FROM ITS founding, DIRECTORS & BOARDS has called upon the best minds to stimulate thinking and to spark dialogue on corporate governance. For the past 25 years, prominent executives and their top advisers have offered our readers valuable insights on the critical issues facing the governance of American corporations. As a result, DIRECTORS & BOARDS has become the leading advisory publication for chief executive officers and corporate board members focusing on boardroom structure, processes, and composition. In this special 25th anniversary edition, DIRECTORS & BOARDS reviews past events and trends and identifies future issues and agendas.
Despite an ever-changing economic, legal, and social landscape, some fundamental governance principles remain inviolate.
First, a board should not attempt to manage a business. The responsibility and authority to manage the company's affairs rest with top management. However, the balance of power in the boardroom has been shifting as large shareholders have gained greater influence with regard to succession planning, board composition, and strategic direction. As a result, the corporate governance process requires a delicate balancing of management prerogatives, director responsibilities, and shareholder interests. At the fulcrum of this balance is the chairman of the board, who needs to establish an open dialogue with major stakeholders, soliciting their objectives and requirements and detailing corporate prospects and opportunities.
Second, boards need members who combine intelligence and experience with character and judgment. Moreover, they need members who are autonomous. A director's independence allows him or her to challenge management decisions and evaluate corporate performance from a completely free and objective perspective...