There are benefits to all in increasing the director's voice: enhancing the role of directors might actually improve the public perception of corporate executives, now at low ebb.

Author:Clapman, Peter
Position:BOARD PRACTICES
 
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WHO SPEAKS for the independent directors of public companies or the role of boards in our corporate governance system? We know who speaks for management, since their organizations are well funded and well staffed and very visible on regulatory developments affecting their interests. We know who speaks for shareholders, or at least those shareholders that are active in governance with high exposure in the press.

One organization that does speak for directors is the National Association of Corporate Directors (NACD), which prides itself on being the "Voice of the Director." (Note: In the interest of disclosure I am on the board of directors of the NACD.) Apart from the NACD, there is no established forum for the views of independent directors to be credibly heard.

This disparity in press coverage and lobbying clout is clearly not good for our system of corporate governance. The "Key Accepted Principles" to strengthen corporate governance published by the NACD are being applied by many boards. Yet, little press coverage has been given to this independent director initiative. Consequently, most of the public has little understanding about what independent directors actually do or their role in the corporate governance system.

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Both management and shareholder organizations should recognize that they are poorly served if the current understandings of the boardroom and governance priorities are not altered. For management, enhancing the role of directors might actually improve the public...

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