Board of Directors Changing Their Image
Members of boards of directors are finally ending their image as rubber-stamping friends of CEOs. More autonomous than ever and in the eye of extensive legal and investor scrutiny, board members have become very cognizant of auditing and compliance issues and sensitive about lavishing executives with excessive compensation and perks. “Most boards have been perceived as a bunch of older white men who are in the same country club as the CEO,” says Bob Dorf of Compensation Resources. “The reality is, boards are much more concerned about what the outside view is.” “Boards do seem to move faster” to deal with scandals and public failings that attract shareholder and media attention, says Lucian Bebchuk, director of the corporate governance program at Harvard Law School. “From the perspective of shareholders, it is important for directors to monitor and review executive performance carefully and without favoritism to the executive,” he says. “Boards are much more active than they used to be,” says Charles Elson, director of the University of Delaware’s John L. Weinberg Center for Corporate Governance. Many members have realized the importance of reacting quickly to brewing troubles, as well as maintaining some independence from the CEO. “Twenty years ago, they (board members) may have looked the other way,” he says. “Not today.”
http://www.usatoday.com/money/
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