The Way it was: 1985.

Early Call for Formal Self-Evaluation

Every board needs a way of assessing performance. Otherwise, it carries out its functions year after year without any real measure of effectiveness. The danger of foregoing such an exercise is that a board may be perpetuating ineffective behavior and reinforcing it to the degree that it becomes irreversible. Compare an appraisal of the board to your regularly scheduled physical. Nothing necessarily has to be wrong with your body, but an assessment of its effectiveness will detect anything abnormal in an early stage and allow for corrective action before it's too late. This is preventive medicine, and the same principle applies to a regularly scheduled checkup on the body of corporate governance.

There are two distinct parts to such a performance appraisal. First, the board must have some understanding of what its role is. And second, it must find a way to measure its performance against that role.

Alfred Van Sinderen, chairman of Southern New England Telephone, in "The Board Looks at Itself" [Winter 1985].

The Public Responsibility Committee

If you look back at the 1960s and '70s, a company's corporate social responsibility was pretty much measured by the involvement of the chairman and chief executive officer in the affairs of the community. That proved to be not enough. The development of public responsibility committees of the board is a direct result of forward-looking CEOs seeing that the process had to go beyond them and their personal involvement as a representative of the company.

Vernon Jordan Jr. in an interview with James Kristie for the article, "Reassessing the Role of Public Responsibility Committees" [Spring 1985]. At the time, Mr. Jordan was with the law firm of Akin, Gump, Strauss, Hauer & Feld and was serving on the public responsibility committees of the boards of Bankers Trust New York Corp., Celanese Corp., American Express Co., and J.C. Penney Co.

Director's Role in a Proxy Contest

A proxy contest, whether it involves the nomination of a dissident slate of candidates for board membership in opposition to the incumbent directors, or the submission of policy or other proposals opposed by the present board and existing management, raises the most fundamental issues of corporate control. With dissident stockholders increasingly seeking to compel radical restructuring of their corporations or the pursuit of merger or disposition opportunities, what is at stake in a proxy contest is often not merely the composition of a corporation's board of...