"I TRACE MY INTEREST in corporate governance back to the early '80s when I was chairman of the Advanced Management Program. We were trying to develop an innovative curriculum, and we believed that if we were educating people who were going to be the future corporate leaders, then they should know something about boards. So we made corporate governance part of the curriculum. Back then there really wasn't much being done to systemically study boards. Myles Mace and Ken Andrews were probably the only ones on this faculty who were spending any time thinking about boards.
What we did was to invite CEOs and experienced directors to come and spend the day with us. Out of those discussions we realized that there wasn't any codified knowledge about boards and how they work. I realized that this would make for a really interesting research topic. About 1986 I initiated a major survey of board members, which led to the publication of the book, Pawns and Potentates.
When the book was published, I suddenly found myself in the middle of what I called the "circus" of corporate governance. I became an authority. [Laughter] It was clearly a case of being in the right place at the right time, because the book was published in an environment where there was an immense amount of interest developing in corporate governance generally, and in boards specifically, on the part of institutional investors, the legal establishment, and directors themselves. And I have been involved in corporate governance ever since.
The big issue that we dealt with in the book, reflected accurately in the title, was whether directors were going to be the pawns of the CEOs or were they going to be the potentates -- which is what the law indicates they should be. At that time, they were probably more like the pawns. Today, they are more like potentates. There has been a big swing in the influence of boards vis a vis management, which has been quite healthy.
My evidence for this conclusion comes from my consulting and conversations that I have had with directors and from my own experience on boards, but it's also out there in the public domain for all to see -- how boards are more involved with removing CEOs when they are not performing, and how directors have gotten more active and are playing a more constructive role on audit committees and compensation committees. There are a number of pieces of evidence that boards are doing more and that a fundamental shift has taken place.