Expectations have changed: just don't let the dire past predictions come back to haunt the board.

• Author: Lorsch, Jay W.
• Position: BOARD PRACTICES

IN CONSIDERING who should speak for the board, it is necessary to address first the matter of should boards make public pronouncements at all. Traditionally, in most public companies, management has spoken for the company (and implicitly for the board). All concerned (top executives and board members) believed this was safer. After all, directors were part-timers with limited knowledge, and therefore might not be able to make thorough or coherent pronouncements or might make misstatements and, further, would not be able to answer questions about their statements. Even worse, if more than one director commented on the same matter, they might express different opinions, leaving the impression the board was confused or, even worse, in a state of disagreement.

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But expectations of boards have changed in recent years. Today boards are expected by shareholders and others to have a voice and to offer their views on company matters. For example, board compensation committees are required by the SEC to discuss their decisions about executive compensation in the CD&A in their company's 10-K. If boards replace a CEO, they are expected to explain their decision publicly. At shareholder meetings, board chairs (even if they are not the CEO) are expected to comment on the board's activities and even company results.

As this latter example suggests, the most obvious person to speak for the board is its chair...