Broadening the boardroom dialogue.

• Author: Heffes, Ellen M.
• Position: Event Preview

While a popular stereotype holds that women talk more and communicate better than men, it's only just recently that substantial business surveys are documenting that communication is indeed a skill that is linked with improved corporate performance.

So, interestingly, when Sharon Allen--the first woman Chairman of Deloitte's U.S. Board of Directors--speaks at the FEI Women's Forum, on June 15 at Nasdaq headquarters in New York City, she will be talking about improving the performance of boards of directors, in essence, by talking to each other more. She wants to broaden boardroom dialogue--and have participants communicate more openly and freely.

"Had there been more active dialogue in boardrooms over the last few years, there might well have been fewer significant corporate losses," argues Allen. "I believe that dialogue may have brought to light some of the issues that would better have been dealt with sooner."

A big problem with many companies, including those in the headlines, she says, is that board members have simply taken their responsibilities too lightly. "You can't just interact in the boardroom--you must be prepared in advance," says Allen. Both board members and management have responsibilities. The company should provide the right materials, and directors need to read the materials and come to the meetings prepared, and with the right questions.

With so much focus on the notion of corporate governance--the role of the board regarding compliance, regulations and oversight responsibilities as it relates to Sarbanes-Oxley and other regulatory mandates--Allen says, "I think we forgot about the real objectives of a board of directors, which is to protect the stakeholders, but most importantly, the shareholders, the owners of the company."

The way boards operate has changed significantly, Allen notes, and they're changing even more, and for the better. "In today's world, the responsibilities are much more focused," she says, "and while they may not be any different than they've always been, indeed, I think board members are much more clear about their jobs."

What does a good board consist of, and what are its core components? Allen says the structure of the board should broaden and prompt appropriate dialogue in the boardroom. "There are some core basics that are becoming much more standard in boardrooms," she says, and she lists five: 1) true independence; 2) appropriate board size (not too big or too small, so that you don't have...