Longtime Minnesota public company board chair called the 'CEO whisperer'

Mark Henneman, president of St. Paul investment firm Mairs & Power, calls Lee Mitau "the CEO whisperer."

Mitau, retired general counsel for U.S. Bank, is chair of two Minnesota manufacturers: Minneapolis-based Graco Inc. and St. Paul-based H.B. Fuller Co.

In that role, he helped hire the new chief executives at both companies — and their long-time, successful predecessors.

"It's probably more than a coincidence that two very fine performing companies with a couple of the greatest CEOs that we've actually seen, [were] under his watch," said Henneman, whose firm holds a big stake in both companies.

Henneman said he does not normally weigh who is board chair when evaluating a company. Mitau's involvement is an exception. Mitau, he said, has handled throughout the years some bumpy CEO transitions delicately and graciously. The most recent ones are smooth in comparison.

Mitau, born and raised in St. Paul with a father who was a popular professor at Macalester College, left to earn a bachelor's degree at Dartmouth College in New Hampshire, then returned to get his law degree at the University of Minnesota.

He worked for a bit at a Wall Street law firm but returned to Minnesota and became a partner at the Minneapolis firm Dorsey & Whitney where he did mergers and acquisitions work and securities law. There he worked for a number of clients, many of them public companies, before he moved "across the street" to be general counsel and secretary, among other positions, for First Bank System, which became U.S. Bancorp.

"I've worked with a generation of CEOs over the years," Mitau said, from First Banks' Jack and Jerry Grundhofer and U.S. Bank's Richard Davis to Graco's Dave Koch and H.B. Fuller's Tony Andersen.

From those CEOs, he developed a list of what makes a great company leader that he used to help steer the CEO selection process at Graco for Mark Sheahan, who succeeded Patrick McHale, and at Fuller for Celeste Mastin, who takes the reins in December from James Owens. If the new CEOs at these two companies do as well as their immediate predecessors, employees and shareholders will continue to be pleased.

"The CEO sets the tone for the organization. They are really the source of the company culture, and that's extremely important," Mitau said. "It's important to me that I see someone with strong ethical makeup, good people skills and a sense of fairness and equity when dealing with his or her people."

Mitau, who turned 74 in October, will retire from both boards in the next year or so. Both Graco and H.B. Fuller have mandatory retirement ages at 75, and he said he has no plans to challenge those rules after decades of service.

He has been on the Fuller board since 1996 and chair since 2006. Graco named him to its board in 1990, and chair since 2002, except for a year's time held by McHale's predecessor. Mitau also offered the chair role to McHale, but the CEO turned it down, preferring to keep his focus on running the company, not governance issues.

These latest CEO transitions are more orderly than the round before, he said. Both McHale's and Owens' predecessors left suddenly for other opportunities.

Why McHale after David Roberts left to lead Phoenix-based Carlisle Cos.? "Pat McHale became a plant manager at the Sioux Falls plant at the age of 28. And was just a whiz kid." Mitau said. "I got to know Pat over the years and knew his character and his ethics and his skills and his energy and his passion, and was a huge fan."

Owens was newer to Fuller, first joining the adhesives company in 2008 after a long stops at competitors National Starch and Henkel Corp. In 2010, he replaced Michele Volpi who had departed the company suddenly.

"He was an industry veteran, and he had an excellent track record. He was the obvious internal choice in our view," Mitau said.

Graco and Fuller took different paths for the latest transitions. Sheahan was top of a list of internal candidates, Mitau said. Fuller decided fairly early in the process to seek an outside candidate to succeed Owens.

Mastin was recruited and joined Fuller as president and chief operating officer March 7 after 30 years working in manufacturing and distribution companies, including several CEO roles.

"[Owens] has great style, and it's a hard act to follow," Mitau said. "Celeste is about as a good a choice as you get to follow a hard act, because in many ways she's a lot like Jim. We are looking for great things from Celeste."

Mitau does believe that a board should have an independent board chair or lead director. He feels his role is to be intermediary between strong-willed board members and their CEOs.

"I keep my role at the board level, I try not to get too involved in management details. And I think that's the correct role," Mitau said. "And, in fact, I think one of my duties as chair is keeping the rest of the board in line with that."

Owens said in an email that Mitau "makes sound moral decisions based on the best long-term interests of the company and its shareholders."

"He understands that a board's most important decision is to choose the right CEO but also recognizes that shareholder value is achieved through a collaborative effort of management, the board and employees effectively serving customers to make the world a better place," Owens said.

Sheahan calls Mitau "a strong leader with a steady hand who has always demonstrated an unwavering commitment to our shareholders, the management team and our employees worldwide."

Strong CEOs

If Mark Sheahan and Celeste Mastin do as well as their predecessors at Graco and H.B. Fuller, shareholders and employees will be pleased.

Under Jim Owens, H.B. Fuller's revenue grew from $1.3 billion to $3.3 billion and was consistently profitable, with net income growing from $70.9 million to $161.4 million. H.B. Fuller's stock has had a total return of 266% under Owens.

Under Pat McHale, Graco revenue grew from $841.3 million to $2 billion and was consistently profitable with net income growing from $153 million to $440 million. Graco's stock had a total return of 612% under McHale.