Rick Hernandez: An Insider's View
Story By: Pablo Schneider
A Conversation on Corporate Governance with Rick Hernandez
Enrique "Rick" Hernandez, Jr. is the Chairman, President, and CEO of Inter-Con Security Systems, Inc., which has over 25,000 employees in the Americas, Africa and Europe. Hernandez serves as a Director of Chevron Corporation, Chairman of McDonald’s Corporation, a Director of Nordstrom, Inc., and a Director of Wells Fargo & Company. In addition, he is on the board of trustees of the University of Notre Dame and serves as a board member of The John Randolph Haynes and Dora Haynes Foundation, the Harvard College Visiting Committee, and the Harvard University Resources Committee. Hernandez graduated with a bachelor's degree in government and economics from Harvard University and graduated with a law degree from The Harvard Law School.
Pablo Schneider: The corporate governance ecosystem is challenging in its lack of diversity and slow pace of change although women are making some gains. What are your thoughts about women on corporate boards?
Rick Hernandez: I can respond with a perspective on Nordstrom. The way we looked at it at Nordstrom is that we wanted our board to reflect our customers and our company. As a retailer, the majority of the people who shop at our stores or online are women, and so we thought as a strategic matter but also from the equity standpoint, that the board needed to have a good number of women on it. You can layer that on top. We were thinking like that 15 years ago, and if you look at the Nordstrom board continuously over time, 30% or more of the board members have been women.
Schneider: What are your thoughts on the Hispanic market as it relates to board conversations and board composition?
Hernandez: It’s a complicated issue. In many cases what boards do is challenge management to set higher goals, to change in different ways, and to respond to the market. Clearly one of the opportunities is seizing upon all of the potential of the Hispanic market, and I think board members bring their personal experience to the boardroom. Having diversity within the board allows those challenges to be made in a more authentic, thoughtful, and data-filled way than if somebody just theoretically asks, “Do we want to serve the Hispanic market?” as opposed to intimately understanding the Hispanic market and how companies should be addressing it. I think it’s necessary for corporate boards to have the diversity of experiences that allow management to be challenged in a positive and constructive way to better serve these growing markets.
Whether on this subject or on other subjects, I believe that when somebody is speaking from experience and with authenticity, people in the room listen very carefully to them, as opposed to somebody just providing an opinion about how things might be. Whether it’s on technology or security or consumers, when somebody has something important to say and they are speaking from their own experience and deep knowledge, it just has a much louder voice and a much bigger impact in the boardroom. That speaks to needing diversity.
Schneider: What advice do you have for Hispanic professionals who are interested in pursuing board service?
Hernandez: In order to be considered for a board, you have to be very good at what it is that you do every day. Whatever it is, you need to have a level of accomplishment and demonstrated excellence. Secondly, I would say to get really involved with your community. I wasn’t planning to be involved with a corporate board but, because of my service on the board of the Children’s Hospital Los Angeles, somebody who was the CEO of a bank was on that board took note of me and asked me onto that bank’s board. Once you get on a board, I would advise that you really need to do your work. Do the reading and do the extra things so you can make a contribution. Lastly it’s what not to do, which is don't ever go on an organization’s board that you don’t really believe in what it’s doing and that you can’t be really excited and passionate about their business.
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