Last Atlantan leaves the Home Depot board of directors
By Maria Saporta
Published in the Atlanta Business Chronicle on May 29, 2015
When former BellSouth Corp. CEO Duane Ackerman retired as a director of The Home Depot Inc. on May 21, it was the first time in more than 20 years that there was not an Atlantan serving as one of the outside directors on the board.
Over the years, Atlanta has been well represented on Home Depot’s board. In 1993, Don Keough, the former president of The Coca-Cola Co., was elected to the board. A year later, Johnnetta Cole, then the president of Spelman College, joined Home Depot’s board. And in 1995, BellSouth CEO John Clendenin became a director, later to be succeeded by Ackerman. At the same time, at least three of the inside directors also lived in Atlanta — the co-founders Bernie Marcus and Arthur Blank and the longtime chief financial officer Ron Brill. With a total of 12 directors in 1998, at least half called Atlanta home.
Times have changed. Home Depot has grown into a company with more than $83 billion of sales in 2014, and it is the largest company based in Georgia.
In several conversations with people close to the company or observers of business in Atlanta, most people agreed it would be nice to have someone from Atlanta on Home Depot’s board. But they also said that should not be a top consideration when selecting a director.
When asked if the Atlanta business community should be concerned about the absence of a hometown director, Ackerman answered: “Not immediately because the founders are still here.”
Ackerman went on to say: “When you think about Home Depot, you think about Bernie and Arthur. Home Depot still has the Atlanta stamp on it. It has Atlanta’s DNA. I’m sure as time goes on, there will be someone from Atlanta on the board, because Home Depot breathes Atlanta.”
The do-it-yourself retailer began in Atlanta with four stores, and it grew to become one of the largest retail chains in the country. Marcus and Blank have become two of Atlanta’s most celebrated business leaders and philanthropists — Marcus through the Georgia Aquarium and the Marcus Center, and Blank through the Atlanta Falcons and the Arthur M. Blank Family Foundation — to name a few.
Asked in an email what he thought about the lack of an Atlanta director, Blank responded through a spokeswoman.
“I do think some Atlanta representation makes sense, as the company is based here,” Blank said. “But I’d also say it’s not the most important consideration. What’s more important is ensuring a diversity of skills among the board members and the leadership they can bring to the table. Also, in the case of a company with Home Depot’s geographic reach, there’s a balance of local versus non-local board representation that needs to be considered.”
Paul Lapides, director of the Corporate Governance Center at Kennesaw State University, said that one advantage of having a local director is that management has a director nearby who is available to serve as a sounding board. It is also easier for that director to develop informal relationships with other key members of the management team and become a better steward of the company.
“Home Depot is one of the great American success stories out of Atlanta,” Lapides said. “To not have anyone from Atlanta is unfortunate because of the storied history of the company.”
Retired Georgia State University marketing professor Ken Bernhardt said “it would be nice” to have an Atlanta director. “But it doesn’t concern me because of the role that a board plays,” Bernhardt added. “A board is concerned with the long term strategy of the company.”
The one exception was how a place relates to a company’s history and culture.
“The board does have to understand the corporate culture because that is related to a company’s ability to achieve its mission and vision,” Bernhardt said. “But you don’t have to be from Atlanta to understand that.”
Co-founder Bernie Marcus felt it was much-ado about nothing.
” I don’t think that it is a problem as the board members are picked based on their expertise and how they can be helpful to Home Depot,” Marcus wrote in an email. “Where they come form or where they live does not enter into the equation. I think this is proper. Having the Home Depot major store support center based here is significant enough in my opinion. Also, we can’t forget that Craig Menear is also on the board and is in this area. In other words, I think this a non-event.”
Craig Menear, who became Home Depot’s CEO last fall, moved to Atlanta several years ago after joining Home Depot out west in 1997.
The 2015 annual meeting was Menear’s first as Home Depot’s CEO, and he made it clear to shareholders that he not only understood the company’s culture, he was going to continue to make it central to his leadership.
Saying he was going to continue the strategy of the founders – “Bernie and Arthur” – Menear put up the slide of the inverted pyramid – showing customers at the top, associates at the next rung, then field support, corporate staff and the CEO at the bottom.
“Bernie once said: ‘If you take care of your associates, they will take care of your customers, and everything else will take care of itself,'” Menear reminded shareholders.
He took a page out of his predecessor’s playbook – Frank Blake – who quickly embraced Marcus and Blank back into the Home Depot fold after a period of estrangement during the tenure of Robert Nardelli.
He also credited Blake’s leadership for making a “strong pivot from bricks and mortar to interconnected retail” where customers want to shop through all channels. As an example, he said nearly 40 percent of the company’s online customers pick up their orders at a store.
Menear did something else symbolic. He had Caol Tomé, the company’s chief financial officer who was a leading CEO contender, to join him on stage during the meeting along with Teresa Wynn Roseborough, the corporate secretary. Tomé also gave shareholders the company’s financial picture.
As one person observed, it was Menear’s way of telling shareholders that he and Tomé were a team.
As one shareholder, Charles Miller, told Menear during the Q&A portion: “Congratulations on your first meeting chairman.”