The board should set objectives for itself.

• Author: Franklin, Barbara Hackman
• Position: Corporate board

Encouraging boards to define their roles and set clear objectives will increase their effectiveness and help the governance process take further shape.

The laws of physics apply just as well to the world of governance as they do to the world of the physical. Every action causes a reaction. This is what is happening in boardrooms today. Boards are redefining their role as they emerge from a time of laissez-faire into an era of more responsibility and independence. This new paradigm has already taken hold and manifested itself in many boardrooms, driven by the upsurge of shareholder activism and the increasing pressure and pace of global competition.

This transition in the temperament and focus of boards is most graphically illustrated by the number of CEOs who have been replaced in the past couple of years as boards became more impatient for results. But the frequent lack of smoothness in the way that the process of management change has been handled (it has often been clumsy, circuitous, and even embarrassing as confidential details were leaked to the press) also illustrates that the evolutionary progress is uneven and inconsistent. Apparently, the state of the art of governance is lagging behind the reality of board action.

Boards are now struggling with this issue. It is the impetus for lengthy and, at times, tortuous discussions about the need for boards to do "more," even though no one has yet defined what that "more" should be. Should boards be "more" involved with management? Should they have "more" detailed information? Does "more" mean micromanaging?

In addition, some boards are trying to evaluate their own performance. The effort is laudatory, but evaluation is difficult, and probably not very meaningful, when the board role is in flux.

This state of confusion probably is one of the unarticulated reasons why companies are finding it harder to attract and retain good directors. Work is always more satisfying when its purpose is clear. When it's not, the psychic income declines. Combine that with more liability, increasing demands on time and energy, compensation that may not be commensurate with the liability and the workload, and the result is that it is just not as satisfying to be a director these days.

My purpose here is to make a suggestion to help clarify the governance process, a suggestion that centers on one simple idea -- that the board should set objectives for itself and its work.

Many companies already have in place an...