If you’re a member, insist on receiving adequate information. If you’re CEO, share important and difficult information with directors in time for them to digest it-not the night before a meeting. To build better boards, CEOs, lead directors, and board members themselves can work to:Ĭreate a climate of trust and candor.
They’re robust social systems: Their members know how to ferret out the truth, challenge one another, and even have a good fight now and then. Yet great boards do far more than just follow good-governance rules. These boards even had audit committees, compensation committees, and ethics codes. Members attended meetings regularly, had lots of personal money invested in the company, and weren’t too old, young, or numerous. And that’s what’s so scary: Like most boards, those of the fallen giants followed all the rules.
Were the directors asleep at the wheel? In cahoots with corrupt management teams? Out-and-out criminals themselves? The meltdowns of once-great companies like Enron, Tyco, and WorldCom have riveted attention on their boards.
