Always ask the next question.

• Author: Rock, Robert H.
• Position: Letter from the Chairman - Board directors need to challenge management by asking more questions

A JUDGE ASKED the defendant why he had shot the condor. The defendant responded that his family had not eaten for several days and that the bird provided them with a much-needed meal. The judge accepted the man's explanation, gave him a minor reprimand, and called for a short recess before moving on to his next case. In the hallway, the judge saw the defendant and asked him, "By the way, what does a condor taste like?" The man replied, "It's a cross between a spotted owl and a bald eagle."

Like the judge who should have asked some follow-up questions of the defendant, corporate directors often come up short when questioning the CEO.

Directors should not merely accept management's broad explanations; they should dig deep and get to the bottom of things. Directors must continually challenge management by asking more questions and by demanding more information.

Making truly informed decisions takes time, information, and deliberation. Consequently, boards will need to meet more frequently, deliberate longer, and most importantly, get objective advice. To help guide their decision-making, they will need to access ideas and opinions both from within the company and from outside consultants whom they hire directly. The latter will need to recognize that they work for the board, not for management.

Over the past year, attitudes towards boards of directors have changed dramatically. Investors have lost confidence in the board's ability to look out for their interests. The challenge of regaining that...