The Way it was: 1993.

Standards Are Rising

In a rapidly evolving international economy, those institutions that are not changing their ways of doing things and, most important, their thinking, are clearly headed for extinction. The Roman orator Cicero once said of a friend: "He remained the same when the same was no longer fitting." The question for today is this: Will corporate governance remain the same when the same is no longer fitting? Will companies and their boards recognize that the management processes and governance practices of the global corporation must be dramatically different? Will they simply try to fine-tune or will they see the need to break loose from policies, attitudes, and governance practices that are no longer fitting?.. .In short, the standards against which the performance of directors is measured are rising.

Paul Stern, former CEO of Northern Telecom Ltd., in "The Power And the Process" [Spring 1993]. He stepped down as the company's nonexecutive chairman in 1993, and subsequently was affiliated with Forstmann Little & Co. and Thayer Capital Partners.

A Lead Director Is Proposed

We recommend that those companies that do not have a nonexecutive chairperson designate one of the outside directors as the lead director....While the immediate reaction of many chairperson/CEOs to this proposal is negative, we believe it is a critical factor in making boards more effective. In fact, we believe that in many boardrooms today such a leader is already recognized by management and the outside directors. This is a natural concomitant of responsibility for audits, compensation, and nominations being placed in the hands of committees composed only of outside directors. The chair of one of these committees usually emerges as a leader of the outside directors. In other cases it may be the director with the most seniority or the one who is most respected by the other directors. Our proposal recognizes and gives form to what in many cases has emerged on a de facto basis, but does not compromise the leadership prerogatives of the chairperson/CEO.

Martin Lipton and Jay Lorsch in "The Lead Director" [Spring 1993]. an excerpt from their paper, A Modest Proposal for Improved Corporate Governance. "Lipton is a partner in the law firm of Wachtell, Lipton, Rosen & Katz. Lorsch is a professor at Harvard Business School.

Terrorism Will Strike Again

Terrorism will continue to be a problem in world stability. Despite the current quiescence in the Middle East, it will come back.

L Paul Bremer, managing director of Kissinger Associates, in "Warning: Instability Ahead" [Winter 1993]. Ambassador Bremer joined Marsh Inc. in 2000 to be its senior adviser on political and emerging risks, and was named in October 2001 to head a newly formed crisis consulting practice.

How to Vote on a Retired CEO

One issue that goes to the very heart of corporate governance is the role of current and former CEOs on the boards of directors. Should chief executive officers remain on the board after...