Big banks have become too complex for boards to govern them effectively, writes a former top executive at Bank of America and Citigroup. Directors need simple tools to cut through that complexity, and Krawcheck suggests four: (1) Pay top executives with bank debt instead of just stock and stock options, to give them more incentive to worry about risk, (2) Pay dividends as a percentage of earnings instead of as a set amount, to preserve capital in downturns, (3) Ignore net interest income in judging bank performance, and pay much more attention to customer satisfaction metrics, and (4) Focus board attention not on the most troubled business segments, as is customary now, but on those that are using the most capital.

When Polman became CEO of the Anglo-Dutch multinational Unilever, in January 2009, it was his first time in the role of chief executive. That doesn't appear to have inhibited him: Since then he has transformed Unilever into one of the world's most innovative corporations. In addition to abolishing earnings guidance and quarterly reporting (on day one as CEO), he launched a plan to double corporate revenue by 2020 while simultaneously reducing the company's environmental impact by half. These are truly "audacious objectives," he acknowledges. "Nobody has ever made such a public commitment, and nobody has ever achieved anything like this." Polman believes that his initiatives build on the company's founding values: improving health and hygiene, and otherwise benefiting society. Though "a capitalist at heart," he thinks the system needs fine-tuning--in part through socially responsible investment. The Unilever Sustainable Living Plan not only sets ambitious targets but establishes detailed measures of progress toward them. Doing away with quarterly reporting has allowed the business to be more focused on the long term, and changes in the compensation system support that. In this edited interview with HBR's editor in chief, Polman talks about taking risks, attracting shareholders who support Unilever's strategy (hedge fund investors needn't apply), and why consumers are now in charge.

There's a fatal flaw in the low-price, low-margin, high-volume strategy that multinationals have been pursuing in the bottom of the economic pyramid for the past decade: In order to cover the built-in costs of doing business among low-income customers scattered in rural villages and urban slums, penetration rates must be impractically high--often 30% or more. Erik Simanis of Cornell University's Johnson School of Management argues that companies seeking to improve the lives of the world's poor should focus on a more realistic route to profitability: They need to elevate gross margins far above the company average by pushing down variable costs and boosting the price consumers are willing to pay for a unit of product. They also need to raise the price point for a single transaction. This combination of higher margins and higher price points increases the contribution--the amount of money that goes to covering fixed and operating costs--generated from every transaction. Achieving sustainable margins in low-income markets requires a margin-boosting platform that integrates three common approaches--bundling products, offering an enabling service, and cultivating customer peer groups--into a coherent strategy. In this way, companies can launch flourishing ventures capable of transforming the lives of millions of low-income people across the developing world.

Many believe that charisma, the ability to captivate and inspire an audience, is innate. But through research in the laboratory and in the field, the authors, who all work at the University of Lausanne, have identified 12 tactics that help managers become more influential, trustworthy, and "leaderlike" in the eyes of others. Great orators and politicians employ these techniques instinctively, but anyone can learn how to use them. Nine of the tactics are verbal: metaphors, similes, and analogies; stories and anecdotes; contrasts; rhetorical questions; expressions of moral conviction; reflections of the group's sentiments; three-part lists; the setting of high goals; and conveying confidence that they can be achieved. Three are nonverbal: animated voice, facial expressions, and gestures. Though there are other tactics that leaders can use--repetition, humor, talking about sacrifice--the 12 singled out by the authors have the greatest effect and can work in almost any context. And the research shows that they also have a larger impact than strong presentation skills and speech structure. This article explores the 12 tactics in detail, providing examples from business and politics, and offers guidance on how to start implementing them. A manager's goal should be to incorporate them not only into public speaking but also into everyday interactions. They work because they help you create an emotional connection with your audience, even as they make you appear more powerful, competent, and worthy of respect. People who use them effectively will be able to unite their followers around a vision in a way that others can't. And in the authors' study, executives who practiced them saw the leadership scores that their audience gave them rise by about 60%.

At Kid Spectrum, a provider of in-home services for autistic children, two high-value employees are at war. Ronnie, director of clinical operations, is a class-A clinician who is well respected by his peers and subordinates; Ellen is a highly efficient administrative director who understands the importance of the bottom line. Their work styles couldn't be more different even though each is thoroughly dedicated to the company. Kid Spectrum's owner, Matthew Sparks, must figure out how to make his newly acquired business more profitable while retaining these two key employees whose interaction is starting to become toxic. H. Irving Grousbeck, of the Stanford Graduate School of Business, presents a fictionalized case to explore this common workplace dilemma. Expert commentary comes from Jim Southern, of Pacific Lake Partners, and Peter Kelly, of Stanford Graduate School of Business and formerly of Pacific Pulmonary Services.

Although the first ship he ever commanded crashed into a buoy, Mullen rose through the ranks to serve two presidents as chairman of the Joint Chiefs of Staff--a job he says was the hardest of his life.

At Kid Spectrum, a provider of in-home services for autistic children, two high-value employees are at war. Ronnie, director of clinical operations, is a class-A clinician who is well respected by his peers and subordinates; Ellen is a highly efficient administrative director who understands the importance of the bottom line. Their work styles couldn't be more different even though each is thoroughly dedicated to the company. Kid Spectrum's owner, Matthew Sparks, must figure out how to make his newly acquired business more profitable while retaining these two key employees whose interaction is starting to become toxic. H. Irving Grousbeck, of the Stanford Graduate School of Business, presents a fictionalized case to explore this common workplace dilemma. Expert commentary comes from Jim Southern, of Pacific Lake Partners, and Peter Kelly, of Stanford Graduate School of Business and formerly of Pacific Pulmonary Services.

At Kid Spectrum, a provider of in-home services for autistic children, two high-value employees are at war. Ronnie, director of clinical operations, is a class-A clinician who is well respected by his peers and subordinates; Ellen is a highly efficient administrative director who understands the importance of the bottom line. Their work styles couldn't be more different even though each is thoroughly dedicated to the company. Kid Spectrum's owner, Matthew Sparks, must figure out how to make his newly acquired business more profitable while retaining these two key employees whose interaction is starting to become toxic. H. Irving Grousbeck, of the Stanford Graduate School of Business, presents a fictionalized case to explore this common workplace dilemma. Expert commentary comes from Jim Southern, of Pacific Lake Partners, and Peter Kelly, of Stanford Graduate School of Business and formerly of Pacific Pulmonary Services.

Roger Cahill has spent less than a year as head of the Mobile Division of BoldFlash, a flash memory component maker. On the corporate level, BoldFlash has adapted to an evolving and difficult marketplace, but the Mobile Division is struggling. The four groups within the unit refuse to work together, and the unit recently failed to capitalize on an important new product opportunity. To address the problems, Cahill has made a number of organizational and personnel changes since taking the helm. Facing low morale and eroding margins, Cahill is under pressure to meet his next challenge-reforming the product development process in an effort to save the Division.

Yum!, the owner of KFC, Pizza Hut, and Taco Bell, asks what might be the lessons from its success in China for currently contemplated expansion into India and Africa. Also, the company contemplates whether Taco Bell can succeed abroad as part of a new expansion push. Also, the case asks what distance barriers are relevant for a fast food company specializing in part on fried chicken and Tex-Mex food.

Social Impact Investment is a rapidly expanding field, but terminology in the field is poorly defined and imprecise. This note suggests frameworks that help to clarify important dimensions of SII projects, distinguishing and clarifying key differences in approaches to social impact investments undertaken by different organizations and funders.

In January 2010, John Fahey, president, CEO, and chairman of the board of trustees' executive committee of the Washington, D.C.-based National Geographic Society (NGS), must decide how best to organize the 121-year old mission-driven organization for a world of accelerating digital convergence and decreasing magazine sales. Historically a proponent of evolutionary change, he is considering a radical move: creating a senior management position responsible for e-commerce to coordinate web-based offerings and outreach across the Society's various departments, transition NGS from its many disparate and independent direct mail efforts to a more integrated and strategic e-commerce strategy, and leverage the NGS relationship with its members-currently defined as magazine subscribers, since a subscription comes with Society membership. Putting the final touches on the position and its reporting arrangements has led to significant debate within the organization, and Fahey is torn about how to proceed.

During the night of September 14, 2008, a few hours before Lehman Brothers folded, Merrill Lynch declared defeat: it was acquired by Bank of America (BofA). Unsure of its ability to continue as a standalone entity, Merrill Lynch ended 90 years of independence. Before its buyout by BofA, Merrill Lynch was the world’s largest and most widely recognized stockbroker. It dominated retail stockbroking with its army of 16,000 brokers around the world. At the start of 2008, Merrill Lynch, Goldman Sachs, Morgan Stanley, Lehman Brothers, and Bear Stearns were the five largest standalone investment banks, with a combined total history of 549 years. But within a span of six months, they would all be gone as independent investment banks. Some observers wondered whether any early signs of the financial distress that the investment firm industry experienced in 2008 could be seen in the financial statements published in the years preceding the acquisition of Merrill Lynch. In addition, was there merit in evaluating the performance of the company from an angle other than that of operating results, which is typically used by financial analysts? Specifically, would there be value in an assessment of the company’s performance by scrutinizing the origin and use of its liquid assets for the years 2005, 2006, and 2007? Such an investigation would require focus on the statements of cash flows, including the need to: <ul><li>Evaluate the cash situation at year-end.</li><li>Analyze cash flows provided (used) by operating activities.</li><li>Analyze cash flows provided (used) by investment activities.</li><li>Analyze cash flows provided (used) by financing activities.</li></ul>

Siddharth Kapoor, the Founder and CEO of H-Soft Mumbai, reflected on his meetings as he walked out of VC Ventures' offices in Mumbai. After a few months of intensely pitching his startup to several different investors, he finally had a term sheet in hand. Despite this huge milestone, Kapoor knew it was only the start of a long process of raising money. He only had three days to get back to Sharma and indicate whether he would like to initiate the diligence process. While he was familiar with some of the terms venture capital investors put into their contracts, many others were completely alien to him. Which terms were important? Which ones should he focus on negotiating? He also knew that money was only part of what the venture capital investors brought to the table. Was VC Ventures the right partner for his business? Kapoor knew he had a busy few days ahead of him as he thought through all of these questions before getting back to Vikram Sharma.

Siddharth Kapoor, the Founder and CEO of H-Soft Mumbai, reflected on his meetings as he walked out of VC Ventures' offices in Mumbai. After a few months of intensely pitching his startup to several different investors, he finally had a term sheet in hand. Despite this huge milestone, Kapoor knew it was only the start of a long process of raising money. He only had three days to get back to Sharma and indicate whether he would like to initiate the diligence process. While he was familiar with some of the terms venture capital investors put into their contracts, many others were completely alien to him. Which terms were important? Which ones should he focus on negotiating? He also knew that money was only part of what the venture capital investors brought to the table. Was VC Ventures the right partner for his business? Kapoor knew he had a busy few days ahead of him as he thought through all of these questions before getting back to Vikram Sharma.

During the night of September 14, 2008, a few hours before Lehman Brothers folded, Merrill Lynch declared defeat: it was acquired by Bank of America (BofA). Unsure of its ability to continue as a stand-alone entity, Merrill Lynch deliberately ended 90 years of independence. Before its buyout by BofA, Merrill Lynch was the world's largest and most widely recognized stockbroker. It dominated retail stockbroking with its army of 16,000 brokers around the world. At the start of 2008, Merrill Lynch, Goldman Sachs, Morgan Stanley, Lehman Brothers and Bear Stearns were the five largest stand-alone investment banks, with a combined total history of 549 years: within the span of six months, they would all be gone. Some observers wondered whether any early signs of the financial distress that the investment firm experienced in 2008 could be seen in the financial statements published in the years preceding the acquisition of this giant. In addition, was there value in evaluating the performance of the company from an angle other than that of operating results, which is typically used by financial analysts? Specifically would there be value in an assessment of the company's performance by scrutinizing the origin and use of its liquid assets for the years 2005, 2006 and 2007. Such an investigation has required focus on the statements of cash flows, including the need to: evaluate the cash situation at year-end;analyze cash flows provided (used) by operating activities;analyze cash flows provided (used) by investment activities;and, analyze cash flows provided (used) by financing activities.

The CEO of a multinational company wanted a new human resource team that operated in Guangzhou (China) to recruit and select 85 individuals for different positions throughout the enterprise. These positions included finance managers, production managers, security guides, workers for the factories, secretaries and interns. The members of the human resource team that dealt with these tasks were highly diverse in terms of their educational background (e.g., marketing, law, human resource, public relations, general business administration) and countries of origin (e.g., Canada, China, Germany). The team had to deal with a series of challenges in order for the project to be successful. These issues included a decision about task-specific job requirements, methods to assess these job requirements, strategies for recruitment, methods for personnel selection and final decision making. The team also had to deal with diversity within the team, and cross-cultural issues as well as with the leadership behavior of its CEO.

Evergreen Natural Markets is a successful food retailer located in the Rocky Mountain region of the U.S. Having grown through acquisition, it has a reputation for improving the companies it purchases while retaining previous management. This strategy has succeeded due to the Evergreen formula of community knowledge, common core values, carefully developed control measures, and consistent operating principles. In April 2012, Evergreen makes its first purchase outside its home territory: a seven-store natural foods chain in Las Vegas, Nevada. CEO Kathleen Norton wonders whether the model will remain effective outside the Evergreen base or if this newest acquisition will seriously test her leadership skills and, in particular, her ability to swiftly convert the new chains' managers, employees, and systems to the Evergreen way.

In 2008, the German coffee and consumer goods corporation Tchibo has launched Tchibo Ideas, an internet platform where customers can share their product/design ideas with the company. The tension in the case emerges from the uncertainty regarding Tchibo's intentions for Tchibo Ideas. While some people perceive this move as a genuine attempt by the company to establish closer interactions with customers, some people see it simply as a marketing gimmick. The case describes the challenges and potential benefits that Tchibo Ideas is encountering, to foster a discussion on the value of a co-creation strategy.