A 'take-nothing-for-granted' stance: a managerial cohort weaned on uncertainty and change can be expected to bring an aggressive approach to its board oversight.

• Author: Brown, Hobson, Jr.

A managerial cohort weaned on uncertainty and change can be expected to bring an aggressive approach to its board oversight.

OVER THE LAST DECADE, the U.S. business community has undertaken a thorough rethinking of corporate governance issues. Boards are reasserting their independence from management, becoming more actively involved in the evaluation, succession planning, and compensation of its top executives. A focus on shareholder interests has eroded traditional perks like retirement benefits for outside directors while increasing the importance of director stock ownership. And a new level of public scrutiny is beginning to cast a spotlight on the performance of directors themselves.

Clearly, corporate governance is in the midst of an important transition period. All transitions, however, beg the question of their permanence. Do these changes represent a fundamental shift, or merely a temporary inclination? The answer, of course, lies in the actions of tomorrow's directors. And there is good reason to think that the next generation of directors, because of its specific history and experience, is uniquely poised to carry this revolution forward.

Consider, for example, that the typical current director of a Fortune 1000 company is about 60 years old. Such an executive was probably reaching the ranks of middle management -- the corporate world's coming of age -- in the mid-1960s. These were the go-go years of conglomerates, when big was better, the word "corporate" implied tried-and-true formulas for success, and economic growth seemed inevitable.

Now take someone 10 years younger, currently being groomed for a future CEO or COO slot. This executive, the director of tomorrow, was entering middle management in the mid-1970s -- only a decade later, but what a difference! A period of stagnation questioned the inevitability of post-war economic expansion, the valuation of blue-chip companies plunged from record heights, and the energy crisis, not to mention upheavals in the White House, sapped consumer confidence. The result was a managerial cohort weaned on uncertainty and change.

That uncertainty of 20 years ago ultimately provided the groundwork for the business environment of today. Decentralization, strategic thinking, globalization -- each of these are part of a highly competitive world view in which borders are disappearing, product life cycles are short, and no advantage is held for long. Increasingly, boards will be comprised of...