Collective Wisdom of Executives Worldwide - The Conference Board

annual report 2005
Collective Wisdom of Executives Worldwide
annual essay
Douglass North on Leadership
in an Uncertain World

“A bend in the road is not the end
of the road, unless you fail to make the
turn. For business leaders, the key is
to identify the bend in the road very early,
to prepare changes in strategy. The
Conference Board provides a world-class
forum for business leaders to discuss
new trends and burning issues. It helps
evolve practices and standards that
enable the smooth functioning of markets.
Most importantly, The Conference
Board’s work enables us to share and
understand best practices across
industries, countries and corporations.”
Nandan Nilekani
CEO, President and Managing Director of Infosys
Vice Chairman of The Conference Board
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Leaders Working Together to
Strengthen Performance and Values
To grow and thrive in an ever-changing business climate, leaders need
great ideas they can use today. We believe that ideas that work come
from building the right relationships with the right people.
Leaders need a place where they can hone their ideas with trusted
peers who offer experienced, practical advice — and expect the same in
return. Where a diverse mix of perspectives draws out the most useful
problem-solving insights from the most unexpected places. Where they
participate in a global conversation with one ground rule: Challenge all
assumptions in favor of what actually works.
The Conference Board brings respected economic and management
experts together with experienced leaders in business, government
and academia to create an unrivaled global community of leaders who
bring their collective wisdom to bear on today’s most pressing business,
economic and social concerns.
Participation in our forums and access to our research provides
leaders with the ideas and tools they need to break from ordinary
thinking, cultivate innovation and address critical issues in ways
that help strengthen the performance and shape the values of
their organizations and the world around them.

Paul Volcker, former Chairman of the Board of Governors of
the Federal Reserve System and Chairman of the independent
United Nations inquiry into the Iraqi Oil for Food Program,
keynotes The Conference Board’s Annual Meeting this November.
As a co-chair of The Conference Board Global Advisory Council
(with Kees Storm, Member of the Supervisory Board, AEGON n.v.),
he continues to be a major force in the work of The Conference
Board. The council, which advises and supports The Conference
Board’s economic research agenda,
®
“StraightTalk * is a good
way to keep up with what’s
happening to the economy
and an intelligent discussion
of what’s in store—when you
don’t have the whole Federal
Reserve staff to do it for you.”
Paul Volcker
is composed of global business leaders
who are committed to advancing the
understanding of the global business
environment.
CHAIRMAN’S LETTER 05
PRESIDENT’S LETTER 06
BUSINESS REVIEW 08
PRODUCTS & SERVICES 21
ANNUAL ESSAY 26
FINANCIALS 30
*Monthly economic report on global
trends by Gail Fosler, Chief Economist
of The Conference Board
GLOBAL COUNSELLORS 32
TRUSTEES 34

Chairman’s Letter
Icongratulate our loyal members and the
talented staff of The Conference Board for
another successful year. In the most important
ways, the Board set records — in service
to our members; in contribution to the public
interest; and in market performance. The
Conference Board is well positioned in the
increasingly competitive marketplace for best
practice research, economic insight, the continuing
education of executives, and shaping the
values that guide business leaders worldwide.
Two particular future challenges are extending
international reach and sharpening our branding.
Let me take this opportunity to thank
two retiring Trustees, Sharon Patrick and John
Hunkin, for their service and contribution.
The Conference Board continues to benefit from
the tradition of distinguished and active Trustees,
drawn from the ranks of business leaders from
Asia, Europe, and North America. This is at the
heart of what makes us unique.
Finally, I am delighted that my friend and
colleague, Sam DiPiazza, has agreed to succeed
me and chair this extraordinary group of Trustees.
As I prepare to step aside, I want to express my
gratitude to my fellow Trustees for their insight
and dedication; to The Conference Board staff
for their hard work and ingenuity; and to our
thousands of member executives around the
world for their long-standing generosity and
support. Much has been achieved in recent years,
which should give confidence to set the aspirations
even higher.
Respectfully submitted,
Niall FitzGerald kbe
Chairman, The Conference Board, Inc.
Chairman, Reuters Group plc
Niall FitzGerald kbe
Chairman, The Conference Board
Chairman, Reuters Group plc
2005 annual report the conference board 5

President’s Letter
We are pleased to report success in advancing
our dual mission of helping businesses
improve their performance and strengthen
their service to society. These efforts rewarded us
with a record fiscal year.
Better World
We take seriously our 90-year-old duty to help business
contribute to a better world. Here are some highlights of
our work to shape values and improve business standards:
• We continued our efforts to restore trust in corporate
governance. Our Directors’ Institute has now provided
continuing education to 300 sitting corporate directors
(representing half of the Fortune 500), including a dozen
on-site sessions with boards of leading companies.
We released a new, updated Corporate Governance
Handbook; held two transatlantic Corporate/Investor
Summits; and learned that the Harvard Business School
Press accepted Carolyn Brancato’s book for publication.
• Our corporate ethics conference was again the signal
event in the field. And our annual CEO Forum featured
Citigroup CEO Chuck Prince on “Living Your Values in
the Global Economy.”
• We extended our diversity efforts beyond North America.
To help our members in Europe capture the benefits
of workplace diversity, we created a new council and
undertook an EU review of diversity best practice.
Today, six diversity councils serve more than 250
corporate diversity executives; we held seven major
conferences about the issue; and our research on the
maturing workforce earned praise from the academic
world and high interest from executives facing multigenerational
workforces.
• We held our seventh Ron Brown Awards ceremony at
the White House, this time recognizing J. P. Morgan
Chase, KeySpan and Luxottica for exemplary
corporate citizenship.
Within hours of the South Asia tsunami, our
Contributions Council and staff colleagues facilitated
a private-sector relief response to this tragic natural
disaster. More than 100 companies used our special Web
site, which recorded more than $250 million in assistance
to relief agencies. At this writing, in September,
this same group is at work helping to facilitate the
response to Hurricane Katrina’s devastation.
Better Business
The bread and butter of our work is directed toward
bringing executives knowledge, ideas, and perspective
to help them improve their skills and strengthen their
performance. We do this by creating and sharing intellectual
capital over a wide range of critical management
endeavors — and through a world-class economics program
that forecasts and explains trends in nine markets
that represent two-thirds of the world’s GDP.
Creating Knowledge and Know-How
We published nearly 30 major reports this year —
a dozen of which were accompanied by user-friendly
PowerPoint presentations — and more than 50 online
Executive Action reports. Eight of these publications
focused on subjects of special interest to mid-size
companies.
Our economics programs continued to innovate
and win accolades. We created the Help-Wanted Online
Data Series — a monthly census of Internet job listings —
to complement our national Help-Wanted Advertising
Index of 51 major newspapers. We revised our Leading
Economic Indicators to make them even more valuable
in predicting economic turning points. Gail Fosler, our
Chief Economist, was named by the Wall Street Journal
as one of the two most prescient forecasters of inflation.
And the U.S. Business Council invited us to conduct
and present their closely watched semiannual CEO
surveys of economic sentiment.
We made special efforts to help business (and public)
leaders better understand the many facets of risk — an
increasingly complex topic in an uncertain world that is
further complicated by new markets, new financial products
and services, and greater levels of leverage. We completed
the first comparative survey of risk management
practices in Europe and North America; and explored
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est practices through conferences, councils, a working
group, and nearly a score of reports and publications.
One of our most promising initiatives — a worldclass,
independent research center on economics and
business practice in China — was launched, with ten
major multinational companies (from Europe, Asia,
and North America) pledging generous financial support
and top management attention during the three-year
startup. Our China Center will be located in Beijing and
New York and will collaborate with leading Chinese
universities. Two distinguished leaders have agreed to
co-chair the group — former U. S. Federal Reserve
Chairman Paul Volcker and Chen Yuan, Governor of
the China Development Bank (CDB).
Educating Executives
This year, some 15,000 senior executives from six
continents participated in more than 200 conferences,
120 councils, 17 research working groups, and 50
Webcasts on subjects ranging from corporate security
to productivity improvement.
We hosted a dozen experiential leadership programs
at Gettysburg and Normandy — where senior
executives learned how to apply battlefield leadership
lessons to business. These relatively new and fastgrowing
programs have proven to be especially popular
among our most seasoned and senior business
leaders, who often bring their top management teams
to participate in customized sessions.
A Year of Achievement
As a result of all of these efforts, revenue grew almost
10 percent this year (to a record high); we earned a
comfortable operating surplus from recurring operations;
and we invested $2 million to rebuild our reserves
and voluntarily fortify our pension plans.
My talented staff colleagues set 10 all-time records,
including membership subscriptions, council participation,
research working group activity, Webcasts, Web site
visits, governance programs, staff productivity, conference
contribution, and overall revenue. And our people
and our work were cited 36,000 times worldwide
by the press and media.
Richard E. Cavanagh
President and CEO
The Conference Board
Customer loyalty was exceptional and gratifying.
Some 97 percent of our key accounts chose to renew
(including a remarkable 99 percent of our key U.S.
customers). U.S. conference attendance grew 20 percent;
and we posted double-digit revenue growth in
U.S. councils, subscriptions and conferences in Asia,
advertising income, and research working groups —
and triple-digit growth in Webcasts!
Beyond the facts and numbers, two special events
marked our year. Our Annual Dinner in New York
set a record for attendance, as then SEC Chairman
William Donaldson lauded The Conference Board for
our role in strengthening corporate governance.
And this spring, we had extraordinary meetings of our
European Global Counsellors and Trustees in Ireland,
where Prime Minister Bertie Ahern shared his wisdom
on Ireland’s economic development strategy.
Finally, let me express my thanks to our outgoing
Chairman, Niall FitzGerald, for his years of dedicated
leadership. His prodigious energy and exceptionally
high standards made The Conference Board a better
enterprise, and we are grateful for his care and vision.
We are blessed that long-time Conference Board Trustee
and Vice Chairman Sam DiPiazza has agreed to succeed
Niall.
Respectfully submitted,
Richard E. Cavanagh
President and CEO
The Conference Board, Inc.
2005 annual report the conference board 7

Business Review 2004–2005
Building a Community of Leaders Worldwide
This March in Paris, more than 200 invited guests
heard worldwide business leaders call for a barrierfree
transatlantic market to spur economic growth
and global stability. Niall FitzGerald, Chairman of
The Conference Board and Chairman of the Reuters
Group, said that relations between the U.S. and Europe
will withstand current social and political tensions.
“There is much more that unites America and Europe
than divides them,” he declared. Noting that the U.S.
and Europe produce 60 percent of the world’s gross
domestic product and drive the global economy,
FitzGerald said the ties that bind the U.S. and Europe
are both strong and enduring.
At a West Point forum this spring, co-hosted by
U.S. Secretary of the Army Francis J. Harvey and
U.S. Army Chief of Staff General Peter Schoomaker,
CEOs, three- and four-star generals and leaders from
urgent need, and high value, in sharing knowledge
across different sectors of society.
Nurturing the candid exchange of experiences
and ideas is at the core of The Conference Board mission.
Through knowledge-sharing forums, pragmatic
research, face-to-face meetings, Webcasts and small
informal events, The Conference Board is building a
community of leaders with ideas that can enhance
business performance and strengthen society.
During the last year, The Conference Board brought
leaders together around the world: In Amsterdam,
Athens, Bangalore, Beijing, Berlin, Brussels, Budapest,
Chicago, Copenhagen, Dublin, Florence and Frankfurt.
In London, the Hague, Hong Kong and Johannesburg.
And in Mumbai, Muscat, New York, Oman, Oslo, Paris,
Prague, San Francisco, Seattle, Singapore, Stockholm,
Vienna, Washington, Warsaw and Zurich.
“I’ve long valued the business intelligence I get from The Conference Board.
I trust the information because I can use it in the same way so many of
my colleagues do — to help make my company better. When I come here to
be with my peers, I hear some of the best ideas and practices and insights
in business today.”
Robert Benmosche
Chairman and CEO, Metropolitan Life
the not-for-profit sector came together to explore proven
ways to develop leaders, make better decisions and
serve society. The forum was the third such collaboration
of the Leader to Leader Institute, the U.S. Army and The
Conference Board.
Best-selling management and leadership scholar
Jim Collins told the invitation-only gathering: “If we only
have great companies, we are only going to have a
prosperous nation. We are not going to have a great
nation. Wealth and power are only the means, not
the definition, of a great nation.”
During three days of intense discussion, participants
shared experiences and insights, and developed
new friendships. Leaders emphasized that organizations
must regularly transform themselves to keep fit
and effective, and they agreed that there is both an
All provided opportunities for executives to
discover new ways of solving problems and develop
lasting business relationships. As Richard Cavanagh,
The Conference Board’s President and CEO, likes to
say: “If you come away from a meeting with one good
idea, one new relationship or one new understanding,
then that meeting was successful.”
Linking CEOs Worldwide
The Conference Board’s almost 90-year reputation
as an objective sounding board for business continues
to attract chief executives from around the world.
In October, The Conference Board’s Annual
Meeting drew more than 300 senior executives from
20 countries. Keynote speaker William Donaldson,
then Chairman of the U.S. Securities and Exchange
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Left to right
Gail Fosler Executive Vice President and Chief Economist, The Conference Board
Washington SyCip Founder, The SGV Group
Global Counsellor since 1970
Global Advisory Council founding member since 1998
Trustee of The Conference Board, 1995–2004
Councillor-for-Life since 2004
Dona Scott
Samuel C. Scott III Chairman, President and CEO, Corn Products International, Inc.
Trustee of The Conference Board
In Dublin this June, special meetings of The Conference Board Global Advisory
Council and the Board of Trustees brought together leaders from business,
government, academia and the media to discuss issues affecting the global
economy. Speakers included Irish Prime Minister Bertie Ahern; Deputy Prime
Minister Mary Harney; Brian J. Goggin, Group Chief Executive of the Bank of
Ireland; and Thomas L. Friedman of the New York Times.
Jim Collins
Author and management expert
Investment in America Forum
May 2005
West Point, N.Y.
This collaboration with the U.S. Army and the Leader
to Leader Institute was launched in 2002.
Best-selling author Jim Collins discussed some of the
major criteria that define a “great” nation. At this annual
gathering, CEOs, military leaders and members of the
not-for-profit sector explore strategies and tactics for
developing leaders with vision.

William Donaldson
Former Chairman
U.S. Securities and Exchange
Commission
Annual Meeting
October 2004
New York
At last fall’s Annual Meeting, SEC
Chairman William Donaldson praised
The Conference Board for its work
in helping companies strengthen
their governance programs, saying
that recommendations made by
the Commission on Public Trust
and Private Enterprise “are powerful
examples of actions that can help
to restore good business practices
and public trust in companies, their
leaders and the capital markets.”
The Pensions Council
February 2005 meeting
Allianz/Dresdner Bank, Berlin
Council founded in 1996
This interdisciplinary group of European pension
managers, HR executives and financial executives
gathers to discuss the strategic benefits and financial
obligations of pensions. At meeting sites from Florence
to Budapest to Edinburgh to St. Petersburg in recent
years, members have learned about country developments;
heard company case studies by fellow members;
and studied issues like deflation, liability-driven
investing and EU institutional reform.

Kleiner Perkins Caufield & Byers; and entrepreneur Dr.
Andrew Viterbi, co-founder of Qualcomm and President
of The Viterbi Group. They emphasized that major newproduct
breakthroughs are fueled by three ingredients:
dogged research, adequate capital and “dumb luck.”
At another CEO Dialogue in New York this
December, two former U.S. government officials met
with business leaders to examine the state of the
economy. Featured were former U.S. Treasury Secretary
Robert Rubin, Director and Chairman of the Executive
Committee of Citigroup; and former U.S. Commerce
Secretary Peter G. Peterson, Chairman and co-founder
of The Blackstone Group. Both warned that swelling
federal deficits, an aging population and continuing
deficits in both the U.S. Social Security and Medicare
programs are growing threats to America’s economic
growth and fiscal stability. They noted that both of
“The erosion of trust in business is serious and worrying. We need your
help, and we want to partner with you and those elements of the business
and financial community who have maintained the standards upon which
our industrial leadership was founded.”
William Donaldson
Commission, called on business leaders to push for
stronger governance and ethical standards: “The erosion
of trust in business is a serious and worrying
development. We need your help, and we want to partner
with you and those elements of the business and
financial community who have maintained the standards
upon which our industrial leadership was founded.”
Also in October, more than 40 chief executives,
major investors and company directors met in New York
to examine “Living Your Values in a Global Economy.”
Featured speaker Charles Prince, CEO of Citigroup,
launched a discussion led by Walter Kiechel, editor-atlarge
of the Harvard Business Review. A key message:
Companies can bolster their brands and profits by integrating
strong value systems into everyday operations.
This spring, The Conference Board’s popular
Leadership Experience program expanded from Gettysburg,
Pennsylvania, to Normandy, France. While walking
these historic battlefields in the footsteps of legendary
military leaders, executives learned how major lessons
of the Civil War and World War II can be effectively applied
to challenges facing business today.
Convinced that wisdom is enhanced when leaders
come together, The Conference Board and The Week
magazine have launched a series of innovative CEO
Dialogues. These newsmaking events feature notable
business leaders exploring and debating economic
issues that matter.
At last November’s CEO Dialogue in San Francisco,
high-profile leaders from high-technology firms examined
“The Genius of Innovation.” Panelists included inventor
Jeff Hawkins, the Chief Technology Officer of palmOne,
Inc.; investor William Randolph Hearst III, a partner in
America’s political parties bear responsibility for what
they view as “an impending crisis.”
Chief executives also contributed to our seventh
CEO Challenge Survey. The resulting report, CEO
Challenge 2004: Perspectives and Analysis, presents
the views of more than 500 global business leaders
in 40 countries. In-depth interviews with 11 of these
CEOs provide insight into the most critical issues facing
leaders and the firms they lead.
The most controversial, high-profile issue on
their agenda last summer? Outsourcing and offshoring.
Summing up the view of many top leaders,
Robert Benmosche, a Trustee of The Conference
Board and Chairman and CEO of Metropolitan Life,
said: “Survival of the fittest is the way you survive
in business. And outsourcing/offshoring is just another
2005 annual report the conference board 11

form of making sure that you’re economically sound
in whatever you’re doing.”
CEOs say that sustained and steady top-line
growth is their number one challenge. Echoing
Benmosche, another Trustee of The Conference Board,
Douglas Conant, President and CEO of Campbell Soup,
notes: “Life is very Darwinian. You either grow or die.”
Building Business Relationships, Face to Face
Senior executives continue to place high value on
meeting regularly with their peers from other companies,
industries and countries. During the last year,
about 15,000 executives participated in our expanding
range of business forums, including more than 200
conferences, seminars and forums and 120 councils.
At conferences and councils worldwide, the
emphasis is not only on strategies that are effective
to managing global supply chains, and from brand management
to business ethics.
Conferences are designed to keep executives out
in front of issues and trends that pose both opportunities
and risks. A strong case in point was The Conference
Board’s meeting last fall on security threats to corporations
in the wake of the war in Iraq and the spread of
terrorism. Global experts on war, terrorism and corporate
security identified impending threats to corporations
and described strategies to detect and deter potential
crises. Addressing this event were leaders from the
U.S. Department of Homeland Security, major corporations
and prominent security experts.
Making Governance Practical for Leaders
It’s now clear that companies failing to comply with
changing governance requirements do so at their peril.
“The Conference Board provides me with firsthand knowledge of strategies
that worked and those that didn’t, and the ability to learn directly from
those who developed and implemented them. Consultants may provide
me with knowledge. The Conference Board provides me with wisdom.”
Erik Sossa
Director of Employee Benefits, Pepsi Bottling Group
but also on those that fail. Erik Sossa, Director of
Employee Benefits at the Pepsi Bottling Group and
a member of The Conference Board’s Employee
Benefits Council, speaks for many council members
when he says: “The most important items I need to
do my job are ideas that work. The Conference Board
provides me with firsthand knowledge of strategies
that worked and those that didn’t, and the ability to
learn directly from those who developed and implemented
them. Consultants may provide me with
knowledge. The Conference Board provides me with
wisdom.”
As with our councils, our conferences and briefings
last year addressed virtually every important issue
facing business today. Themes ranged from leadership
development to diversity, from building loyal customers
Faced with a blizzard of new federal, state and local
regulations in the U.S; disparate laws and practices
around the globe; and pressure from both management
and investors, leading organizations turn to The
Conference Board Global Corporate Governance
Research Center as their resource of choice. Forty
companies and major institutional investors are now
members of the Governance Center.
During the last year, The Conference Board completed
a comprehensive update of its Corporate
Governance Handbook. Co-authored by Dr. Carolyn
Brancato, Director of the Center, the handbook —
which includes the timely views of 100 prominent
directors and other senior-level executives — pinpoints
a pragmatic series of best practices, new legal standards
and compliance requirements.
12 the conference board 2005 annual report

Rohana Weiler
VP, Human Resources, Asia-Pacific
Agilent Technologies Malaysia
Asia-Pacific HR Council
member since 2003
Seen here at the Asia-Pacific HR
Conference, held in Shanghai in
November, Weiler has participated
in conference and council meetings
from Bangkok to Penang to Hong
Kong. She is becoming a regular
speaker at our leadership and HR
meetings in the region and is one
of a growing number of Asia-Pacific
leaders who are finding their way
to The Conference Board.
Left to right
Carlos E. Represas
Chairman, Nestlé Mexico
Global Advisory Council member,
2000-2005
Charles Prince CEO, Citigroup
Alan MacDonald Vice Chairman,
Citibank; and COO, Global
Banking, Citigroup
In New York last October, Citigroup CEO Charles Prince was the keynote
speaker for The Conference Board CEO Forum on “Living Your Values in
the Global Economy.” Our CEO Forums highlight our long-standing role of
helping companies design strong value systems by helping their leaders
to build strong relationships over time.

Council of Chief Legal Officers
September 2004 meeting
Chicago
Council founded in 1992
Left to right
Dennis L. Schoff Senior VP and General Counsel, Lincoln National
Jose M. de Lasa Senior VP and General Counsel, Abbott Laboratories
Rick Palmore Executive VP, Sara Lee
Scott Turow Author and lawyer
The Conference Board’s Council of Chief Legal Officers brings together
corporate General Counsels from leading companies based in North America.
In addition to participating in the Council’s internal panels, members hear
from a distinguished roster of speakers from the public and private sectors.
Past speakers have included the U.S. Attorney General, several U.S. Supreme
Court Justices and Counsels to U.S. Presidents.
Left to right
Alain J.P. Belda Chairman and CEO, Alcoa
Haydee Belda
Ronald A. Williams President, Aetna
The Conference Board’s Annual Meeting attracted business leaders
from nearly 20 countries around the world. Trustees Alain Belda and
Ronald Williams lead companies that have been contributing to the
collective wisdom of The Conference Board for decades.

The Directors’ Institute — a key part of the
Governance Center — has now trained 300 corporate
directors who sit on the boards of more than half
of the world’s 500 largest companies. Comprising a
world-class faculty of jurists, scholars and seasoned
board leaders, the Institute is a premier provider of
governance education for directors.
Herb Allison, Chairman, President and CEO of
TIAA-CREF, commends The Conference Board’s pivotal
role in governance research and education: “Sound corporate
governance is absolutely essential to maintaining
investor trust — and, by extension, to ensuring our
nation’s continuing economic strength and competitiveness.
That’s why the work of the Governance Center is
so important. The Center pushes forward governance
practices…and its Directors’ Institute has become a key
training ground for corporate directors in a wide range
of online U.S. job offerings. The Conference Board
Help-Wanted OnLine Data Series covers more
than 1,200 major Internet job boards and some
important smaller boards as well. It complements
The Conference Board Help-Wanted Advertising
Index, which reports classified job advertising
appearing in 51 major newspapers across the U.S.
• The Conference Board expanded its reputation
as a leading authority on worldwide productivity
trends. Its ongoing productivity studies now
include 97 countries. Performance 2005, this
year’s widely covered study, revealed that stellar
economic performance by China and India helped
double the world’s productivity gains over the last
decade and that productivity in Ireland outpaces
every other country. Since productivity growth is
“One key to improving corporate governance practices is for companies and
institutional investors to meet in the same room and tell each other what
they’re thinking. That can be much easier said than done. The Conference Board,
through its Governance Center, provides us with a place to come together
and find common ground that's good for investors and good for business.”
Patricia Dunn
Vice Chairman, Barclays Global Investors; Chairman, HP
of industries, enabling them to sharpen their oversight
skills and stay abreast of best practices.”
Expanded Economic Intelligence
The Conference Board expanded and enriched its
already broad array of economic indicators, forecasts
and analytical reports.
Three major developments:
• The Conference Board strengthened some of the
major components of its U.S. Leading Economic
Index. Economists and the media have hailed
these efforts to make the Index even more reliable
in signaling major turning points in the economy.
• To help business analysts and management
better understand the online demand for labor,
The Conference Board created its first measure
crucial to faster economic growth, these studies
are increasingly followed by both business strategists
and government policymakers.
The Conference Board’s long-standing reputation
for accuracy was again fortified when the Wall Street
Journal named Conference Board Executive Vice
President and Chief Economist Gail Fosler one of the
nation’s two most accurate forecasters of inflation.
Previously, the Journal has twice named Fosler the
most accurate forecaster for the U.S. economy overall.
Rising Impact in Europe and Asia-Pacific
Our meetings in Europe this year featured a score of
distinguished business leaders. Among them: François
Cornélis, Vice Chairman of the Executive Committee
and Executive Vice President of Total SA, and a Global
2005 annual report the conference board 15

Counsellor of The Conference Board; and Guy Quaden,
Governor of the National Bank of Belgium. Also
Bertrand Collomb, Chairman of the Board of Directors of
Lafarge, and a Global Counsellor of The Conference
Board; and Baudouin Prot, CEO of BNP Paribas. All
told, more
than 1,000 senior executives participated in a variety
of meetings in Europe.
At a special dinner of The Conference Board’s
Trustees and Global Counsellors — hosted in Enniskerry,
Ireland, by The Bank of Ireland — guests included more
than 100 business leaders. Mary Harney, Ireland’s Deputy
Prime Minister, spoke, as did Conference Board Chairman
Niall FitzGerald.
Also in Enniskerry, a meeting of The Conference
Board’s Global Advisory Council attracted an equally
impressive group of chief executives representing global
The Conference Board Europe is undertaking
major new research projects that will have an impact
on both business and government decision making.
We are working with the European Commission’s
Directorate-General for Employment, Social Affairs
and Equal Opportunities to prepare a major report
and pan-European conference on the business case
for diversity. Some 32 European companies have been
identified as strong case studies for this project.
Growing numbers of senior executives are also
participating in The Conference Board’s knowledgebuilding
programs throughout the Asia-Pacific region.
More than 400 executives in Asia-Pacific are now members
of Conference Board councils and working groups,
and speak and attend briefings and conferences. They
actively participate in research projects of The
Conference Board. And high-level business events in
“There is much more that unites America and Europe than divides them.”
Niall FitzGerald kbe
Chairman, The Conference Board
Chairman, Reuters Group plc
enterprises. The meeting — co-chaired by Kees Storm,
Member of the Supervisory Board of AEGON N.V., and
former Federal Reserve Chairman Paul Volcker — included
Irish Prime Minister Bertie Ahern, Viscount Etienne
Davignon, Thomas L. Friedman of the New York Times,
Nobel Prize-winning economist Douglass C. North
and Mario Monti, the European Commission’s former
Commissioner for Competition.
Another major business forum, in Brussels, focused
on new ways companies are building sustainable enterprises.
The keynoter was Liam O’Mahony, Group Chief
Executive of CRH. Irish Prime Minister Bertie Ahern told
the group that Ireland’s dynamic economic growth owes
much to the close collaboration between government,
business and trade unions, which he said is “the unique
ingredient in the Irish mix.”
Hong Kong, Singapore, Shanghai, Manila and Mumbai
have attracted senior executives from China, India and
other parts of Asia-Pacific — as well as from Australia,
Germany, Mexico, Switzerland and the United States.
The Conference Board’s close relationships with
leading Chinese companies, government agencies and
economic authorities led to a signature accomplishment
this year: the creation of The Conference Board
China Center for Business and Economics. Located in
New York and Beijing, the Center’s strategic aim is to
build bridges between business executives and government
policymakers, and spur collaboration between
the public and private sectors. The Center — co-chaired
by former Federal Reserve Chair Paul Volcker and Chen
Yuan, Governor of the China Development Bank —
is already becoming a unique repository of knowledge
16 the conference board 2005 annual report

Bertrand Collomb
Chairman, Lafarge
Global Counsellor since 2004
Invitational forum at the
Paris Chamber of Commerce
and Industry
March 2005
At a briefing in Paris this spring, more
than 200 business leaders gathered
to discuss the economic relationship
between the U.S. and Europe in the
face of recent political tensions
between the two. Collomb expressed
his hope that Europe would play a
calm, stable and constructive role in
its discussions with the U.S. and
work purposefully towards successful
globalization and world development.
India CEO Forum
April 2005
Mumbai
As The Conference Board continues to expand its role in India, growing
numbers of leading companies and multinationals across a range
of industries are participating in our activities. Last April in Mumbai,
a special event sponsored by Reliance Industries, Tata Consultancy
Services and Jindal Group attracted more than 60 top executives.
CEOs from India shared their experiences as emerging global leaders in
the business marketplace, focusing on business ethics and governance,
managing cross-cultural diversity and corporate leadership.

Left to right
Jeffrey A. Garten Juan Trippe Professor of International Trade, Finance
and Business, Yale School of Management
Harry M. Jansen Kraemer Executive Partner, Madison Dearborn
Julie Kraemer
Experienced business leaders and academic experts gather at forums
of The Conference Board to discuss issues of common concern. Among
those assembled in Ireland early this summer for The Conference Board
Members’ Dinner were Trustees Jeffrey Garten of Yale and Harry Kraemer
of Madison Dearborn, who are joined here by Julie Kraemer.
Ron Brown Award ceremony
November 2004
The White House, Washington, D.C.
Left to right
Michael Brown and Alma Brown
Donald L. Evans U.S. Secretary of Commerce
David J. Manning Senior VP, Corporate Affairs, Keyspan
Bill Harrison Chairman and CEO, J.P. Morgan Chase
Pamela Adamo VP, Public Affairs, KeySpan
Kerry Bradley COO, Luxottica Retail
Fully funded by the private sector,
the Ron Brown Award for Corporate
Leadership is the only Presidential
Award recognizing companies for
outstanding achievements in employee
and community relations. At this year’s
White House ceremony, U.S. Commerce
Secretary Donald Evans presented the
Award to J.P. Morgan Chase, KeySpan
Corporation and Luxottica Retail

about the Chinese economy. And it is a focal point for
government and business leaders to examine China’s
future and its growing impact on the global economy.
Founding corporate members of the Center include
Agilent Technologies Foundation, Bekaert, DBS Bank,
Campbell Soup, Caterpillar, China Development Bank,
Deloitte & Touche, General Electric, Reuters and
PricewaterhouseCoopers.
Outsourcing, Diversity and an
Aging Workforce: Critical Issues
In addition to launching an ongoing series of outsourcing
and offshoring studies this year, The Conference
Board held an increasing number of meetings to keep
executives informed on these crucial issues. In an
effort spearheaded by The Conference Board’s offshoring
specialist, Ton Heijmen, executives are being cautioned
“We should spend less time trying to protect the jobs where we’re not
competitive and more time investing in our educational systems to make
sure that we can, in fact, adapt to a changing global environment.”
Erroll B. Davis
Chairman, Alliant Energy
to weigh all the costs and benefits of offshoring —
economic and social. Our studies reveal step-by-step
measures to determine if, and when, offshoring makes
economic and social sense. They warn that some offshoring
ventures continue to be plagued with high
failure rates and merit increased scrutiny.
Long a leader in championing diversity as a profitable
business strategy, The Conference Board counts
more than 550 HR executives (including 250 diversity
executives) among its council members. We created
one new diversity council this past year, and worldwide
diversity leaders participated in seven conferences
focusing on leadership issues.
In May, our U.S. council division hosted a joint
meeting of the seven work-life and diversity councils
from Europe, the United States and Canada. Nearly
100 council members and speakers came together to
gain a better understanding of different regional
approaches to these issues, and are now working to
leverage collective insights from the meeting to
improve diversity and work-life practices globally.
The Conference Board has also become a valued
source of intelligence on strategies for managing a
maturing workforce. We held briefings in six major U.S.
cities to examine changing demographics and the
impact they are having on company human resources
strategies. These were led by Conference Board economist
and research director Linda Barrington and Jeri
Sedlar, The Conference Board’s senior advisor on the
maturing workforce.
“Energy and healthcare are among the industries
now feeling the crunch as their workforces grow older
and begin to retire,” notes Barrington. “Our briefings
focus on what all companies can learn from the pioneering
work being done in these industries to deal with
succession planning, retaining essential workers and
transferring knowledge from older to younger workers.”
Research Working Groups:
Action Networks for Executives
Designed by The Conference Board to help executives
probe more deeply into the latest management concepts
and economic shifts, our research working groups create
opportunities for members to participate directly in
the work of The Conference Board. To ensure that every
executive’s voice is heard, these high-level, tightly-knit
forums are limited to groups of 15–20 executives, who
meet in person and online.
Working group meetings during the last year
addressed employee engagement and commitment;
how to align performance measures with business
2005 annual report the conference board 19

objectives and strategic workforce planning. Also
underway are working groups on human capital strategy
and measurement; the financial and operational aspects
of offshoring; executive compensation consulting; managing
mature workers; consumer-driven healthcare;
and change management. Helping The Conference Board
identify major research themes were working groups
on corporate ctizenship in China; Asia-Pacific leadership
development; and environmental, social and governance
risk factors.
Webcasts Put More Knowledge at More Desks
The Conference Board’s Webcast offerings are expanding
dramatically, to satisfy growing executive demand for
business knowledge delivered right now, in real time.
These online meetings were an instant hit among executives
all over the world. All told, 41 Webcasts delivered
of services being channeled through our Web pages.
That was more than double the amount recorded last
year. And the number of visitors to Conference Board
pages jumped 25 percent to almost two million.
Our Web team (assisted by our Publishing group,
Council Program and Global Corporate Citizenship
Research Group) was a major resource in helping member
companies respond to the devastating impact of
the tsunami in Asia. The Conference Board established
widely used bulletin boards and a special post-tsunami
Web page that helped our members respond, and contribute,
to victims of this disaster.
The Conference Board Web site has become an
around-the-clock knowledge network, linking executives
both to new ideas and to each other. As executives
seek to negotiate twists and turns in the global economy,
many of them look to The Conference Board to
“If you come away from a meeting with one good idea, one new relationship
or one new understanding, then that meeting was successful.”
Richard E. Cavanagh
President and CEO, The Conference Board
the latest economic and management intelligence to
hundreds of senior executives.
Featuring experts from The Conference Board
and other major organizations, Webcasts brought executives
up to date on doing business in China, consumer
attitudes and spending plans, outsourcing, diversity
practices, privacy, corporate citizenship and global
grantmaking. Other sessions covered corporate security,
executive compensation and business ethics.
Due to rising demand, we will launch a new series
of Webcasts in the coming months. The only equipment
needed: a telephone and a computer.
A Breakthrough Year for
The Conference Board Online
Improved navigation and easy access triggered record
Web revenues this year, with more than $8 million worth
provide economic and management road maps that
they can’t find anywhere else. Our Web site is but one
of the many ways The Conference Board is building
a community to help executives learn, lead and excel
around the world.
Says Nandan Nilekani, CEO of fast-growing Infosys
and a Trustee of The Conference Board: “A bend in the
road is not the end of the road, unless you fail to make
the turn. For business leaders, the key is to identify the
bend in the road very early, to prepare changes in
strategy. The Conference Board provides a world-class
forum for business leaders to discuss new trends and
burning issues. It helps evolve practices and standards
that enable the smooth functioning of markets. Most
importantly, The Conference Board’s work enables us
to share and understand best practices across industries,
countries and corporations.”
20 the conference board 2005 annual report

Products & Services
Knowledge When You Need It.
CORPORATE
CITIZENSHIP
research
Research Reports
Corporate Citizenship Reporting:
Best Practices
2004 Corporate Contributions
Also available in PowerPresentation format
Executive Action series
Can U.S. Corporations Change
the Way People Think About
America?
Committed Management Builds
Sustainable Enterprises in
Europe
Corporate Contributions:
A Look at the Numbers
Navigating the Tsunami
Relief Effort
meetings
Conferences
Business and Sustainability
New York
Corporate Community
Involvement New York
Global Corporate Citizenship
New York
Other face-to-face forums
Building Sustainable Enterprises
Forum Brussels
Global Corporate Citizenship
Seminar New York
Global Values Breakfast
Roundtable New York
Webcasts
Company Programs to
Ease Offshoring Impact
Contributions Report Briefing
Using Technology to Enhance
Your Grantmaking Due Diligence
measure of success series
Best Practices in Corporate
Citizenship Reporting
Measurement as a Management
Tool for Corporate Citizenship
Measurement Schemes
for Corporate Citizenship
Performance
Councils
Business/Education Council
Anne L. Bryant National School
Boards Association
Charlotte K. Frank The McGraw-Hill
Companies
Chief EH&S Officers’ Council I
Arthur J. Gibson Home Depot Inc.
Chief EH&S Officers’ Council II
Yvon Beauregard Bombardier Inc.
Community and
Public Issues Council
Jerry W. Glazier Sprint
Contributions Council
Kathleen W. Buechel Alcoa Inc.
Christine Park Lucent Technologies
Foundation
Contributions Council II
Lucia E. Kos Edison International
Environment, Health &
Safety Legal Council
Peter Etienne Baxter International Inc.
European Council on Environment
and Product Stewardship
Urban Jacobsson ExxonMobil
Chemical Europe Inc.
European Council on
Health and Safety
John Lyons O2 plc
European Working Group and
Council on Corporate Citizenship
Health and Safety Council
CORPORATE
GOVERNANCE/
ETHICS/
COMPLIANCE
research
Research Reports
corporate/investor summit series
Future of the Annual
General Meeting
Improving Communications
Between Companies and
Investors
Directors’ Compensation
and Board Practices in 2004
Also available in Executive Summary and
PowerPresentation formats
Corporate Governance Handbook
2005: Developments in Best
Practices, Compliance, and Legal
Standards
Web edition
Executive Action series
Conducting Independent
Investigations
Evolving Role of the Board in
CEO and Senior “Back Bench”
Succession
How Prepared Are Companies
for the Revised Sentencing
Guidelines?
Minimizing Risk and Maintaining
Ethics in Asia–Pacific
Reaching the Goal Line on
Good Governance
Strategy Struggles in the
Boardroom
Succession Planning —
Without Tears
Using Ethical Analysis to
Guide Offshoring
Why Ethical Leaders Are
Different
meetings
Conferences
Antitrust New York
Business Ethics New York
directors’ institute
Directors’ Institute Roundtable
Forum New York (2)
Other face-to-face forums
Audit Committee Executives
Workshop New York (3)
Business Ethics Seminar
New York (4)
Corporate Governance
Executives Workshop New York (3)
Corporate Governance
Self-Assessment Workshop
Chicago, New York, San Francisco
Corporate/Investor Summit
Wilmington, DE
Webcasts
Compliance and Ethics Programs:
Directors’ Cut
Executive Briefing on Compliance
and Ethics Programs
Nonprofit Organization Ethics
Guidelines: Setting and Verifying
Standards for Good Practice
Outsourcing and Internal Controls:
A Sarbanes-Oxley Update
Successful Building of Ethics
and Compliance Programs
Tone at the Top: Why Directors
Should Be Concerned with Ethics
and Culture
Councils
Asia Council on Business Conduct
Council on Corporate Compliance
Marjorie W. Doyle E.I. du Pont de Nemours
and Company, Inc
Council on Corporate Governance
European Council on
Corporate Governance and
Board Effectiveness
Folkert Schukken
European Council on
Investor Relations
Dries Ausems DSM N.V.
Marco E. Peyron Banca Nazionale Del
Lavoro SPA
Eliane Rouyer Accor
Wolfram Schmitt Deutsche Bank AG
Global Council on
Business Conduct
James D. Berg International Paper Company
ECONOMICS
research
Research Reports
Performance 2005:
Productivity, Employment, and
Income in the Worlds’ Economies
Also available in PowerPresentation format
The Retail Revolution:
Can Europe Match U.S.
Productivity Performance?
(Perspectives on a Global Economy series)
Also available in PowerPresentation format
Executive Action series
Asia’s New Era of Opportunity
EU Labor Productivity and
Employment Improve in 2004—
but U.S. Still Leads
2005 annual report the conference board 21

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

products & services
products & services
HR’s Contribution to Innovation:
Fostering New Products and
Services with HR Systems
Linking Business Strategy
with People and Metrics:
A Framework for Successful
Implementation
Managing Diversity
Measuring More Than Efficiency:
The New Role in Human Capital
Metrics
Councils
Advisory Council on Human
Resources Management
Patricia A. Barnard Georgia-Pacific
Corporation
Miles B. King Toyota Motor Sales, U.S.A., Inc.
Colon S. McLean Duke Energy Corporation
Council on Compensation
William J. Cahill FedEx Corporation
David A. Loucks Procter & Gamble
Company
Mark L. Nagorka 3M Company
William T. Tompkins Gap, Inc.
Darla Whitaker Texas Instruments Inc.
Council on Compensation II
Miles W. Meyer Kellogg Company
Council on Development,
Education & Training
Tamar Elkeles QUALCOMM, Inc.
Michael A. Hopp Lockheed Martin
Corporation
Robert C. Reindl Edwards Lifesciences
Corporation
Kevin D. Wilde General Mills, Inc.
Council of Diversity Executives
Council for Division Leaders –
Human Resources
Francis J. Hyatt Wausau Insurance Company
Michael L. Meyer Abbott Laboratories
Peter Wentworth Pfizer Consumer
Healthcare
Council for Division Leaders –
Human Resources II
RoJean DeChantal Dunkin Brands Inc.
Michael Procida Ford Motor Company
Patricia Rowell American Express Company
Teresa Smiley CNA Insurance
Council on Employee Healthcare
Council on Executive Coaching
William H. Hodgetts Fidelity Investments
Council on Executive
Compensation
Michael L. Davis General Mills, Inc.
David O. Eng American Express Company
Cynthia Heath Emerson Electric Co.
Jeffrey R. Sampson The Goodyear Tire &
Rubber Company
Council of Human
Resources Executives
Lawrence J. Krema Equity Office
Properties Trust
Richard A. Lamond Spherion Corporation
Sally A. Savoia Praxair, Inc.
Council on International
Compensation and Benefits
Rhonda Gold Bristol-Myers Squibb Co.
Council on Learning,
Development & Organizational
Performance
Edward Betof Becton, Dickinson and
Company
Council for Mid-Market
Human Resources Executives –
Eastern Division
James L. Francis Swagelok Company
Carla S. Nussbaum Paragon Medical, Inc.
Mark P. Salsbury Markem Corporation
Gayle Schaumann Union Tank Car Company
Council for Mid-Market
Human Resources Executives –
Western Division
Robert Jones First Interstate BancSystem
Council of Talent
Management Executives
Catherine Cardona The World Bank
Council on Workforce Diversity
Deborah Dagit Merck & Co., Inc.
May E. Snowden Starbucks Corporation
Diversity Business Council
Canzata Castleberry-Singleton
Sun Microsystems, Inc.
Texanna M. Reeves Georgia-Pacific
Corporation
Diversity and Inclusion Council
Hayward L. Bell Raytheon Company
Karen Fowler-Williams Lincoln Financial
Group
Diversity and Inclusion
Strategy Council
Jeanne Myers Alliant Energy Corporation
Eduardo Salaz Intuit, Inc.
Employee Benefits Council
John F. Fitzgerald Sequa Corporation
European Council on
Compensation and Benefits
Donald Watson Hydro Aluminum ASA
Clive Wright Mercer Human Resource
Consulting
European Council on
Human Resources
Andy Jones Prudential plc
Joachim Kayser Deutsche Post World Net
European Council on Learning,
Leadership & Organisational
Development
European Council on
Work-Life and Diversity
Executive Compensation
Management Council
Dennis A. Kudla Abbott Laboratories
Global Human Resources
Management Council
Gaston Ouellet Alcan Inc.
Human Resources Council –
Asia-Pacific
Andrew Ditty BP Hong Kong Ltd.
Werner Krieger Henkel Asia-Pacific Ltd.
Charles A. Lim Procter & Gamble (Asia) Pte. Ltd.
Roy Massey CLP Holdings Ltd.
Rohana Weiler Agilent Technologies Malaysia
Human Resources Council – China
Lia Belilos Shell China Limited
Claire Forster Manulife Financial
Human Resources Council – India
Human Resources Council –
Mexico
Joaquín J. Salazar García
PricewaterhouseCoopers (México), S.C.
Leadership Development Council
Pensions Council
Neil McPherson Standard Life Investments Ltd.
William van Ettinger Masterfoods
Polish Council of Human
Resources Executives
Malgorzata Tomasik Ernst & Young
Research Council on
Employee Benefits
Scott Swasey Chevron Corporation
Work/Life Leadership Council
Maria S. Ferris IBM Corporation
Sharon A. Wilkie GlaxoSmithKline
MANAGEMENT /
OPERATIONS
research
Research Reports
Corporate Security Measures
and Practices: An Overview of
Corporate Security Management
Since 9/11
Effecting Change in Business
Enterprises: Current Trends in
Change Management
Also available in Executive Summary format
A Roadmap for Strategic Energy
Planning and Management
(Business and Energy in the 21st Century series)
Also available in PowerPresentation format
Executive Action series
Climate Change: Clear Trajectory,
Haze in the Details
Cops, Geeks, and Bean Counters:
The Clashing Cultures of Corporate
Security
Energy Management Goes
Strategic
The Future of Knowledge
Management
Improving Project Results:
Operating “Below the Line”
to Produce Real Value
Insourcing, Outsourcing,
and Offshoring
security in mid-market
companies series
Tackling the Challenge
The View from the Top
Working Group
Change Management
meetings
Conferences
E-Procurement Chicago
Logistics Fort Lauderdale
Purchasing New York
Radio Frequency Identification
Boston
Shared Services Bangalore, Barcelona,
Chicago
Supplier Relationship
Management Atlanta
Supply Chain Chicago
Other face-to-face forums
Board Briefing on Shared
Services Hong Kong, Manila
Polish Business Forum Warsaw
Polish Councils Breakfast Warsaw
Polish Councils Meeting Warsaw
Shared Services Seminar Chicago
Webcasts
Adopting a Global Privacy Policy
for the Transfer of Personal Data (2)
Compliance Systems:
Implementation/Costs/Benefits (2)
James R. Otieno Hewlett-Packard Company
2005 annual report the conference board 23

products & services
Legal Issues in Corporate
Security
An Outsourcing Primer: Defining
the Market and Understanding the
Evaluation Process
Restructuring and Renegotiations
in Outsourcing
Structuring and Negotiating the
Optimal Outsourcing Contract
Councils
Asia-Pacific Shared Services
Council
Michelle Cheung Henkel Asia Pacific Ltd.
Edward Kwong CLP Power Hong Kong
Limited
William Pfluger Caltex (Asia) Ltd
Business Performance
Improvement Council
Philip C. Forve Cargill
Sally J. Penley Weyerhaeuser Strategic
Resources
Council of Chief Legal Officers
Howard Malovany Wm. Wrigley Jr. Company
Council on Corporate
Travel Management
Ernest Guerra, Jr. American Standard
Companies
Stacey Taylor Tyco International
Council of Senior
International Attorneys
William D. Manson Lubrizol Corporation
Council of Shared Business
Services Executives
Thomas McGlinn Unisys Corporation
Council of Shared Business
Services Executives II
Earl K. Moore BHP Billiton
Council for Six Sigma Executives
Linda Gardner-Goos Wellmark Blue
Cross Blue Shield
Steven K. Randol U.S. Department
of the Army
Council for Six Sigma Executives II
Council on Supplier Diversity
Denise Coley Cisco Systems Inc.
Icy L. Williams Procter & Gamble Company
European Council on
Global Supply Chain
Peter D. Laurence Laboratories Serono S.A.
Arne Schmidt Novozymes A/S
European Council
on Legal Affairs
Alfred Gerber Sulzer Ltd
Erik Lagendijk AEGON N.V.
European Council on Purchasing
Michael Hellemann Novo Nordisk
Servicepartner A/S
Patrick Le Laouenan Sanofi-Aventis
European Council
on Shared Services
Michel de Zeeuw Philips International
Jos Verelst SKF European
Executive Council
Satyam C. Cherukuri Sarnoff Corporation
Global Business
Excellence Council
Paivi Suutari Stora Enso OYJ
Performance Excellence Council
J. Michael Bealle Union Pacific Railroad
Company
Ellen J. Gaucher Wellmark Blue Cross Blue
Shield of Iowa
Polish Council of
Chief Executive Officers
Purchasing and Supply
Leadership Council
Anthony S. Nieves Hilton Hotels
Corporation
Purchasing and Supply
Leadership Council II
John R. Gossmann, c.p.m Medtronic, Inc.
U.S. Quality Council
Leroy Boatwright Corning Incorporated
Steven H. Hoisington Johnson Controls, Inc.
MARKETING /
COMMUNICATIONS
research
Consumer Research Center reports
Demographic Information
Service: Household Income
Discretionary Spending
The Hispanic Market in 2010
Report and database
Executive Action series
Consumers Going Online
Before Going on the Road
Discretionary Income Trends:
An Overview
The Hispanic Market in 2010
meetings
Conferences
Business Intelligence Chicago
Corporate Communication New York
Corporate Communication
and Technology New York
Corporate Image New York
Customer Experience
Management New York
Customer Loyalty New York
Digital Marketing New York
Enterprise Risk and
Corporate Reputation Beijing
Global Marketing and
Communications Hong Kong
Marketing New York
Marketing Research Chicago
Sales Management Solutions
New York
Other face-to-face forums
Branding for Customer
Loyalty Seminar New York
Corporate Brand Management
Seminar Chicago (2)
Corporate Communication
Seminar New York (2)
Corporate Image and Branding
Seminar Chicago (2), New York (2)
Crisis Communication and
Management Seminar New York
Digital Marketing Seminar New York
Employee Communications
Seminar Chicago (2), New York (2)
Senior Marketing Executive
Roundtable Chicago (2), New York (2)
Webcasts
Eight Things Every Marketer
Needs to Know About the Luxury
Market (2)
Understanding the American
Consumer
Councils
Asia-Pacific Corporate
Communication Council
Asia-Pacific Marketing
Strategy Council
Corporate Communications
Development Group
Council on Corporate
Brand Management
Edward A. Faruolo CIGNA Corporation
Council on Corporate
Communications Strategy
Mark O. Bain Alticor Inc.
Laura B. Tew Arch Chemicals, Inc.
Council of Marketing Executives
Bruce E. Dell Lockwood Greene Engineers, Inc.
Council of Marketing Executives II
Mark Samuels SEI Investments Company
Council on Marketing Research
Chris Curtright United Parcel Service
European Council on Corporate
Communications
Katharina Auer AstraZeneca plc
Stefan Lorentzson Volvo
Polish Council of
Marketing Executives
Western Marketing
Research Council
Steve Meinzen John Deere
Vivian Millroy Callaway Pillsbury USA
Division of General Mills
STRATEGY /
FINANCE
research
Research Reports
ceo challenge series
CEO Challenge 2004:
Perspectives and Analysis
Also available in PowerPresentation format
CEO Challenge 2004:
Top 10 Challenges Executive Summary
Mid-Market CEO Challenge
Also available in Executive Summary and
PowerPresentation formats
Enterprise Risk
Management Systems:
Beyond the Balanced Scorecard
Also available in PowerPresentation format
From Risk Management
to Risk Strategy
Also available in PowerPresentation format
From Risk Management to
Risk Strategy: Mid-Markets
Also available in PowerPresentation format
thinking offshoring through series
Beyond Costs: Financial and
Operational Risks First in a 4-part series
Executive Action series
Beyond Compliance:
The Future of Risk Management
Business Is Evolving —
Just Not in the Way You Think
Going Global: The Challenges
Facing Indian Business
How CFOs Carve Out Time
for What Counts Most
24 the conference board 2005 annual report

products & services
products & services
on the record series
Alain Belda of Alcoa
Julien De Wilde of Bekaert
Nandan M. Nilekani of Infosys
Stan Shih of The Acer Group
Thinking Offshoring Though
meetings
Conferences
CEO Challenge Hong Kong, Shanghai (2)
Change Management New York
Corporate Security,
Business Continuity and
Crisis Management New York
Enterprise Learning Strategy
New York
Enterprise Risk Management
London, New York
Growth and Innovation New York
Post-Merger Integration New York
Strategic Alliances New York
Strategic Outsourcing New York
Strategic Spend Management
New York
Other face-to-face forums
Business Continuity, Security
and Crisis Management Seminar
New York (2), San Francisco (2)
Change Management Seminar
New York
Homeland Security Roundtable
Boston (2), Chicago, San Francisco (2)
Homeland Security Seminar
New York
Strategic Outsourcing Seminar
New York
Webcasts
Doing Business in China: Trading
Rights, Distribution Rights and
Commercial in China Post-WTO (2)
thinking offshoring through series
Beyond Costs: Financial and
Operational Risks
The New Corporate Reality:
External and Market Considerations
Organizing Offshore Operations:
Management and HR Concerns
Councils
Asia-Pacific Learning and
Knowledge Management Council
Controllers’ Council
Council for Business
Development and
Integration Executives
Randolph M. Croyle
The Dow Chemical Company
Council for CFEs of
Mid-Market Companies
Council of CFOs
Frank R. Gatti ETS
Council of Chief Audit Executives
Kimberly Parker Gavaletz Lockheed
Martin Corporation
Council of Chief Privacy Officers
Council of CIO Executives
Brandt R. Allen University of Virginia
Council on Competitive Analysis
Svetlana Shaknes Standard & Poor’s
Corporation
Council of Corporate
Security Executives
Timothy T. Janes Capital One Financial
Corporation
Council of Corporate Treasurers
Thomas C. Deas, Jr. FMC Corporation
Thomas W. Grein Eli Lilly and Company
Susan M. Kreh PPG Industries, Inc.
Cathie Lesjak Hewlett-Packard Company
Council for Division Leaders –
Financial Executives
David C. Walker GMAC Mortgage
Corporation
Council of Financial Executives
David B. Rickard CVS Corporation
European Council of Controllers
Bo Gustavsson AB Volvo
Robert H. Parkes Urenco Limited
Frank Vromant Bekaert S.A./N.V.
European Council on
Corporate Strategy
Hein Schreuder DSM N.V.
European Council
on e-Procurement
Paul Brackel Unilever N.V.
European Council on
Information Technology
Governance and Strategy
Patrick Arlequeeuw Procter & Gamble
Company
European Council on Innovation
Heidi Kleinbach Sara Lee / Coffee & Tea
Division
European Council on
Mergers & Acquisitions
Ulf Hoof ABB Asea Brown Boveri Ltd
European Council on
Strategic Manufacturing
Jochen Jacobs Henkel KGaA
Philippe Roodhooft Borealis Polymers NV
European Council on
Strategic Risk Management
European Tax Executives Council
Global Council of Investor
Relations Executives
Robert F. Drennan, Jr. Progress Energy, Inc.
Hungarian Council of
Finance Executives
Information Research and
Management Council
Learning and Knowledge
Management Council
James I. Mitnick Turner Construction
Company
Middle East Business
Leaders Council
Online Strategy Council
Thomas Hoehn Eastman Kodak Co.
Catherine M. Wilson Pfizer Inc
Polish Council of
Finance Executives
CONFERENCE
BOARD INITIATIVES
Magazine
Across the Board bimonthly
Annual Essay from the 2004 annual report
Building a Culture of Candor:
A Crucial Key to Leadership
by Warren Bennis
Newsletters
Board Asia quarterly
Board Europe bimonthly
Board News quarterly
E-mail Express biweekly
Meeting
2004 Annual Meeting New York
integrating acquisitions series
Building Core M&A Capabilities
A Contingency Framework and
Practical Lessons Learned
Offshoring, Outsourcing and
Growth Opportunities: What
Can We Learn from the Chinese
Experience?
William H. Hernandez PPG Industries, Inc.
Council on Innovation
Harold H. Schmitz Mars, Incorporated
Council of Strategic
Planning Executives
Richard J. Lunardi CNF Inc.
Council of Tax Executives
Norman B. Richter Textron Inc.
Council of Telecommunications
Executives
Thomas J. Marcin DuPont Company
Research Council on
Global Investment
P. Brett Hammond TIAA-CREF
Strategic Risk
Management Council
Tara Heusé Skinner Synovus
Financial Corp.
European Council of
Chief Financial Officers
Rudolf Zemp Maus Frères S.A.
2005 annual report the conference board 25

annual essay
Corporate Leadership in an Uncertain World
by douglass c. north
Douglass C. North, co-recipient
of the 1993 Nobel Prize in Economic
Science, is the Spencer T. Olin
Professor in Arts and Sciences at
Washington University. Dr. North
is a member of the American
Academy of Arts and Sciences and
a Fellow of the British Academy.
He is a frequent advisor to the World
Bank and to countries around the
world on issues of economic growth.
The evolution of Dr. North’s wideranging
research interests in economic
institutions and economic change
is expressed in ten books, including
Institutions, Institutional Change and
Economic Performance (Cambridge
University Press, 1990) and Understanding
the Process of Economic
Change (Princeton University Press,
2005).
The Annual Essay
Each year, The Conference Board
publishes in its Annual Report an
original and timely commentary by
a leading economic or management
thought leader. Past essayists have
included Warren Bennis, Jim Collins,
Peter Drucker, Dale Jorgenson and
Paul Volcker.
Does understanding how a political-economic
system functions help us to understand how
a business organization within that system
functions? The answer is clearly yes. In both cases,
structures are created to organize markets; the efficiency
of the resulting exchange will determine performance,
whether of the economy as a whole or of
the individual enterprise. Businesses are themselves
concentrated institutional structures that, like the
markets they operate in, are always fine-tuning their
organizations to perceive the world more accurately
and to evolve strategies that help them perform. In
short, businesses, like economies, organize labor,
develop incentive structures, apply knowledge and
technology, and monitor their own performance.
Also, in the complex interdependent world
we have created, efficient business organization is
intimately tied to the performance of the overall
economy. But we only imperfectly understand the
very complex nature of economic systems and
the way they change. To improve that understanding
and leverage it into institutions and their policies is
the intellectual task of the economist. The practical
challenge of the business leader is to enable this
improved understanding to permeate the business
organization in such a way that the organization uses
it most effectively in a constantly changing world.
What is required is a deeper understanding of
1) how the mind interprets the external environment
and 2) the process of decision making in a nonergodic
world — that is, a world that is evolving in
new and novel ways and at an unprecedented pace.
Let us explore each issue.
First, by what means does any of us understand
the external environment? The senses — eyes, ears,
nose, and feel — send signals to the brain, which then
constructs an interpretation of the external environment.
This interpretation is reinforced or weakened
as the senses provide additional signals consistent
with it or at odds with it. Our beliefs are subjective
interpretations made possible by the impressive
development in humans of larger brains, language,
and consciousness — that is, self-awareness of ourselves
in time and space. The result is elaborate
belief systems that explain where we are in time
and space. Explanations — theories — account for our
current environment and how we got there. But they
are subjective and at best only partly correct.
In fact, history shows that our theories have
been wrong more often than right, resulting in the
demise of whole civilizations when we have misinterpreted
what is happening to us. Given that only a small
percentage of businesses around today were also
present 20 or even 10 years ago, survival is a threshold
challenge for businesses as well. We improve our
chances of survival by continually developing better
theories, grounded in empirical evidence of the everchanging
environment. Survival depends on a complex
institutional structure that will provide the correct
incentives for humans to continue to evaluate their
surroundings critically and undertake the necessary
changes when the evidence derived from additional
information suggests the need for revision.
There is no guarantee that the essential institutional
structure will, in fact, evolve. Indeed, throughout
history, societies have disintegrated because they
have failed to create such a framework. The rise and
fall of the Soviet Union is the most recent dramatic
illustration. I believe that the same issues are applicable
to business organization and how it changes.
The second issue is that it is a non-ergodic world.
If the world we are trying to understand remained
constant and unchanging, then the lessons from past
experience would serve as a guide to future choices.
And, indeed, much of the theory developed in the social
sciences assumes such a static environment. But if
we human beings are continually modifying our external
environment, the lessons from the past would
help us solve future problems only to the extent these
problems are similar to those of the past. Many of
them are; but we are also creating new and novel
worlds unlike anything in the past, and understanding
what is happening to us is essential for our continual
survival. How should we deal with such uncertainty?
We can get some clues by looking at how humans
have confronted uncertainty in the past.
Lessons from History
Throughout most of the human experience, the
uncertainty humans have faced has been a consequence
of the physical environment. Climate,
weather, and earthquakes were the primary sources
26 the conference board 2005 annual report

of uncertainty to be overcome or at least contained.
The development of agriculture some ten millennia
ago was a major breakthrough because it permitted
humans to expand the resource base rather than,
as hunter/gatherers, simply exploit the existing one.
The result was the creation of civilization as we know
it. But the consequent political, economic, and social
structure that evolved became ever more complicated,
and the uncertainties of human interaction — the
human environment — replaced those of the physical
environment as the most significant.
These uncertainties arise from transaction
costs, which are the costs involved in human interaction,
specifically the costs of measuring what is
being exchanged and of enforcing agreements. That
rather innocuous-sounding assertion is at the heart
Everything economists have learned since then
reinforces this assertion.
Impersonal exchange — exchange between parties
with no knowledge of each other and occurring
over time and space — not only runs counter to
innate genetic features of humans that evolved over
the several million years that humans were hunter/
gatherers; it also is simply an open invitation to fraud,
cheating, and corrupt practices. In fact, in the absence
of the essential institutional safeguards, impersonal
exchange does not exist except in cases where strong
ethnic or religious ties make reputation a viable underpinning.
What is required is a political institutional structure
that will put in place the rule of law and the necessary
enforcement structure. The need to establish
We are creating new and novel worlds unlike anything
in the past, and understanding what is happening to us is
essential for our continual survival.
of the problems of economic efficiency. Throughout
most of history, exchange has been based on personal
knowledge of the other party. Reputation and
repeat dealings have been the basis for confidence
that the exchange would be lived up to in terms of
both the quantity and the quality of the good or service
exchanged and that the agreement would be executed
in accordance with the understanding of both
parties. Transaction costs in such cases were small.
But also, markets were of necessity small.
As long-distance trade expanded in the Middle
Ages, the difficulties of exchange between parties
that did not know each other posed fundamental
transaction cost problems. At the champagne fairs in
France in the twelfth century, one merchant was
designated to collect information on the reliability of
the merchants attending the fair; when contemplating
an exchange that was not instantaneous, a merchant
would seek advice from the designated merchant on
the reliability of the other party. But extending personal
knowledge by such devices has limits with respect
to the size of markets. And Adam Smith, the patron
saint of economists, was unequivocal in his assertion
that specialization, division of labor, and the size of
markets are the source of the wealth of nations.
such a framework to guide business is at the core of
why issues of transparency and corporate governance
are so important. But the fact that such a framework
must substitute effectively for the “trust” that comes
with personal exchange means that establishing it
entails a fundamental overhaul of both the economic
and the political institutions. The failure to create the
essential institutional base is the central problem of
economic development.
Institutions and Economic Performance
Institutions structure human interaction. They are
the incentive structure of a society and are designed
to reduce the uncertainties of those players in a
position to alter them. To understand the role of institutions
in a society, we need to explore what they
are, who designs them, and why they always work
imperfectly.
Institutions are made up of formal rules and
informal constraints, along with enforcement
mechanisms for both. Formal rules are laws, rules,
2005 annual report the conference board 27

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

frequently copied the U.S. Constitution, but absent
the informal rules and enforcement that had evolved
during the American colonial experience, the results
were a half-century of recurrent civil war and subsequent
instability.
The propitious character of early U.S. development
explains how, with good fortune, we got it right
to begin with. It does not explain the successful
subsequent dynamic development as this country
evolved from a rural small-scale society of about
5 million to a rich urban superpower of almost 300
million. Have we always known what we are doing?
Clearly not, as miscues like the Civil War, one of the
most costly and deadly wars in history, attest.
(However, the historical heritage had created an
institutional framework that produced rapid recovery,
and today the South is a dynamic partner in the
The structures of both society and
the business organization must
enable uncertainty to be incorporated
into decision making.
overall economy.) We have made many mistakes
and still do. Indeed, the very nature of a non-ergodic
world assures you that will happen.
But contrast the U.S. story with the history of
the Soviet Union. The institutional framework of the
former created an adaptively efficient structure,
while the latter was rigidly constrained. The former
encouraged trial-and-error experimentation, the
latter did not. The development of an open access
society — one that encourages entry into political
and economic markets — creates an institutional
framework that encourages such experimentation
in the face of the uncertainties of novel change.
The Soviet Union, founded on a set of beliefs that
“knew the truth,” could make only superficial reforms
in the face of increasing stagnation. Both societies
were constrained by their heritage, which determined
the flexibility of the resulting institutional structure.
Open-access societies confronted with uncertainty
will produce an adaptively efficient structure.
But it should be carefully noted that there is no guarantee
that open-access societies will remain that
way. The pervasive search for security in a competitive
environment will encourage attempts to create
monopoly, which if successful will dry up the wellsprings
of adaptive efficiency.
Business Organization and
Adaptive Efficiency
How much of this is relevant to modern business
organization? Clearly, the dynamic success of the
overall economy plays a critical role in the opportunity
set of an individual enterprise. But more than that,
the individual enterprise in a dynamic world is similarly
confronted by uncertainty and must make choices
that can be guided only partially by past experience.
All the sources of uncertainty for an evolving economy
are equally important for an individual enterprise —
changes in information costs, technology, and competitive
conditions. And all the sources of imperfect
choices in devising institutions to deal with evolving
uncertainty are equally applicable to the individual
enterprise.
The constructions humans create to confront
novel change in the overall economy or in individual
markets require making choices in the face of uncertainty,
and success is dependent on an adaptively
efficient approach. In the case of the overall economy,
improving the chances of successful survival depends
on an institutional structure that:
1. creates a hierarchy in which the decisionmaking
entrepreneurs have the interest of
the economy as a whole, rather than their
own private interest, at heart;
2. is adaptively efficient, encouraging experimentation
in the face of the uncertainty that results
from confronting new and novel problems; and
3. evolves decision mechanisms that reward
success — and eliminate failures — arising
from trial-and-error experimentation.
So, too, in the case of the individual enterprise,
improving the chances of success depends on an
organizational structure that:
1. creates entrepreneurs with a concern for
the welfare of the overall enterprise;
2. is adaptively efficient, enabling the organization
to learn, assimilate information, and adjust the
organizational structure in the face of uncertainty
and continuous novel change; and
3. develops incentives that reward success
and mechanisms that eliminate failures that
will inevitably occur — especially as a result
of innovation — in a non-ergodic world.
2005 annual report the conference board 29

Financials
statements of financial position (in us$
Assets
thousands)
June 30
2005 2004
Cash and cash equivalents $ 6,803 $ 5,893
Accrued interest receivable 116 81
Accounts receivable 5,445 5,929
Investments, at fair value 19,600 18,005
Securities purchased not yet settled 2,145 –
Deferred charges and sundry assets 1,551 1,343
Pension asset 6,956 5,488
Furniture, equipment, software, and leasehold improvements—
at cost, less depreciation and amortization 2,547 2,879
Total Assets $ 45,163 $ 39,618
Liabilities and Net Assets
Accounts payable and accrued liabilities $ 7,597 $ 5,971
Advance payments and deferred revenue 9,733 8,767
Deferred subscription revenue 8,588 8,353
Due to broker 2,145 –
Post-retirement benefit obligation 3,203 3,054
Total Liabilities 31,266 26,145
Net Assets
Unrestricted 13,810 13,295
Temporarily restricted 87 178
Total Net Assets 13,897 13,473
Total Liabilities and Net Assets $ 45,163 $ 39,618
Note: The information on pages 30 and 31 was extracted from the Financial Statements
audited by Ernst & Young llp. These statements are available upon request.
30 the conference board 2005 annual report

financials
statements of activities (in us$ thousands)
Year ended June 30
2005 2004
Operating Revenue
Subscriptions $15,942 $ 14,937
Conferences, councils, and meetings 29,550 25,991
Grants, contracts, and fee-based services 4,327 4,629
Sale of publications 391 380
Other income* 618 462
Total Operating Revenue 50,828 46,399
Operating Expenses
Compensation 24,021 22,803
Purchased services 9,032 7,693
Travel 1,775 1,594
Meeting location costs 6,095 5,183
Printing, postage, and supplies 4,232 3,811
Depreciation and amortization 771 932
Facilities 3,042 2,977
Other expenses 1,543 1,156
Total Operating Expenses 50,511 46,149
Excess of Revenue from Recurring Operations 317 250
Other Activities
Nonrecurring legal expenses (579) –
Interest, dividends, and other income 261 168
Realized gain on disposal of investments 396 414
Unrealized gain in the fair value of investments 55 904
Effect of foreign currency translation (35) (21)
Transfer of temporarily restricted net assets to unrestricted net assets 100 –
Change in unrestricted net assets 515 1,715
Change in temporarily restricted net assets (91) 9
Change in net assets 424 1,724
Net assets as of the beginning of the year 13,473 11,749
Net Assets as of the End of the Year $ 13,897 $ 13,473
* Includes $337,000 and $68,000 in 2005 and 2004,
respectively, of Operating Fund investment income.
2005 annual report the conference board 31

Global Counsellors
asia/pacific
Australia
Linda Bardo Nicholls
Chairman
Australia Post
John B. Prescott, a.c. 3
Chairman
Australian Submarine
Corporation Pty Ltd
John B. Reid, a.o. 3
Chairman Emeritus
Australian Graduate School
of Management
University of New South Wales
China
Jing Shuping 1
Chairman of the
Board of Directors
Minsheng Banking Corporation
Hong Kong
Andrew C. W. Brandler 2
Group Managing Director
and CEO
CLP Holdings Ltd.
Marjorie Yang
Chairman
Esquel Group of Companies
India
Mukesh D. Ambani 4
Chairman and Managing Director
Reliance Industries Ltd.
Nandan M. Nilekani 4
Chief Executive Officer,
President and Managing Director
Infosys Technologies Limited
Malaysia
Dato’ Tan Teong Hean
Chief Executive Director
Southern Bank Berhad
Philippines
Roberto F. de Ocampo
President
Asian Institute of Management
Oscar M. Lopez
Chairman and
Chief Executive Officer
First Philippine Holdings
Corporation
Washington Z. SyCip 3-4
Founder
The SGV Group
Singapore
S. Dhanabalan
Chairman
Temasek Holdings (Pte) Ltd.
Koh Boon Hwee 2
Chairman
Singapore Airlines Ltd.
Lim Chee Onn 4
Executive Chairman
Keppel Corporation Limited
middle east
Egypt
M. Shafik Gabr
Chairman and Managing Director
ARTOC Group
Israel
Doron Tamir
Chairman
RDT Investments
Kuwait
Hisham Abdulrazzak Al-Razzuqi 2
Chief Executive Officer
Gulf Investment Corporation
Oman
Sayyid Khalid Bin Hamad
Al Bu Said 2
Chairman
Sabco l.l.c.
europe
Belgium
François M. G. Cornelis 4
Vice Chairman of the
Executive Committee and
Executive Vice President
TOTAL s.a.
Viscount Etienne Davignon 2
Vice Chairman
Suez-Tractebel s.a.
Julien De Wilde
Chief Executive Officer
N.V. Bekaert s.a.
Thomas Leysen
Chief Executive Officer
Umicore
Anton van Rossum
Member of the Board of Directors
Crédit Suisse Group
Karel Vinck
Chairman of the Board
Umicore
Denmark
Mads Øvlisen
Chairman of the Board
Novo Nordisk a/s
Jess Søderberg
Partner and CEO
A.P. Møller - Maersk Group
Peter Straarup
Chairman of the Executive Board
and the Executive Committee
Danske Bank as
Finland
Jukka Härmälä
President and CEO
Stora Enso
Ole Johansson
President and CEO
Wärtsilä Corporation
Mikael Lilius 4
President and CEO
Fortum Corporation
France
Philippe Camus
Co-Managing Partner
Lagardère
Bertrand Collomb 4
Chairman of the Group
Chairman of the Board of
Directors
LAFARGE
Henri Lachmann 1
Chairman and
Chief Executive Officer
Schneider Electric Industries sa
Gérard E. Worms 1
General Partner
Rothschild et Cie Banque
Germany
Josef Ackermann 4
Spokesman of the Board of
Managing Directors and
Chairman of the Group
Executive Committee
Deutsche Bank ag
Roland Berger
Chairman and Global
Managing Partner
Roland Berger Strategy
Consultants
Gerhard Cromme 4
Chairman of the
Supervisory Board
ThyssenKrupp ag
Michael Diekmann 4
Chairman of the
Management Board and CEO
Allianz ag
Klaus Kleinfeld
President and CEO
Siemens ag
Edward G. Krubasik
Executive Vice President and
Member of the Management
Board
Siemens ag
Jürgen E. Schrempp 1
Chairman of the Board of
Management and CEO
DaimlerChrysler ag
Greece
Yannis S. Costopoulos
Chairman of the Board of
Directors and CEO
Alpha Bank
Ireland
Liam O’Mahony
Group Chief Executive
CRH plc
Italy
Mario Monti 2-4
Chairman
Università Bocconi
Netherlands
Peter Bakker 2
Chief Executive Officer
TNT n.v.
Rijkman W. J. Groenink
Chairman of the Managing Board
ABN AMRO Bank n.v.
P. J. Kalff 3
Former Member of the
Supervisory Board
ABN AMRO Bank n.v..
Jonkheer Aarnout A. Loudon 3
Chairman of the
Supervisory Board
Akzo Nobel nv
Kees J. Storm 4
Member of the Supervisory Board
AEGON n.v.
Morris Tabaksblat 3-4
Retired Chairman and CEO
Unilever n.v.
C. J. A. van Lede 3
Member of the Supervisory Board
Akzo Nobel nv
Norway
Johan H. Andresen, Jr.
Owner and
Chief Executive Officer
Ferd Holding as
32 the conference board 2005 annual report

global counsellors
Poland
Maria Wišniewska
Vice President
Polish Confederation of
Private Employers
Spain
César Alierta Izuel 4
Chairman and
Chief Executive Officer
Telefónica s.a.
Patrick J. Cescau
Group Chief Executive
Unilever plc
Harald Einsmann
Executive Chairman of the Board
Findus a.b.
Niall FitzGerald KBE 4
Chairman
Reuters Group plc
Alain J. P. Belda 4
Chairman and CEO
Alcoa Inc.
Robert H. Benmosche 4
Chairman and CEO
Metropolitan Life Insurance Co.
Douglas R. Conant 4
President and CEO
Campbell Soup Company
Ellen R. Marram 3
Managing Director
North Castle Partners, l.lc.
W. Craig McClelland 3-4
Retired Chairman and CEO
Union Camp Corporation
Hutham S. Olayan 4
President and CEO
Olayan America Corporation
Isidro Fainé Casas
President and CEO
La Caixa
Lord Marshall of Knightsbridge 3
Chairman
Pirelli UK plc
Alfred C. DeCrane, Jr. 3
Retired Chairman and CEO
Texaco Inc.
James W. Owens 4
Chairman and CEO
Caterpillar Inc.
Francisco González Rodriguez 4
Chairman and CEO
BBVA
Sir Bryan Nicholson, GBE
Chairman
Financial Reporting Council
Robert E. Denham 3
Partner
Munger, Tolles & Olson llp
Donald K. Peterson 4
Chairman and CEO
Avaya, Inc.
Ignacio Sánchez Galán
Vice Chairman and CEO
Iberdrola s.a.
Sweden
Tom Johnstone
President and CEO
SKF ab
Lars G. Nordström
Group Chief Executive Officer
Nordea ab
Marcus Wallenberg 4
Chairman of the Board
SEB
Switzerland
Fritz F. Fahrni
Chairman
Innovation Management
and Logistics
Institute of Technology,
Management and
Entrepreneurship
University of St. Gallen
Turkey
Bülent Eçzaçibasi
Chairman
Eçzaçibasi Holding a.s.
Güler Sabanci
Chairman
Haci Ömer Sabanci Holding a.s.
United Kingdom
Sanjiv Ahuja 3
Chief Executive Officer
Orange s.a.
Lord Browne of Madingley 3
Group Chief Executive
BP p.l.c.
Sir Martin Sorrell
Group Chief Executive
WPP Group plc
Peter D. Sutherland 3
Chairman and Managing Director
Goldman Sachs International
André Villeneuve 4
Chairman
Euronext.liffe
latin america
Chile
Fernando Leniz 1
Chairman
ANAGRA s.a.
Mexico
Dionisio Garza Medina
Chairman of the Board and CEO
Alfa Corporativo, s.a. de c.v.
Tomás González Sada
Chairman of the Board,
President, and CEO
Grupo Cydsa, s.a. de c.v.
Federico Sada
Chief Executive Officer
Grupo Vitro
Panama
Stanley A. Motta
Chairman
Banco Continental de Panama
north america
United States
Paul M. Anderson
Chairman and CEO
Duke Energy Corporation
Livio D. DeSimone 3
Retired Chairman and CEO
3M Company
Samuel A. DiPiazza, Jr. 4
Chief Executive Officer
PricewaterhouseCoopers llp
Laurence D. Fink 4
Chairman and CEO
BlackRock, Inc.
Jacob A. Frenkel 4
Vice Chairman
Chairman, Global Economic
Strategies Group
American International Group, Inc.
Christina A. Gold 3
President
Western Union
John W. Johnstone, Jr. 3
Retired Chairman and CEO
Olin Corporation
Harry P. Kamen 3
Chairman of the Board
and CEO (Retired)
Metropolitan Life Insurance
Company
Harry M. Jansen Kraemer, Jr. 4
Executive Partner
Madison Dearborn
H. William Lichtenberger
Chairman
Noveon
Jane Cahill Pfeiffer 3
Management Consultant
Stephen W. Sanger 3
Chairman and CEO
General Mills, Inc.
Henry B. Schacht 3
Director and Senior Advisor
Lucent Technologies, Inc.
Anne M. Tatlock 4
Chairman and CEO
Fiduciary Trust Company
International
Paul A. Volcker 4
Former Chairman of
the Board of Governors
The Federal Reserve System
1 Until November 3, 2005
2 As of November 3, 2005
3 Former Trustee
4 Global Advisory Council Member
2005 annual report the conference board 33

Board of Trustees
chairman
vice chairmen
Niall FitzGerald kbe 1
Chairman
Reuters Group plc
Josef Ackermann
Spokesman of the Board of
Managing Directors and
Chairman of the Group
Executive Committee
Deutsche Bank ag
Douglas R. Conant
President and CEO
Campbell Soup Company
Harry M. Jansen
Kraemer, Jr.
Executive Partner
Madison Dearborn
Samuel A. DiPiazza, Jr. 2
Chief Executive Officer
PricewaterhouseCoopers llp
Nandan M. Nilekani
Chief Executive Officer,
President and Managing Director
Infosys Technologies Ltd.
Anne M. Tatlock
Chairman and CEO
Fiduciary Trust Company
International
members
Herbert M. Allison, Jr.
Chairman, President and CEO
TIAA-CREF
Alan M. Dachs
President and CEO
Fremont Group, l.l.c.
Rijkman W. J. Groenink
Chairman of the Managing Board
ABN AMRO Bank n.v.
Samuel C. Scott III
Chairman, President and CEO
Corn Products International, Inc.
Alain J. P. Belda
Chairman and CEO
Alcoa Inc.
Erroll B. Davis, Jr.
Chairman
Alliant Energy Corporation
Klaus Kleinfeld
President and CEO
Siemens ag
Stephen G. Snyder
President and CEO
TransAlta Corporation
Robert H. Benmosche
Chairman and CEO
Metropolitan Life Insurance Co.
Ian E. L. Davis
Managing Director
McKinsey & Company
Linda Bardo Nicholls
Chairman
Australia Post
Sir Martin Sorrell
Group Chief Executive
WPP Group plc
Stephanie A. Burns
President and CEO
Dow Corning Corporation
Richard E. Cavanagh
President and CEO
The Conference Board, Inc.
Patrick Cescau
Group Chief Executive
Unilever plc
Paul W. Chellgren
Retired Chairman of
the Board and CEO
Ashland Inc.
S. Dhanabalan
Chairman
Temasek Holdings (Pte) Ltd.
Jeffrey E. Garten
Juan Trippe Professor of
International Trade,
Finance and Business
Yale School of Management
Anne Golden
President and CEO
The Conference Board of
Canada
Hutham S. Olayan
President and CEO
Olayan America Corporation
Sharon Patrick 1
Former President and CEO
Martha Stewart Living
Omnimedia, Inc.
Edward B. Rust, Jr.
Chairman and CEO
State Farm Insurance Companies
Anton van Rossum
Member of the
Board of Directors
Crédit Suisse Group
Ronald A. Williams
President
Aetna Inc.
Marjorie Yang
Chairman
Esquel Group of Companies
1 Until November 3, 2005
2 As of November 3, 2005
34 the conference board 2005 annual report

Our Mission
The Conference Board creates and disseminates knowledge about management and the
marketplace to help businesses strengthen their performance and better serve society.
Working as a global, independent membership organization in the public interest,
we conduct research, convene conferences, make forecasts, assess trends, publish
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Milestones *
1916 Establishment of
The Conference Board as a
not-for-profit, nonpartisan
research and business membership
organization
1918 Conducts pioneering
research on working women
and safety in the workplace
1919 Establishes the first
continuous measure of the
cost of living across America
1920 Defines the eight-hour
workday
1926 Establishes the first
Conference Board Council of
Human Resources Executives
1940s Begins tracking directors’
compensation and corporate
contributions
1950s Begins ongoing
research on the impact of
the federal budget on the
U.S. and world economies
1951 The Help-Wanted
Advertising Index is launched
1967 Creates The
Conference Board Consumer
Confidence Index
1976 Establishes
The Conference Board
CEO Confidence Index
1980 Launches new research
on the practices of boards of
directors
1993 Establishes The
Conference Board Global
Corporate Governance
Research Center
1996 Assumes control of
the U.S. Leading Economic
Indicators from the U.S.
government
1997 Creates the Ron
Brown Award for Corporate
Leadership, the first presidential
award honoring companies
for outstanding
citizenship programs
1998 Holds its first major
meeting in India, bringing
together leaders from the
United States, Europe and
India
1999 Designs business
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United Kingdom, France,
Spain, Mexico, Australia
and Germany—that, along with
the United States, account
for two-thirds of global GDP
2000 The Conference Board
and the Asia Society form the
Asia Business Initiative, linking
business and government
leaders throughout Asia, the
United States and Europe
2001 Lord Marshall of
Knightsbridge (and CEO of
Britsh Airways) is elected
first non-U.S. Chairman of
Board of Trustees
2002 Convenes The
Conference Board
Commission on Public Trust
and Private Enterprise
2003 Launches the
Consumer Internet Barometer
2004 Establishes the
Directors’ Institute to provide
governance education for
directors serving on corporate
boards
2005 Creates The
Conference Board China
Center for Business and
Economics, which will be
based in Beijing and New
York, as a focal point for
knowledge and data on
the Chinese economy
*Milestone years are in
Conference Board fiscal years.
Communications Randall Poe,
Carol Courter
Creative Peter Drubin
Editors John Lumea, Timothy Dennison
Printing Thames Printing
Photography Marino Belich, Peter Drubin, Arthur
Krasinsky, Susan San Giovanni, John Harrington,
Jennie Zeiner, Warren Skalski photography, Brian Fox,
Icon Photography
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