Raising the bar in the boardroom: new expectations and standards warrant a best-practices review. This checklist provides a starting point for identifying strengths and weaknesses in your governance structure.

• Author: Boren, Susan S.
• Position: Spencer Stuart/Governance Letter - Column

THE SILVER LINING to the recent rash of corporate scandals -- triggered by the short-term self-interest of executives -- is a new focus on the long-term health and well being of companies. Leaders at public corporations of all sizes and across industries are looking inward and asking critical questions about their own activities and infrastructure in an effort to reassure investors that the "house is in good working order." One item at the top of everyone's list is the board. Virtually all of our clients are taking stock -- either formally or informally -- of their boards, reviewing everything from board composition and structure to board processes. This attention to fundamentals provides an excellent opportunity to raise the standards for boards.

The whole is greater...

Active in director recruitment since 1956, we've long held that it makes little sense to add great directors to inadequate boards. The participation of even the best director can be easily diminished by a poorly designed or orchestrated board. Conversely, the contributions of a great director are enhanced by a board set up to operate effectively.

A first glance at the Enron board reveals a star-studded cast of directors -- highly sought-after individuals from business, government, and academia. But after a closer look, it is clear that having expert directors wasn't enough to ensure good governance at the company. Term limits, well-thought-through committees, and directors selected for their objectivity and diversity of opinion may have fostered a more active and engaged board and fueled the necessary debate.

In addition to helping our clients recruit qualified directors, we counsel them on how to compose and structure their boards for optimal performance. The exercise can be as simple as reviewing a board's committee structure or as complex as working with a board over a period of years to reduce its size or make dramatic changes in composition. Seeking third-party advice on issues of governance lends credibility to the board consultation and helps bring issues to light that may not be as obvious from within.

Among other services, we help boards develop tools to evaluate their own performance and that of the CEO; design and oversee the transformation process when a board is undergoing significant change or upheaval; present recommendations on infrastructure and process, and provide benchmarking analysis against other boards and established best practices.

Best practices...