Despite 25 years of work -- no silver bullet.

AuthorHORTON, THOMAS R.

Do we merely have a collection of "okay practices that maybe you'd like to consider -- or maybe not"? Perhaps so.

THESE PAST 25 years have brought forth a prodigious parade of panels and commissions and committees, each devoted to the improvement of the governance process, not only in the United States but abroad. Surely, then, one might think that by now there should be some uniform array of best practices that is accepted by virtually everyone, everywhere. Yet this is far from the case. Instead, there are differences in basic beliefs, even regarding such sacred issues as independence, and extreme variances among directors' basic job descriptions.

In this space I recently wrote about a large U.S. retail company whose outside directors are expected as a matter of course to visit 20 of its outlets each year, simply as a part of their job description. I had searched long, hard, and in vain to find any other company whose directors were expected to devote that much time, between meetings, to their board responsibilities.

It turns out that I should have searched longer and harder, and farther from home, for since then I have come across a $10 billion market-cap corporation whose outside directors are expected to provide that company 50 days per year above and beyond the time they spend at board meetings. Contrast this to the less than 200 hours per year typically spent by U.S. directors in the fulfillment of their tasks, including the time spent at those meetings!

This particular enterprise, whose return has exceeded 20% for each of the past 20 years, is the Lend Lease Corp., founded in the early 1950s by two Dutch companies but headquartered in Australia. It is one of the leading integrated real-estate managers in the world, with around $60 billion in funds under management. Conventional in some ways and impressive in every way, Lend Lease chooses to govern in its own way.

Unlike many modern companies, its board boasts an equal number of inside and outside directors. Its corporate board is augmented by seven regional business boards that meet in other parts of the world, six of which are chaired by nonexecutive directors. Incidentally, almost half of its nonexecutive directors live outside of Australia.

What should we think of its practice of compensating outside directors for work done outside the boardroom? Isn't this something that is severely frowned upon by governance experts? Apparently, Lend Lease values the knowledge gained and the...

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