Governance as a management system.

Author:Brancato, Carolyn Kay
Position:The Shape of Things to Come - Brief Article

CORPORATE GOVERNANCE in the U.S. and increasingly throughout the world has begun to transcend its original focus. Initially, governance focused on proxy voting issues, as investors believed these to be surrogate measures to keep management excesses in check and produce good corporate performance. If shareholders couldn't get behind the scenes to influence the board and management, they would use any tool available; the most obvious was the proxy vote. This got corporate governance off on a negative footing and has obscured many important and positive management processes that can be derived from a good corporate governance system.

The Conference Board has, for many years, viewed corporate governance not as a compilation of specific proxy voting responses, but as a management system to provide an essential framework for boards, managements, and shareholders to define, manage, and balance critical strategic performance measures. These measures go beyond the usual bottom-line indicators and deal with a wide variety of compliance, quality, and environmental and human capital issues to enable a company's board and its management to assess whether a company can reach its strategic objectives. Thus, it not only mandates...

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