The role and efficiency of the board of directors

Author: (USA) Colin B. Carter
Publisher:
Publish Date: 2006-03-01
Features: Boards of directors around the world are under immense pressure. Scandals and bankruptcies involving some well-known companies have sparked a global wave of criticism against boards, leading to calls for radical reforms. Various "best practices for boards" have emerged, but can these fundamental adjustments truly enhance the board's ability to improve corporate governance? Colin B. Carter and Jay W. Lorsch point out that to genuinely improve the performance of corporate boards, it must be remembered: contemporary company boards are primarily composed of busy, part-time independent directors who have limited knowledge of the companies they oversee and spend little time on decisions regarding company accounting and financial policies, strategy, management succession plans, and compensation. How the board fulfills its role is a driving factor in the success or failure of a company. The authors argue that boards need to be redesigned. Based on their extensive experience in providing consulting services to boards of directors at well-known companies, they have summarized a board accounting path that can be applied across different countries, industries, and types of businesses. This allows us to rationally move beyond external oversight factors for board structure and the requirements of most reform goals in practice. This book shows us how to "determine the role of the board within the available time, knowledge, and the environment faced by the company." Redesign the size, leadership model, and specialized committees that can best leverage the board's effectiveness. Select and train board members based on appropriate combinations of experience and skills. Reflect on and revise board procedures and practices to effectively change board behavior patterns, improve communication among members, and refine the decision-making process. This book is a must-read for corporate directors, CEOs, government regulators, and any professionals involved in board work. It provides an objective evaluation of the current state of corporate boards and clarifies how boards can move forward in challenging times.