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| Author: | Nordberg, D. |
| Title: | Rebalancing the board's agenda |
| Journal: | Journal of General Management
2007 : WINTER, VOL. 33:2, p. 13-23 |
| Index terms: | management executives board of directors risk management industries corporate governance investment analysis |
| Language: | eng |
| Abstract: | Since 2002, the governance (here as: gov.) agenda (as: gov-agd.) has been dominating the activities of corporate boards (as: bd./bds.). In Europe, as in the United States (U.S.), gov. codes have grown up. This paper explores the resulting imbalance, where compliance with codes of conduct threatens to overwhelm the bd.'s primary responsibility, that is, the creation of wealth. A model is considered of bd. processes, starting with 4 key roles: setting direction, organizing resources, controlling and reporting, and evaluating and enhancing for the next cycle. The gov-agd. has drawn attention to the work of bd. committees and the question of the independence of mind directors need to show. However, it may have diverted focus from 3 questions that should figure more prominently in the bd.'s work: i. How should the bd. distribute its work btw. compliance, risk assessment and setting strategic directions?, ii. How do directors become determined when to focus on risk-mitigation and when to encourage strategic risk-taking?, iii. As to greater personal accountability for gov. compliance, where is the line drawn btw. their role overseeing management and interfering with management's responsibilities? |
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