NY Stock Exchange experiences a record one-day decline

U.S. economic growth begins to pick up again, during a decade characterized by restructurings, cost cutting, and high-profile mergers.

20 the conference board 2006 annual report the Board of Trustees at The Conference Board, the first chairman of the world and is fast becoming a major resource on the Chinese the organization based outside the United States. The Conference economy. The Conference Board Middle East Business Leaders Board economics program produced an expanded series of econom- Council, launched in 1999, now brings together top executives from ic studies and forecasts and held a rising number of briefings around this area to meet with peers based in other regions. the world. It also launched a rich mix of new economic barometers, including an ongoing series to determine how satisfied consumers The Future are with their Internet experiences, and initiated a monthly measure The Conference Board’s impressive legacy as one of the world’s of new jobs being offered online in the United States. To honor com- foremost research and business membership organizations has panies for outstanding citizenship, The Conference Board designed given it a strong position for future growth. Its global reputation in the Ron Brown Award for Corporate Leadership, the only presidential economic forecasting, productivity, and job creation; its widely award recognizing extraordinary leadership programs. The first win- watched economic barometers, which often move financial markets; ners, IBM and Levi Strauss, were announced by President Bill and its ever-expanding reports on timely economic issues have Clinton in 1998 at the White House. made it a leader in the field. Moreover, its pathfinding role in the In the summer of 2002, after an epidemic of business scandals, areas of governance and compliance, diversity, leadership develop- Cavanagh convened The Conference Board Commission on Public ment, and managing a fast-changing workforce ensure that it will Trust and Private Enterprise, a blue-ribbon panel of respected leaders stay out in front on these vital business issues, both in the United from both the private and public sector. Many of the Commission’s States and in countries around the world. New strategic programs recommendations have been voluntarily adopted by leading compa- in China and India, as well as an expanding role in Europe, are just a nies and are considered best practices in corporate governance few of the ways that The Conference Board is extending its global today. The Conference Board has also established a strong and reach. While circumstances and needs will certainly change in the growing presence in China and India, and now provides councils, next 90 years, The Conference Board will continue to anticipate briefings, and conferences to over 100 members in the Asia-Pacific major economic and business shifts. region. The Conference Board China Center for Economics and Business has the support of major multinational firms throughout

Takes the lead in corporate governance and diversity, while the economics program begins a series of innovative measures of online activities.

1998 Hong Kong office opens 2003 The Conference Board 1997 Directors’ Institute founded Creates Ron Brown Award 2001 Co-sponsors 1995 NAFTA for Corporate Leadership the Sino-U.S. Economic The Conference Board Consumer Conference in Forms partnership with Groningen Forum Internet Barometer launched Mexico Growth and Development Centre 2002 The Conference Board 2005 Creates The Conference 1996 1999 Assumes control Designs business cycle Commission on Public Trust and Board China Center for Economics of the U.S. Leading indicators for 8 nations that account Private Enterprise established and Business, based in Beijing Economic Indicators for two-thirds of global GDP and New York

2000 2002 Sarbanes-Oxley Act passed 1995 The World Trade Organization is established The euro becomes legal tender in 12 European countries, creating the largest monetary union in history

The information technology revolution ushers Dot-com bubble bursts and, starting with in the “New Economy,” causing rapid growth in Enron, there are a series of business scandals. Western stock markets.

2006 annual report the conference board 21 the conference board Annual Essay “Innovate or Die” Lessons from the Groundbreakers Who Changed America by sir harold evans

hen I recently conducted a Google search passion to make sure, absolutely positively sure, for “American chief executives and innova- that the parcels are truly delivered overnight. As Smith Wtion,” I received 9,850,000 entries in just says, “You’re delivering someone’s pacemaker, 40 seconds. By now, it may be up to 10 million or chemotherapy treatment for cancer drugs, the part more. Obviously, no such search was possible when that keeps the F-18s flying, or the legal brief that The Conference Board was established in 1916. Back decides the case.”1 His efficiency drives have not then, I would have had to dedicate the rest of my life been allowed to obscure the founding vision. to discovering a fraction of what is now instantly on offer via the Internet, which is just one of the innova- The Potential Downside of a tions undreamt of then that are now in the tissue of Concentration on Efficiency our everyday lives. Others include e-mail, antibiotics, Michael Dell, who conceived of mass customization television, statewide banking, FM radio, personal of personal computers through direct selling to con- computers, the uplift brassiere, helicopters, instant sumers — especially businesses and just-in-time cameras, cell phones, synthetic fibers, radio tuners, manufacturing — has been every bit as innovative as MRI scanners, scheduled airmail, transatlantic Fred Smith. Because of the company’s consumer flights, fish fingers, microwave ovens, transistorized focus, Dell’s customers have felt they have an almost hearing aids, artificial insulin, lasers, jet planes — personal relationship with him. This relationship was not to mention the introduction of container shipping hurt, however, when the company hired cheaper tem- that effectively initiated globalization. porary workers for its five call centers rather than Another Google search indicates that there has continuing with full-time staff imbued with the founder’s

Sir Harold Evans is the author of also been a subtle shift in American business thinking. sense of mission. Ro Parra, a senior vice president They Made America: From the Steam When “innovation” is replaced with “efficiency” in at Dell, identified call-center turnover rates as high as Engine to the Search Engine: Two the search string, only half as many entries appear. 300 percent as one cause behind flattening sales. Centuries of Innovators (Little, Brown) and editor of the WGBH television Efficiency, once the be-all and end-all, is no longer He told the Wall Street Journal, “We were very efficient series of the same title. He was editor considered enough for survival in the world economy. and we made those decisions that work with the of The Sunday Times of London and The Times, and chairman of the F. Mark Gumz, CEO of Olympus America, keeps short term, but they were really damaging to us over Sunday Times executive; in the United telling all of his staff (and not just the top managers), the long term.”2 Such openness and contrition States, he was editorial director of U.S. News and World Report, founder “Innovate or die.” To be sure, efficiency is essential, indicates that Dell will soon regain its momentum. of Condé Nast Traveler magazine, and but, in a global marketplace, efficiency — and the cost- Not all businesses are able to regroup after president and publisher of Random House. He is a contributing editor of cutting associated with it — may not be enough. So such an event. Tony Ridder, for example, is no longer U.S. News and World Report and editor our future will more likely depend on groundbreaking running Knight Ridder, an organization whose commit- at large of The Week magazine. In innovation. Yes, we must implement and develop ment to editorial excellence and innovations in news- 2004, he was knighted by Queen Elizabeth for his services to journalism. efficiency, but without forgetting the animating vision paper technology helped it become America’s that created the initial innovation. The mountain second-largest newspaper group. When Ridder told The Annual Essay ranges of innovation are littered with the skeletons the editorial staffs his highest priority was increasing Each year, The Conference Board publishes in its Annual Report an of the great corporations that lost sight of the sum- the profit margins from 19 percent to 21 percent, he original and timely commentary by mit they set out to conquer. Jack Welch’s law applies was viewed as introducing a morale-lowering change a leading economic or management thought leader. Past essayists have — when the rate of change in a company becomes in the corporate culture at the expense of a commit- included Nobel prize winner Douglass slower than the rate of change outside, the end is in ment to quality journalism. This perception was no C. North, Warren Bennis, Jim Collins, Peter Drucker, Dale Jorgenson, and sight. doubt unfair, given his need to reconcile costs with Paul Volcker. Federal Express is one of the organizations that the downturn in newspaper advertising. In any event, has managed to keep its focus. For three decades, setting financial targets invited a financial judgment, Fred Smith has inspired his organization with his

1 Harold Evans, with Gail Buckland and David Lefer, They Made America: From the Steam Engine to the Search Engine: Two Centuries of Innovators, (New York: Little Brown, 2004), p. 643. 2 Christopher Lawton, “Consumer Demand, Laptop Growth Leave Dell Behind,” Wall Street Journal, August 30, 2006.

22 the conference board 2006 annual report and shareholder pressure led to Knight Ridder’s occurred to me.… Wouldn’t it be great if my trailer sale to the McClatchy Company. could simply be lifted up and placed on the ship with- out its contents being touched?”3 It took 20 years Defining the Values of Innovators for McLean to move from this initial inspiration to In writing my recent book They Made America, organizing the voyage of Ideal X, his first container I spent five years trying to identify and describe the ship, from Port Newark, New Jersey, on April 26, 1956. great change-makers in the business history of Why didn’t anyone else see what McLean saw? the United States. As a result of my research, it Here is a hallmark of innovation – the imaginative became clear that America’s progress over the past association of ideas previously considered separate: two centuries — from the steam engine to the search the cell phone that takes stills and video and plays engine — has been very much related to the values music. Auctions and yard sales had been around a of the innovators. Wealth was not at the center of long time when Pierre Omidyar put them together their lives. To be sure, none of them sought penury on the web to create eBay. Jean Nidetch stitched in the service of the public, but immersion in their together the communal support idea of Alcoholics lives suggests that making money was not a sustain- Anonymous with a diet invented by the New York City ing motivation. Something else drove them — intellectu- Department of Health to create Weight Watchers.

Wealth was not at the center of innovators’ lives. To be sure, none of them sought penury in the service of the public, but immersion in their lives suggests that making money was not a sustaining motivation. Something else drove them — intellectual curiosity, vanity, genuine altruism.

al curiosity, vanity, genuine altruism — and then the Ida Rosenthal did not invent the brassiere or even money followed. I see these primary innovators the famous Maidenform “I dreamed” campaign, but as democratizers: Henry Ford, Amadeo Giannini, she put all the pieces together in production and George Eastman, and Pierre Omidyar come to mind, marketing so that her husband’s invention reached but there are lesser-known people like Raymond millions of women. Henry Ford summed up this Smith (founder of the first family of gambling in aspect of innovation with admirable candor when he Nevada and the F.W. Woolworth of chance) and said, “I invented nothing new. I simply assembled Martha Matilda Harper (creator of retail franchising) into a car the discoveries of other men behind whom who deserve to be better known. were centuries of work.” As the preceding list suggests, the individual dominates the story of American innovation. The Business and Innovation: research departments of major corporations (e.g., A Sometimes Uneasy Relationship Bell Labs and Dupont) have not been unproductive, A quick survey of those Google hits reveals that there but can anyone have had more impact on our world is some confusion about the true definition of innova- than Malcom McLean? In 1937, McLean was a 23- tion. Much of what are described as innovations are year-old trucker who became frustrated after spend- really techniques of managing an existing business or ing a day waiting on a noisy pier in Hoboken, New improving it at the margins. These may be very useful, Jersey, to have his cotton bales unloaded from his but they have nothing to do with innovation or change. truck, loaded onto a cargo ship, and then unloaded Instead of parsing how the concept of innovation has and loaded again at the other end. Recalling that changed from its initial conception in the 17th century frustrating experience, McLean said, “The thought to the refinements of modern commentators like

3 Evans et al., They Made America, p. 482.

2006 annual report the conference board 23 Peter Drucker, Clayton Christiansen, and Eric von graph Gates keeps in his office. Gates is brilliant all Hippel, I would argue we should reserve the terms right, but not at all in the way that Edison was bril- “innovation” and “innovators” for real change and liant. The criteria that elevate Bill Gates into the ranks not confuse it with different functions. While there is of innovators are not in the realm of science and a fairly common acceptance of Joseph Schumpeter’s technology but in his genius for business organization definition of innovation as entrepreneurship, the real- and developing from scratch a standard-setting mass ity is that entrepreneurship, the assumption of risk, market company. He did not invent the operating may not be innovative at all. You assume risk if you system he licensed to IBM for its personal computer open a new auto dealership, but you are not innova- — he bought it from another company. tive unless you are the first. The true Edison of software is unquestionably Some entrepreneurs have even been the enemy Gary Kildall, who, entirely out of his own head and of innovation. General David Sarnoff, the black-belt without the backing of a research lab or anyone, bureaucrat who was the head of RCA and was heavily wrote the first language for a microcomputer operating invested in making AM radios, was a classic entrepre- system and the first floppy disk operating system. neur, but he was also the relentless and unscrupulous Kildall did it, moreover, in such a manner that program- foe of the introduction of the innovation of FM radio. mers were no longer restricted by hardware compati- Even though he had the right of first refusal of Edwin bility. In Kildall’s system, anybody’s application could Howard Armstrong’s invention, he did his best to run on anybody else’s software. It was the genesis sabotage Armstrong’s efforts to broadcast in this of the third-party software industry. new medium. As a result, Armstrong, the inventor But, while the breakthrough was Kildall’s, Gates of so much in the technology of transmitting sound, was able to see more sharply how a deal with IBM was forced to start his own company and began could be the foundation of a whole new industry. He broadcasting music flawlessly from WQXR in New understood better than IBM the importance of own- York on July 18, 1939. (Interestingly, the 425-foot ing its PC operating system. He also figured out how radio tower he built in Alpine, New Jersey, for WQXR to set up a tollbooth to computer technology, collect- was the salvation of NBC, and many others, when ing half of every dollar generated by the PC industry. the antenna on top of the World Trade Center was In all these respects, the proper parallel for Gates is destroyed in the September 11 attacks.) not Edison but John D. Rockefeller, who controlled Sarnoff also sought to stymie Philo T. 90 percent of the nation’s oil refining capacity by Farnsworth’s attempts to make the most of his inven- 1879, just as Microsoft Windows controls 90 percent tion of electronic television, although, in the end, he of all personal computers. had to pay Farnsworth for his groundbreaking patent. Later on, Sarnoff did become a genuine promoter of The Entrepreneur as Innovator innovation, pioneering a system of color TVs compati- Innovation in these areas of organization does not ble with black and white that defeated the non-com- have the drama of Edison watching a filament fight patible electromechanical system pushed by Bill Paley for its life or Edwin Land finding himself split in two of CBS. But he was also a promoter of a number of in the Polaroid color prints from his first experi- myths about himself, including claiming credit as ments with the SX-70. Like Bill Gates, Juan Trippe, “the father” of television. When innovators such chairman of Pan American, was not an inventor. as Armstrong or Farnsworth are overlooked or their In the early 1950s, the activities in Pan Am’s Park innovations misrepresented, it is more than a personal Avenue offices may have seemed boring when com- injustice; it is also a distortion of the essence of inno- pared with the struggle of Pratt & Whitney engineers vation and the essential qualities of the innovator. to secretly create the monster J75 jet engine for the U.S. Air Force. But appearances can be deceiving. For Change Doesn’t Always Trippe was determined to make cheap mass air travel Come from the Laboratory a reality and was ultimately responsible for introduc- As we try to understand what true innovation is, we ing nonstop jet flights that carried hundreds of passen- must not misunderstand a figure like Bill Gates. He gers from New York to Europe, first with the 707 and is not an inventor. BusinessWeek has referred to him then the 747. At the time, the common presumption as the “software whiz kid” and People magazine has was that international air travel was the privilege likened him to Thomas Alva Edison, whose photo- of the rich and, moreover, the leaders of the airline

24 the conference board 2006 annual report industry considered jets too noisy, heavy on mainte- to have commercial importance, according to a study nance (a fallacy), too big for most airports, and too for the Lemelson-MIT Program, and less than 1 per- expensive. Cyrus Smith, the tough Texan who ran cent have the seminal importance of, say, Douglas American Airlines, expressed the attitude of all airlines Engelbart’s 1970 patent for the computer mouse or when he said, “We can’t go backward to the jet.” John Vaught’s inkjet for Hewlett Packard in 1975. But Trippe could not have reached first base Those who come up with the best ideas for with this idea without persuading Pratt & Whitney to new companies were not always ready to run them. let him order J75 engines. At a lunch in 1955 with As Georges Doriot, leader of the first venture them, he put $40 million on the table, when he had capital company on the New York Stock Exchange, no airframe and, indeed, did not have the $40 million. observed, “There have been many fine scientists How he raised the money and induced both Douglas desperately trying to become poor businessmen.”6 and Boeing to build the airframes exemplifies the For others, bringing their invention to market was courage — and the cunning — of the innovator in action, not their primary motivation. Leo Hendrik Baekeland, willing to risk all on something nobody had conceived the inventor of Bakelite (the first true plastic), had of before. Trippe has yet to receive the recognition he no wish to develop his discovery. He was repelled by deserves. The most recent portrayal of him in Martin the idea that it would mean becoming “one of those Scorsese’s otherwise fine film The Aviator represents slave millionaires in Wall Street.”7 It was only when

When innovators are overlooked or their innovations misrepresented, it is more than a personal injustice; it is also a distortion of the essence of innovation and the essential qualities of the innovator.

him as standing in the way of progress in the form the licensees failed to manufacture his revolutionary of Howard Hughes and TWA. Hughes was no mean synthetic properly that he felt he had no choice but to innovator himself when it came to airplanes, but he lead his own manufacturing and distribution corpora- did not have Trippe’s early democratizing vision of the tion. Theodore Maiman, having invented the first work- future of commercial aviation. ing laser on May 16, 1960, described it as “a solution looking for a problem” because so few appreciated A Good Invention Is Not Enough its manifold possibilities. He too ended up founding Another important confusion about innovation stems his own company. He was first an inventor, then an from regarding it as synonymous with invention and innovator. discovery. An invention/discovery does not become Other inventors have even walked away from an innovation until it is put to use. This is not to the innovative potential of their achievements. The devalue inventiveness.4 Juice, a recent study of world would not be connected by telephone if it had inventors by Evan I. Schwarz, vividly highlights how been left to the inventive Alexander Graham Bell. some inventions have scaled upwards, “spawning Bell’s 1876 discovery of how sound waves could be continuous and endless improvement.”5 converted into undulating electric current was criti- The millions of patents that currently exist are cal, but his telephone was useful only if you had a hallmarks of invention, crucial in some industries and good pair of lungs. It was Thomas Alva Edison (with not in others, but they are not a reliable index of Charles Batchelor) who invented the carbon button innovation. Less than 10 percent of patents turn out transmitter to solve the problem of indistinct and

4 The Ewing Marion Kauffman foundation is sponsoring 6 Evans et al., They Made America, p. 372. a national week of invention and entrepreneurship for young 7 Evans et al., They Made America, p. 217. people from February 24 to March 2, 2007. Their website (www.EntrepreneurshipWeekUSA.com) already teems with stories of achievement. 5 Evan I. Schwartz, Juice: The Creative Fuel That Drives World-Class Inventors, (Boston: Harvard Business School Press, 2004) 2006 annual report the conference board 25 muffled sound in Bell’s phone. But it was Theodore all standing in the hallway laughing at this guy in Vail, an early supporter of The Conference Board the three-piece suit. We just didn’t get people like and the organizational genius behind the formation that visiting us.”9 Swanson asked for 10 minutes of AT&T, who spearheaded the true innovation of to pitch Boyer on the idea of making a commercial establishing a private enterprise, integrated national application of his discoveries. It was convincing telephone service. In doing so, Vail confronted a myr- enough for the two young men to walk to Churchill’s, iad of technical, political, and bureaucratic obstacles, a local hangout for molecular biologists, for a beer. including the threat of nationalization. They wound up talking for a couple of hours and put down $500 each to start a pharmaceutical company Innovation Cannot Be Accomplished Alone to explore the proteins that bacteria could be induced Schumpeter tells us that invention + capital = innova- to make. They called their putative company Genentech, tion, but this neat formula rather understates just the forerunner of a rollercoaster $430-billion industry what is needed for an idea to proceed from a brain that has saved and improved so many lives. wave into the bustle of the marketplace. As well as money, my case studies suggest the importance of The Grand Legacy of Thomas Edison the innovator having a clear vision to communicate The truly great innovators go beyond bringing a sin- to others and a reservoir of patience few of us have. gle product or service to the marketplace. They are Success is more likely if one has an aptitude to lead notable systemizers who set the stage for an efflo- a creative team in different disciplines. And let’s not rescence of new products and whole industries; arti- forget the largely silent craftspeople who love and ficial insulin and then biotechnology; electric power understand machines and systems and, by constant and then cheap and universal electricity; the elevator improvements in their operations, make innovations and then the skyscraper; the transistor and then cheaper and faster. These qualities of leadership are computers and software. manifest in Dean Kamen’s long development of the The invention of the incandescent light bulb that IBOT, a self-propelled chair on wheels that can navigate illuminates Edison’s name for posterity is not really rough ground using gyroscopes and microproces- his signal achievement. The innovative genius of sors. This is just the latest in a series of inventions Edison was to build out from the bulb to the creation associated with Kamen that, in the words of one of the electrical industry. He had to conceive a sys- profile, were initiated because “he decided [they] tem down to its very last detail – and then manufac- ought to exist.”8 Again, here is an innovator inspired ture everything in it. To give some idea of the by moral values. enormity of the task, he had to: The richly varied demands on an inventor who • design and support a factory that aspires to innovation is the reason we see many would mass produce delicate filaments innovators flourishing in partnerships of complemen- and preserve a vacuum in thousands tary skills or, as Pete Peterson, the chairman of of bulbs a day; Sony United States, calls them, a marriage of “inter- • build a central power station; locking neuroses.” In the early 1970s, Herbert Boyer • design and manufacture his own was a brilliant molecular biologist happiest in his lab original dynamos; trying to induce E. coli bacteria to reproduce human • ensure an even flow of current; DNA. Robert Swanson, part of a new breed of ven- • connect a 14-mile network of ture capitalists, was happiest reading balance sheets. underground wiring, insulating the With his heart set on building a practical business wiring against damaging moisture in the infant science of bioengineering, Swanson and the accidental discharge of started cold-calling scientists who had written electricity; pieces in technical journals. • install safety devices against fire; When Swanson dropped in on Boyer’s lab at • design commercially efficient motors the University of California-San Francisco in 1976, to use electricity in daylight hours for the distance then between biology and business elevators, printing presses, lathes, etc.; was immense. One scientist remembers, “We were

8 Scott Kirsner, “Breakout Artist,” Wired, September 2000. 9 Evans et al., They Made America, p. 568.

26 the conference board 2006 annual report • design and install meters to measure how many thriving businesses owe their prosperity individual consumption; to Edison — from the production and consumption • invent and manufacture a plethora of electricity to records and movies — it is hard to of switches, sockets, fuses, distributing believe that this American treasure lacks proper boxes, and lamp holders; funding. It should be supported — financially and • convince New York’s Democratic aldermen not with words – by all who care not just about of its utility against the sabotage of the gas America’s heritage but its future, too. companies; and By the same token, companies new and old • raise much of the initial capital. would do well to cherish their archives. One of the surprises of the research for They Made America Now there’s innovation! was how few bother to do it really well. United Yet, while Edison introduced electricity into Technologies, which has taken meticulous care to cities, it was his immigrant clerk Samuel Insull who preserve documents about the origins of its Otis found a way to make cheap power available to elevators, is one of the few that does. It also kept everyone. And Insull, in turn, depended on the brilliant the diaries of Elisha Otis. A sentence in one of his George Westinghouse’s innovation of alternating

My case studies suggest the importance of the innovator having a clear vision to communicate to others and a reservoir of patience few of us have. Success is more likely if one has an aptitude to lead a creative team in different disciplines.

current. As this chain shows, an innovator is both an entries is suggestive of a major truth about America explorer and a legatee, and we still have much to and innovation: “Machines [are] the tools of liberty.” learn from them. America’s business success in promoting innovation is related to the idea of America itself. Protecting America’s Heritage of Innovation Without the ideals that have animated this country, One of the curious features of a country supposedly the innovations born here would never have so dedicated to business, and certainly one enriched by swiftly reached fruition. As society has progressed business innovation, is that political innovations and or retreated in achieving its ideals, and in resolving personalities are endlessly studied and rightly exalt- tensions between capitalism and liberal democracy, ed, but, by comparison, the workshop and office rev- innovation has also progressed or regressed. olutionaries are taken for granted in the boardrooms America’s emergence as a preeminent economic and neglected in the classrooms. Few innovators power can never be explained by the access to have touched so many areas of modern life or left physical resources or a large population, since Russia, such a stunningly complete record of their work China, Australia, Canada, Brazil, the Argentine, and as Edison. Today, a team of researchers at Rutgers South Africa were similarly well-endowed. University is seeking to make an immeasurably rich Freedom remains our most precious resource. archive of Edison’s writings accessible to all through books, microfilm, and the Internet.10 Considering

10 For more information on the Edison Papers Project, visit edison.rutgers.edu.

2006 annual report the conference board 27 the conference board Products & Services Diversity

Corporate Citizenship/Sustainability

meetings Research Working Group Webcasts Corporate Corporate Responses to Women of Color in Leadership Conferences Humanitarian Disasters Citizenship/ Business and Sustainable Councils Sustainability Development Conference Washington, D.C. Diversity Council of Diversity Executives Corporate Community Frank McCloskey Georgia Power Company research Involvement Chicago research Robert Ellis Northrup Grumman Research Reports Global Corporate Citizenship Corporation Conference New York The 2005 Corporate Research Reports Council on Work Force Diversity Contributions Report Good Practice in Workplace Eric N. Watson Food Lion, Inc. Also available in PowerPresentation format Other face-to-face forums Diversity: The Business Case May E. Snowden Starbucks Expanding the Investment Ethics Management Seminar for Diversity in an Enlarged Corporation San Diego, New York European Union Frontier: Factoring Environmental, Jeanne Myers Alliant Energy Social, and Governance Criteria (The Conference Board and Focus Sustainability Forum Brussels Corporation into Investment Analysis Consultancy jointly produced the report for The European Union.) Council on Supplier Diversity The Measure of Success: Webcasts Jeffrey A. Rolsten Bellsouth Corporation Evaluating Corporate Citizenship Executive Action series Performance Creating a Sustainable Company: Denise Coley Cisco Systems Inc. What a Company Must Focus On… Age and Opportunity: Ann C. Mullen Johnson & Johnson Philanthropy and Business: and Why Plan Strategically to Get the Most The Changing Agenda Icy L. Williams Procter & Gamble out of a Maturing Workforce Company Also available in PowerPresentation format Disaster Relief, Business and the Red Cross The Business Case for Diversity: Universal Compliance: Good Practices in the Workplace Diversity Business Council An Ethics and Compliance Pre-Release of Corporate Robert Spencer Jr. Entergy Services, Benchmarking Survey Contributions in 2004 The Diversity Imperative— Inc. Supporting Actions for Change Sustainable Development: Texanna M. Reeves Sodexho, Inc. A Business Imperative Executive Action series Diversity and Profitability: Diversity and Inclusion Council Making the Connections in Europe The Challenge of Meeting Public Using Technology to Enhance Charles S. Frew BellSouth Corporation Expectations on Sustainable Your Grantmaking Due Diligence Hispanics in the Workplace: VeLois Bowers Kellogg Company Development Building Meaningful Diversity World Community Grid Diversity and Inclusion Corporate Contributions in 2004 Women of Color: Strategy Council Corporate Social Responsibility Councils Strategies for Leadership Success Eduardo Salaz Intuit, Inc. in China: Can Voluntary Codes Business/Education Council Jeanne Myers Alliant Energy Succeed? PowerPresentation Corporation Community and Managing a Mature Workforce: Efficient Grantmaking: Public Issues Council European Council on Work-Life Demographic Trends and Using Technology to Enhance Laura B. Tew Arch Chemicals, Inc. and Diversity Due Diligence H.R. Implications Jerry Glaziert Embarq Corporation Gaining Momentum in Mainstream Investing . . . or Not? Contributions Council meetings Economics/Finance Christine Park Lucent Technologies Managing Corporate Citizenship Foundation Conferences Implications of Offshoring Carol J. Ramsey Raytheon Company research Diversity Conference New York, Moving the World— Chicago A Case Study in CSR Partnership Contributions Council II Executive Action series Karla Hall DTE Energy Company European Work Life and Diversity As U.S. Productivity Slows, Overcoming the Barriers Lucia E. Kos Edison International Conference Paris Emerging Economies Grow to a Successful Cross- Donna M. Funk HSBC-North America Rapidly, but Europe Falls Sector Partnership Women’s Leadership Conference Farther Behind European Council on Corporate New York, San Diego Responsibility and Sustainability The Gulf Coast Hurricanes: Lothar Meinzer BASF AG Other face-to-face forums Assessing the Economic Impact Diversity Workshops Chicago (2) European Council on Periodicals Environment and Product European Commission Good Stewardship Practices in the Workplace Brussels Business Cycle Indicators monthly Urban Jacobsson CEO Confidence Survey quarterly ExxonMobil Chemical Europe Inc. Consumer Confidence Survey monthly

28 the conference board 2006 annual report Governance

Economics/Finance

Consumer Internet Barometer Councils Corporate Governance and quarterly Governance Public Trust Briefing Hong Kong, Asia-Pacific CFO Council Mumbai, Singapore Consumer Spending Trends Controllers’ Council bimonthly research Corporate Governance Executives Pay for Performance StraightTalk 10 issues per year Council for CFEs of Mid-Market Companies Research Reports Kick-Off Meeting New York Corporate Governance PowerPresentations Council of CFOs Corporate Governance Frank R. Gatti Best Practices in Europe Executives Workshop San Francisco Can Europe’s Recovery ETS Directors’ Compensation and Corporate/Investor Summit Be Sustained? Council of Corporate Treasurers Board Practices in 2005 Washington DC Europe’s Productivity Gap in Thomas W. Grein Eli Lilly and Company an International Comparative Thomas C. Deas Jr. FMC Corporation The Evolving Relationship Directors’ Institute Roundtable New York (2), Chicago Perspective: Catching Up or Cathie Lesjak Hewlett-Packard between Compensation Committees and Consultants Getting Stuck? Company London Summit London Global Demographics: Susan M. Kreh PPG Industries, Inc. The 2005 Institutional Population Growth and Shifts, and Investment Report: U.S. and Webcasts the Impact on Labor and Product Council for Division Leaders— International Trends Company Programs for Market Developments Financial Executives David C. Walker GMAC Mortgage Revisiting Stock Market Resisting Corrupt Practices The Gulf Coast Hurricanes: Corporation Short-Termism Compliance and Ethics Programs: Assessing the Economic Impact Council of Financial Executives The Role of U.S. Corporate The Annual Check-Up David B. Rickard CVS Corporation Boards in Enterprise Risk Working Papers Management Conducting Effective Internal Geoffery E. Merszei The Dow Chemical Investigations Appendices to Internationally Company Comparable Science, Technology, Executive Action series How Employees View Ethics in Council of Tax Executives Their Organizations: Findings of and Competitiveness Indicators Defining the Corporate S. Mark Seymour Praxair, Inc. the 2005 National Business Ethics Ethics Brand Europe’s Productivity Gap: Review Catching Up or Getting Stuck? European Council of Defining Corporate Governance Identifying and Measuring Chief Financial Officers Practices to Add Firm Value Rudolf Zemp Maus Freres s.a. Ethical Culture meetings Strengthening Corporate Per Mänsson Novozymes a/s Measuring the Effectiveness of Governance: A New Age of Global Ethics and Compliance Other face-to-face forums Entrepreneurship in India European Council of Economists Programs: Trends and Challenges Chamber of Commerce Business Francesco Meucci UniCredit Group Briefing Paris Risk Assessments and Compliance Daniel M. Hofmann Zürich Insurance PowerPresentation Company Program Benchmarking China Center Advisory Board The Corporate Governance Beijing European Council of Financial Debate in India…Challenges The Role of the Board of Directors in Security European Commission Briefing Executives and Controllers for Global Transition Brussels Robert H. Parkes Urenco Limited An Update on Outsourcing and Sarbanes-Oxley Global Economic Update Briefing European Council on meetings with Gail Fosler Hong Kong, Singapore Investor Relations Eliane Rouyer Accor Conferences Councils Global Economic Update Briefing Marco E. Peyron Banca Nazionale Antitrust New York with Richard Cavanagh Hong Kong, Del Lavoro spa Council of Chief Audit Executives Singapore Corporate Governance in China Martha C. Shepard The Principal Wolfram Schmitt Deutsche Bank ag Improving Business Statistics Beijing Financial Group Dries Ausems DSM n.v. for China Beijing Enterprise Risk Management Council of Chief Legal Officers Conference New York Howard Malovany Wm. Productivity Briefing Frankfurt, Munich European Tax Executives Council Wrigley Jr. Ethics and Compliance Company Spain Productivity Briefing Madrid Global Council of Investor Relations Executives Conference New York, La Jolla Council of Chief Privacy Officers Robert F. Drennan Jr. Deborah Butler Unisys Corporation Progress Energy, Inc. Other face-to-face forums Council on Corporate Compliance Hungarian Council of Business Ethics Seminar New York (2) Therese Obringer Lincoln Financial Financial Executives Corporate Governance and Group Polish Council of Compliance: A Two-Day Crash Carol Baldwin Moody Nationwide Financial Executives Course New York Insurance The Research Council on Global Investment Paul Brett Hammond TIAA-CREF

2006 annual report the conference board 29 the conference board Products & Services

HR / Talent Management

Council on Corporate Governance THINKING OFFSHORING Human Capital Metrics Asia-Pacific and Risk Management—India THROUGH SERIES Conference New York Human Resources Council Rohana Weiler Agilent Technologies Council of Senior Aligning the Organization: Human Resources Outsourcing (Malaysia) International Attorneys Management and HR Issues Conference Chicago Andrew Ditty BP Asia Ltd. William D. Manson Lubrizol Corporation Human Resources Performance Roy Massey CLP Holdings Ltd. Executive Action series Management Conference New York Werner Krieger Henkel Asia-Pacific Ltd. European Council on Corporate Fatal Attraction: Organizational Design and Charles Abdi Lim Governance and Board Procter & Gamble The Job Candidate That Renewal Conference New York (Asia) Pte. Ltd. Effectiveness Is Too Good To Be True Pensions and Retirement European Council on Asia-Pacific Talent, Leadership HR’s Role in Building a Conference New York Legal Affairs Culture of Innovation Development and Organization Erik Lagendijk AEGON n.v. Senior HR Executive Conference Effectiveness Council The Irresolute American Mark Jankelson ANZ Banking Alfred Gerber New York Sulzer Ltd. Group Ltd. Looking for Employees in Strategic E-HR Conference Edward Colbert European Council on All the Right Places Dow Corning Mergers and Acquisitions San Diego Corporation Philippe Lambrecht Fortis Managing Paradoxes in Change Talent Management Strategies Donna Harding Unisys Australia Pty Limited Clive Hopkins Shell International Ltd. Managing Talent in Asia: Conference New York Leadership Challenges in Global Council on Work-Life Conference New York China Human Resources Council a Time of Transition Elaine Lin Business Conduct Baxter Healthcare Trading (Shanghai) Co. Ltd. Nancy Higgins MCI, Inc. Salary Budgets Holding Steady Other face-to-face forums Andrew Jackson Ford Motor (China) Ltd. What’s in a Day’s Pay? Asia-Pacific Talent Management Lia Belilos Shell China Limited Research Working Groups SEC Proposes New Rules Forum Hong Kong Asia-Pacific Working Group for Disclosing Executive East Coast Employee Health Care Council on Compensation on Risks and Ethics Compensation Mark L. Nagorka 3M Company Seminar New York (2) ERM Working Group Scott Swasey Chevron Corporation Employee Engagement and PowerPresentations William J. Cahill FedEx Corporation Sarbanes-Oxley 404 Retention Seminar New York (2), Discontent in the Workplace Chicago (2) Pilar C. Vitoria Johnson & Johnson Managing Paradoxes in Change: Karl W. Fischer Marriott Executive Coaching Forum International, Inc. Six Steps for Building a Balanced San Diego HR/Talent Culture Patti Koch Target Executive Coaching Seminar Management New York (2) Council on Compensation II meetings Andrew W. Brown Abbott Laboratories HR Performance Management research Duane B. Helm AT&T Inc. Conferences Seminar New York Rosemary K. Abbott Deloitte Research Reports Asia-Pacific Human Resources Investment in America Forum Brian C. Gelles EDS Conference Hong Kong West Point, NY Consumer-Driven Healthcare: Miles W. Meyer Kellogg Company Current Practices, Future Challenge 2006: Managing Talent Value of Health Executive Summit Lisa Emerson McDonald’s Corporation Developments Globally Conference Dublin New York Report based on research conducted by the Council on Development, Compensation Conference West Coast Employee Healthcare Consumer-Driven Healthcare Working Group Education and Training New York, Chicago Seminar San Diego (2) Cutting Healthcare Costs: Robert C. Reindl Edwards Options for Mid-Market Firms Employee Benefits Conference Lifesciences Corporation Chicago Webcasts Kevin D. Wilde General Mills, Inc. Maximizing Rotational Employee Health Care Coping with Corporate Violence Michael A. Hopp Lockheed Martin Assignments: A Handbook for Corporation Human Resources Executives Conference New York, San Diego Tamar Elkeles QUALCOMM, Inc. Also available in PowerPresentation format Enterprise Learning Strategies Councils Report based on research conducted by the Conference New York Advisory Council on Human Council for Division Leaders— Rotational Assignments Working Group Human Resources Executive Coaching Conference Resources Management Strategic Workforce Planning: Michael L. Meyer Abbott Laboratories New York, Chicago Miles B. King Toyota Motor Sales, Forecasting Human Capital Needs U.S.A., Inc. Peter Wentworth Pfizer Consumer to Execute Business Strategy Executive Compensation Healthcare Report based on research conducted by the Conference New York (2), Chicago Francis J. Hyatt Wausau Insurance Strategic Workforce Planning Working Group Growth and Innovation Company Top Executive Compensation Conference New York Council for Division Leaders— HR Problem Solving New York Human Resources II Patricia E. Rowell American Express

30 the conference board 2006 annual report Leadership/Strategy

Council on Employee Healthcare Employee Benefits Council Mature Worker Engagement ON THE RECORD SERIES Tom Jecklin State Farm Insurance Susan C. Bailey American Greetings Companies Corporation Mature Workforce Challenges Dr. Stephanie A. Burns of Dow Corning Duane L. Olson Deere & Company Teri A. Ferguson The Dow Chemical Strategic Workforce Planning Company Lim Chee-Onn Council on Executive Coaching of Keppel Corporation, Ltd. William H. Hodgetts Fidelity European Council on Investments Compensation and Benefits Leadership/ Bertrand Collomb of Lafarge Donald Watson Hydro Aluminum ASA Council on Executive Dr. Gerhard Cromme Clive Wright Mercer Human Resource Strategy of ThyssenKrupp ag Compensation Consulting Sharon L. Sullivan Eli Lilly and Sajjan Jindal of JSW Steel, Ltd. Company European Council of Human research Cynthia Heath Emerson Electric Co. Resources Executives PowerPresentations Bruce Pavoni General Electric Andy Jones Prudential PLC Research Reports Company CEO CHALLENGE SERIES CEO Challenge 2006: European Council on James R. Otieno Top Ten Challenges Hewlett-Packard Learning, Leadership and Company Analysis and Perspectives Organizational Development Developing Global Leaders Ron T. Miller Motorola, Inc. Mid-Markets Mid-Market CEO Challenge 2006 Charles W. Wise PPG Industries, Inc. Executive Compensation Management Council Top 10 Challenges Council of Wilma K. Schopp Monsanto Company Poland (English and Polish language meetings Human Resources Executives Marc L. Buchsbaum NCR Corporation editions) Lawrence J. Krema Equity Office Sally K Fanning Praxair, Inc. Conferences Properties Trust Developing Global Leaders: David Kasiarz The Pepsi Bottling Group Enhancing Competencies and Global Leadership 2006 Mumbai Rachel P. McKinney DENTSPLY Accelerating the Expatriate International Succession Management Global Human Resources Council Experience Sally A. Savoia Praxair, Inc. Shirley Gaufin Black & Veatch Conference New York Corporation From Risk Management to Leadership Development Council on International Risk Strategy—Mid-Markets Compensation and Benefits Global Human Resources Council II Conference San Diego, New York Rhonda Gold Bristol-Myers Squibb Deihleen E. Claffey Hewlett-Packard Leadership Development in Asia- Pacific: Company Company Identifying and Developing Other face-to-face forums Leaders for Growth Council on Learning, Development Human Resources Council—India Asia CEO Challenge Roundtable and Organizational Performance Pradeep Mukerjee Citibank, N.A. Singapore, Kuala Lumpur Executive Action series Edward Betof BD CEO Challenge Interview and Human Resources Are You In or Out? In-House Michael A. Garber USG Corporation Briefing New York, San Francisco Council—Mexico vs. Outside Counsel Council for Mid-Market Human Joaquín J. Salazar García Clinton Global Initiative PricewaterhouseCoopers (Mexico), S.C. Growing a Family Company: Resources Executives—Eastern An Exercise in Patience San Francisco; Boston; New York; Washington, D.C. Division The Pensions Council Investment in America Forum Mark P. Salsbury Markem Corporation The Incredible Shrinking Neil McPherson Standard Life West Point Carla S. Nussbaum Paragon Investments Ltd. Corporation Medical, Inc. Leadership Dialogue Cincinnati, Christian Frener Swiss Reinsurance Keep It Simple: Getting Your Chicago, Madrid James L. Francis Swagelok Company Company Arms Around Enterprise Risk Gayle Schaumann Union Tank Car Management Leadership Excellence Summit Company Polish Council of Human Annapolis Resources Executives Threat, Vulnerability, and Council for Mid-Market Consequence: A Framework Human Resources Executives— Research Council on for Managing Webcasts Western Division Employee Benefits Ellen Collier What Do We Really Know about Leadership Development in Robert Jones Eaton Corporation First Interstate Effective Leadership in Change Asia-Pacific: Identifying and BancSystem Work Life Leadership Council Management? Developing Leaders for Growth (2) Council of Talent Sharon A. Wilkie GlaxoSmithKline Management Executives Maria S. Ferris IBM Corporation LEADERSHIP EXPERIENCE Catherine Cardona The World Bank PROGRAMS Research Working Groups Council of Talent CEO Gettysburg Consumer-Driven Healthcare Management Executives II Gettysburg (10) Courtney Rogers Amgen, Inc. Employee Engagement and Barbara A. Phillips Pfizer Inc Commitment Normandy Human Capital Strategy and Senior Leadership Dialogue Madrid Measurement I and II

2006 annual report the conference board 31 the conference board Products & Services Operations/Business Processes

Marketing/Communications

Succession Management Corporate Image Conference Brandi Robinson Novartis Corporation A Strategic Approach to Security: Seminar New York, San Diego New York Compliance, Certification, and In conjunction with the London Business School Council of Marketing Executives Competitive Advantage Customer Experience Bram B. Johnson FedEx Ground The Conference Board Annual Management Conference Dinner New York New York, Chicago Council of Marketing Executives II PowerPresentations Mark Samuels Customer Loyalty Conference SEI Investments Making the Business Case Company Councils New York for Security Council on Marketing Research Preparing for the Worst: Council of Strategic Extending Your Brand to Chris Curtright United Parcel Service Business Continuity Planning Planning Executives Employees Conference Chicago for Mid-Markets Richard J. Lunardi Con-way Inc. Marketing Conference New York European Council on Corporate Communications Executive Council Marketing Research Conference Katharina Auer AstraZeneca plc meetings Satyam C. Cherukuri Sarnoff Chicago Corporation Stefan Lorentzson Volvo Sales and Marketing Strategy Conferences European Council on Conference New York Polish Council of Asia-Pacific Shared Services Corporate Strategy Marketing Executives Conference Shanghai Hein Schreuder DSM N.V. Other face-to-face forums Western Marketing Business Development Joachim Heins-Bunde SGL Carbon ag Research Council Communicating Employee Conference New York Vivian Milroy Callaway General Benefits Seminar New York (2), European Council on Mills, Inc. Business Intelligence Conference Strategic Risk Management Chicago (2) Chicago Leadership Development Council Communicating Organizational Change Management Conference Change Workshop New York (2), Operations/ New York Middle East Business Leaders Chicago (2) Council Business Processes Corporate Real Estate Corporate Brand Management Conference New York Polish Council of Chief Executive Workshop Chicago (4) Officers Corporate Security, Corporate Image and Branding research Strategic Risk Management Business Continuity and Crisis Seminar New York (2) Management Conference New York Council Research Reports Tara Heusé Skinner Employee Communication The South THINKING OFFSHORING E-Procurement Conference Chicago Financial Group, Inc. Workshop New York (2), Chicago (2) THROUGH SERIES Post-Merger Integration Senior Marketing Executive Conference Chicago Roundtable New York (2), Chicago (2) The New Corporate Reality: Marketing/ External and Market Considerations Purchasing Conference New York Communications Councils Shared Services Conference Executive Action series Chicago Asia-Pacific Corporate Globalization: Will Your Company Six Sigma Leadership Conference Communications Council Be Left Standing? research Chicago Asia-Pacific Strategic Is Avian Flu the Next Y2K? Spend Management Conference Research Report Marketing Council Can We Afford To Think So? Demographic Information Simone Wheeler Factiva New York Making It in Manufacturing: Service: Income by Age Group Anna Yong Heidrick & Struggles Strategic Alliances Conference Becoming Lean to Compete Scott Whyman Unisys Singapore Globally Chicago Executive Action series Pte. Ltd. Strategic Outsourcing Making the Business Case Conference New York China: Creating an Unlikely Edge Corporate Communications for Security in the Global Market Share Battle Development Group Supplier Relationship Management’s Great Addiction How Smaller Companies Council on Competitive Analysis Management Conference Atlanta Earn Customer Loyalty Steve Douvas Navigating Energy Management: FM Global Supply Chain Conference Chicago A Roadmap for Business Council on Corporate The Nuts and Bolts of Execution: meetings Brand Management Other face-to-face forums Putting Ideas to Work Dean Adams 3M Company Business Continuity, Security, Conferences Preparing for the Worst: and Crisis Management Seminar Council on Corporate Asia-Pacific Marketing and A Guide to Business Continuity New York (2), San Diego (2) Communications Conference Communications Strategy Planning for Mid-Markets Janet M. Botz Hong Kong Dow Corning Offshoring and Outsourcing: Corporation Safety, Health and Environmental A Framework for Decision Corporate Communication and Management Excellence Yields Makers Roundtable Hong Kong, Technology Conference New York Council on Corporate Business Benefit Singapore,Shanghai, Beijing, Sydney Communications Strategy II Tara Carraro Altria Corporate Risk Management and Security Services, Inc. Roundtable New York, Dallas, Chicago Genevieve Haldeman Symantec Corporation

32 the conference board 2006 annual report Webcasts Chief EH&S Officers’ Council I European Council on Purchasing and Supply Adopting a Global Privacy Policy Arthur J. Gibson Baxter Healthcare Health and Safety Leadership Council II for the Transfer of Personal Data Corporation John Lyons O2 plc John R. Gossmann Medtronic, Inc. LaRaye Osborne Cargill The Business Case for European Council on U.S. Quality Council Corporate Security Chief EH&S Officers’ Council II Information Technology Leroy Boatwright Corning Incorporated Scott Nadler Environmental Resources Governance and Strategy Business Continuity Planning: Steven H. Hoisington Management Group Patrick Arlequeeuw Johnson Controls, Inc. Strategies for Success Richard H. Bennett United Procter & Gamble Company Defining Corporate Value Technologies Corporation European Council on Innovation Working Groups in the Knowledge Economy (2) Council for Business Henrik Dalboege Novozymes a/s Assessing Offshoring Risks Defining Corporate Value: Development and Maximizing Rotational Proposed Patent Reform— Integration Executives European Council on IT Governance and Strategy Assignments in Asia-Pacific The Impact on Your Business Randolph M. Croyle The Dow Chemical Company Managing Security European Council on Purchasing Michael Hellemann Novo Nordisk in the 21st Century Council of CIO Executives Servicepartner a/s Additional Metrics and Corporate Security Brandt R. Allen University of Virginia European Council Publications Planning Wisely: Overseas Council on Corporate Real Estate on Shared Services Security and Preventive Aspects Council of Corporate Michel de Zeeuw Philips of Pandemic Readiness Magazine Security Executives International B.V. Across the Board/ Planning Your Response to Claus W. Bertram Deutsche Bank AG Jos Verelst SKF European The Conference Board Review Privacy Breaches and Other bimonthly Information Security Incidents Council on Corporate European Council on Six Sigma Travel Management European Council on Thinking Ahead: Stacey Taylor Tyco International Newsletters Using Scenarios for Pandemic Strategic Manufacturing Jochen Jacobs Planning and Preparedness Council on Innovation Henkel KGaA Board Asia quarterly Carol H. Pletcher Cargill Thinking the Unthinkable: Global Business Board Europe bimonthly Excellence Council Corporate Readiness and the Council of Shared Business Board India biannually Pandemic Threat Services Executives Paivi Suutari Stora Enso OYJ Denise H. Kluthe Board News quarterly Travel Security—Risks and Alcoa Inc. Global Operations Executives Responsibilities Thomas McGlinn Unisys Corporation Council on Outsourcing and E-mail Express biweekly Offshoring Council of Shared Business Councils Services Executives II Information Research Miscellaneous Earl K. Moore BHP Billiton and Management Council China Center Report No.1: Asia-Pacific CIO Council Jonica Preite UNICCO Service Company Aletta Moore 3M Company Results of Statistical Forum Asia-Pacific Shared Services Learning and Knowledge Sustainability and the Changing Council Council for Six Sigma Executives Management Council Notion of Fairness A speech by Vivienne MacCarthy Cadbury Steven K. Randol Office of the Chief of James I. Mitnick Turner Construction Gail Fosler at The Conference Board Forum Schweppes Pty Ltd. Staff, Department of the Army Company on Sustainability in Brussels Ricardo Manotoc Henkel Financial Council for Six Sigma Executives II Services SEA Co. Ltd. Leslie Behnke CIGNA Corporation Online Strategy Council Arthur Skipitaris Australia Post Thomas Hoehn Eastman Kodak Jeanne J. Kenney Entergy Corporation Company Andrew Crow Philips Electronics (S) Pte. Ltd. Council of David C. Lyons PSEG Services Telecommunications Executives Corporation Business Continuity and Thomas J. Marcin DuPont Company Crisis Management Council Performance Excellence Council Frederick M. Spina Pitney Bowes Inc. Environment, Health J. Michael Bealle Union Pacific and Safety Legal Council Railroad Company Business Performance Council Peter Etienne Baxter International Inc. Ellen J. Gaucher Wellmark Blue Cross Philip C. Forve Cargill Blue Shield of Iowa Sally J. Penley Weyerhaeuser European Council Strategic Resources on e-Procurement Purchasing and Supply Floris Mokveld DSM Purchasing Leadership Council Anthony S. Nieves Hilton Hotels European Council on Corporation Global Supply Chain Laurent Foetisch Laboratoires Serono sa Arne Schmidt Novozymes a/s

2006 annual report the conference board 33 the conference board Statements of Financial Position

in us$ thousands

Year ended June 30 2006 2005 Assets Cash and cash equivalents $ 5,918 $ 6,803 Accrued interest receivable 166 116 Accounts receivable 6,279 5,445 Investments, at fair value 24,469 19,600 Securities purchased not yet settled — 2,145 Deferred charges and sundry assets 1,474 1,551 Pension asset 6,455 6,956 Furniture, equipment, software, and leasehold improvements— at cost, less depreciation and amortization 1,972 2,547 Total Assets $ 46,733 $ 45,163

Liabilities and Net Assets Accounts payable and accrued liabilities $ 7,799 $ 7,597 Advance payments and deferred revenue 11,225 9,733 Deferred subscription revenue 9,502 8,588 Due to broker –2,145 Post-retirement benefit obligation 3,524 3,203 Total Liabilities 32,050 31,266

Net Assets Unrestricted 14,589 13,810 Temporarily restricted 94 87 Total Net Assets 14,683 13,897

Total Liabilities and Net Assets $ 46,733 $ 45,163

Note: The information on pages 34 and 35 was extracted from the Financial Statements audited by Ernst & Young llp. These statements are available to members of The Conference Board upon request.

34 the conference board 2006 annual report the conference board Statements of Activites

in us$ thousands

Year ended June 30 2006 2005 Operating Revenue Subscriptions $ 16,989 $ 15,942 Conferences, councils, and meetings 32,194 29,550 Grants, contracts, and fee-based services 5,458 4,327 Sale of publications 470 391 Other income* 768 579 Total Operating Revenue 55,879 50,789

Operating Expenses Compensation 26,543 24,021 Purchased services 10,442 9,032 Travel 1,858 1,775 Meeting location costs 6,641 6,095 Printing, postage, and supplies 4,681 4,232 Depreciation and amortization 686 771 Facilities 3,051 3,042 Other expenses 1,631 1,543 Total Operating Expenses 55,533 50,511 Excess of Revenue from Recurring Operations 346 278

Other Activities Nonrecurring legal expenses – (579) Interest, dividends, and other income 291 261 Realized gain on disposal of investments 393 396 Unrealized (loss) gain in the fair value of investments (267) 94 Effect of foreign currency translation 16 (35) Transfer of temporarily restricted net assets to unrestricted net assets – 100 Change in unrestricted net assets 779 515 Change in temporarily restricted net assets 7 (91) Change in net assets 786 424 Net assets as of the beginning of the year 13,897 13,473 Net Assets as of the End of the Year $ 14,683 $ 13,897

* Includes $501,000 and $298,000 in 2006 and 2005, respectively, of Operating Fund investment income.

2006 annual report the conference board 35 the conference board Global Counsellors

asia/pacific Singapore Karel Vinck Michael Diekmann4 Chairman of the Board Chairman of the Management S. Dhanabalan Australia Umicore Board and CEO Chairman ag Linda Bardo Nicholls Allianz Temasek Holdings (Private) Ltd. Denmark Retired Chairman Klaus Kleinfeld Australia Post Koh Boon Hwee Mads Øvlisen President and CEO Chairman Chairman of the Board 3 Siemens a.g. John B. Prescott, A.C. DBS Bank Lego a/s Chairman Edward G. Krubasik Australian Submarine Lim Chee Onn4 Jess Søderberg Corporation Pty Ltd Partner and CEO President Executive Chairman ORGALIME Keppel Corporation Limited A.P. Møller - Maersk Group John B. Reid, A.O.3 Werner Wenning2 Chairman Emeritus middle east Peter Straarup Australian Graduate School Chairman of the Executive Board Chairman of the Board of Management of Management Egypt and the Executive Committee ag University of New South Wales Danske Bank as Bayer M. Shafik Gabr Greece Hong Kong Chairman and Managing Director Finland ARTOC Group Andrew C.W. Brandler Jukka Härmälä Yannis S. Costopoulos Chairman of the Board of Group Managing Director Israel President and CEO and CEO Stora Enso Directors and CEO CLP Holdings Ltd. Doron Tamir Alpha Bank Chairman Ole Johansson Ireland Sir C.K. Chow2 RDT Investments President and CEO Chief Executive Officer Wärtsilä Corporation Brian J. Goggin2 Mass Transit Railway Corporation Kuwait Group Chief Executive 4 Hisham Abdulrazzak Al-Razzuqi Mikael Lilius Bank of Ireland Marjorie Yang Chief Executive Officer President and CEO Chairman Gulf Investment Corporation Fortum Corporation Liam O’Mahony Esquel Group of Companies Group Chief Executive Oman France CRH plc India Philippe Camus 4 Sayyid Khalid Bin Hamad Netherlands Mukesh D. Ambani Al Bu Said Co-Managing Partner Chairman and Managing Director Chairman Lagardère Peter Bakker Reliance Industries Ltd. Sabco l.l.c. Chief Executive Officer Bertrand Collomb TNT n.v. Nandan M. Nilekani4 United Arab Emirates Chairman of the Group Chief Executive Officer, Chairman of the Board Rijkman W. J. Groenink President and Managing Director Khalid Kalban of Directors Chairman of the Managing Board Infosys Technologies Limited Chief Executive Officer LAFARGE ABN AMRO Bank n.v. Dubai Investments Malaysia Denis Kessler2 P. J. Kalff13 europe Dato’ Tan Teong Hean Chairman and CEO Former Member of the SCOR Group Supervisory Board Chief Executive Director Belgium n.v. Southern Bank Berhad ABN AMRO Bank François M. G. Cornélis4 Jean-Louis Mathias Jonkheer Aarnout A. Loudon13 Philippines Vice Chairman of the Chief Operating Officer Executive Committee and EDF Chairman of the Roberto F. De Ocampo Supervisory Board President Executive Vice President Germany TOTAL sa Akzo Nobel nv Asian Institute of Management Josef Ackermann4 Kees J. Storm1 Oscar M. Lopez Viscount Etienne Davignon Chairman of the Management Vice Chairman Board and the Group Executive Member of the Supervisory Board Chairman and a AEGON n.v. Chief Executive Officer Suez-Tractebel s. . Committee Deutsche Bank ag 3 4 First Philippine Holdings Julien De Wilde Morris Tabaksblat Corporation Member of the Board of Directors Roland Berger Retired Chairman and CEO a Unilever n.v. Washington Z. Sycip3 4 N.V. Bekaert s. . Chairman Roland Berger Strategy Founder Thomas Leysen C. J. A. van Lede The SGV Group Consultants Chief Executive Officer Member of the Supervisory Board Umicore Gerhard Cromme4 Akzo Nobel nv Chairman of the 2 Anton van Rossum G. J. (Hans) Wijers Supervisory Board Chief Executive Officer Member of the Board of Directors ThyssenKrupp ag nv Crédit Suisse Group Akzo Nobel

36 the conference board 2006 annual report Norway Güler Sabanci United States H. William Lichtenberger Chairman Chairman Johan H. Andresen, Jr. Paul M. Anderson Haci Ömer Sabanci Holding a.s. Noveon Owner and Chief Executive Officer Chairman as Ferd Holding United Kingdom Duke Energy Corporation Ellen R. Marram3 4 Advisor Poland Sanjiv Ahuja Alain J. P. Belda l.l.c Chief Executive Officer North Castle Partners, Maria Wišniewska Chairman and CEO Orange a.s. 3 4 Vice President Alcoa Inc. W. Craig McClelland 3 Retired Chairman and CEO Polish Confederation of Lord Browne of Madingley Robert H. Benmosche4 Union Camp Corporation Private Employers Group Chief Executive Retired Chairman and CEO Spain BP p.l.c. Metropolitan Life Insurance Co. Hutham S. Olayan4 President and CEO César Alierta Izuel4 Patrick J. Cescau Douglas R. Conant4 Olayan America Corporation Chairman and Group Chief Executive President and CEO plc Chief Executive Officer Unilever Campbell Soup Company James W. Owens4 s.a. Telefónica Chairman and CEO Harald Einsmann Alan M. Dachs24 Caterpillar Inc. Isidro Fainé Casas Executive Chairman of the Board President and CEO a.b. l.l.c President and CEO Findus Fremont Group, . Donald K. Peterson1 La Caixa 4 Chairman and CEO Niall Fitzgerald kbe Alfred C. DeCrane, Jr.3 Avaya, Inc. Francisco González Rodríguez4 Chairman Retired Chairman and CEO plc Chairman and CEO Reuters Group Texaco Inc. Jane Cahill Pfeiffer13 BBVA 1 Management Consultant Sir Bryan Nicholson, gbe Robert E. Denham4 1 Ignacio Sánchez Galán Former Chairman Partner Henry B. Schacht3 llp Vice Chairman and CEO Financial Reporting Council Munger, Tolles & Olson Managing Director and Iberdrola s.a. 3 Senior Advisor Lord Marshall of Knightsbridge Livio D. DeSimone13 Warburg, Pincus & Co., Inc. José Luis Madariaga2 Chairman Retired Chairman and CEO Executive Chairman Pirelli UK plc 3M Company Anne M. Tatlock4 PricewaterhouseCoopers - Spain Chairman and CEO Sir Martin Sorrell Samuel A. DiPiazza, Jr.4 Fiduciary Trust Company Sweden Group Chief Executive Chief Executive Officer WPP Group plc llp International Tom Johnstone PricewaterhouseCoopers 4 3 Paul A. Volcker President and CEO Peter D. Sutherland Laurence D. Fink4 ab Former Chairman of SKF Chairman and Managing Director Chairman and CEO Goldman Sachs International the Board of Governors Lars G. Nordström BlackRock, Inc. The Federal Reserve System Group Chief Executive Officer Andre Villeneuve1 4 ab Jacob A. Frenkel Nordea Chairman Vice Chairman Euronext.liffe Marcus Wallenberg4 Chairman, Global Economic Chairman of the Board Strategies Group americas SEB American International Group, Inc. 3 Switzerland Mexico Christina A. Gold President and CEO Dionisio Garza Medina Fritz F. Fahrni Western Union Company Chairman Chairman of the Board and CEO Innovation Management Alfa Corporativo, S.A. de C.V. John W. Johnstone, Jr.13 and Logistics Retired Chairman and CEO Tomás González Sada Institute of Technology Olin Corporation Management and Chairman of the Board, Entrepreneurship President, and CEO Harry P. Kamen3 University of St. Gallen Grupo Cydsa, S.A. de C.V. Chairman of the Board and CEO (Retired) Federico Sada Turkey Metropolitan Life Insurance Chief Executive Officer Company Bülent Eczacibasi Grupo Vitro Chairman 4 a.s. Panama Harry M. J. Kraemer, Jr. Eczacibasi Holding Executive Partner Stanley A. Motta Madison Dearborn 1 Until November 16, 2006 Chairman 2 As of November 16, 2006 Banco Continental de Panama 3 Former Trustee 4 Global Advisory Council Member

2006 annual report the conference board 37 the conference board Board of Trustees

chairman vice chairmen

Samuel A. DiPiazza, Jr. Josef Ackermann Douglas R. Conant Harry M. Jansen Chief Executive Officer Chairman of the President and CEO Kraemer, Jr. PricewaterhouseCoopers Management Board Campbell Soup Company Executive Partner and the Group Executive Madison Dearborn Committee Deutsche Bank ag

Nandan M. Nilekani Anne M. Tatlock Chief Executive Officer, Chairman and CEO President and Managing Director Fiduciary Trust Company Infosys Technologies Ltd. International

members Herbert M. Allison, Jr. Alan M. Dachs Klaus Kleinfeld Stephen G. Snyder1 Chairman, President and CEO President and CEO President and CEO President and CEO TIAA-CREF Fremont Group, l.l.c. Siemens ag TransAlta Corporation Alain J. P. Belda Ian E. L. Davis Lim Chee Onn2 Sir Martin Sorrell1 Chairman and CEO Worldwide Managing Director Executive Chairman Group Chief Executive Alcoa Inc. McKinsey & Company Keppel Corporation Limited WPP Group plc Robert H. Benmosche1 S. Dhanabalan1 Padraig McManus2 Anton van Rossum Retired Chairman and CEO Chairman Chief Executive Officer Member of the Metropolitan Life Insurance Co. Temasek Holdings (Pte) Ltd. Electricity Supply Board Board of Directors Crédit Suisse Group Stephanie A. Burns Niall FitzGerald kbe1 Linda Bardo Nicholls President and CEO Chairman Retired Chairman G.J. (Hans) Wijers2 Dow Corning Corporation Reuters Group plc Australia Post Chairman, Board of Management Richard E. Cavanagh Jeffrey E. Garten Hutham S. Olayan Akzo Nobel nv President and CEO Juan Trippe Professor of President and CEO The Conference Board, Inc. International Trade, Olayan America Corporation Ronald A. Williams Finance and Business Chairman of the Board, Chief 2 Patrick Cescau Yale School of Management Michael E. Roach Executive Officer and President Group Chief Executive President and Aetna Inc. Unilever plc Anne Golden Chief Executive Officer President and CEO CGI Group Marjorie Yang Paul W. Chellgren The Conference Board Chairman Retired Chairman of of Canada Edward B. Rust, Jr. Esquel Group of Companies the Board and CEO Chairman and CEO Ashland Inc. Francisco González State Farm Insurance Companies Jaime A. Zobel de Ayala2 2 President and Co-Vice Chairman Rodríguez 2 Chairman and Mayo Schmidt Ayala Corporation Chief Executive Officer President and BBVA Chief Executive Officer Saskatchewan Wheat Pool Rijkman W. J. Groenink1 Chairman of the Samuel C. Scott III Managing Board Chairman, President and CEO ABN AMRO Bank n.v. Corn Products International, Inc.

1 Until November 16, 2006 2 As of November 16, 2006

38 the conference board 2006 annual report Communications Randall Poe, Frank Tortorici, Carol Courter The Conference Board is a not-for-profit Creative Peter Drubin organization and holds 501(c)(3) tax-exempt status in the United States. Project Editor Timothy Dennison Editors Celia Colista, Erik Gopel, © 2006 by The Conference Board, Inc. Marta Rodin All rights reserved. Printed in the U.S.A. The Conference Board and torch Production Margaret Cesario logo are registered trademarks of Printing Thames Printing The Conference Board, Inc. www.conference-board.org

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