What should we expect from aboard?

• Author: Denham Robert E.

Ed. Note: This question has presented a perplexing quandary for thought leaders in corporate governance. It is addressed anew by Simon Lorne in the accompanying main article and was tackled a decade ago by Robert Denham in an article in Directors & Boards ["What Should We Expect from a Board?" Third Quarter 2000]. Denham is a partner in the Los Angeles office of law firm Munger, Tolles & Olson LLP where he advises clients on strategic, financial and corporate governance issues. He rejoined the firm (for which he had worked for 20 years) in 1998 after serving as chairman and chief executive officer of Salomon Inc. At Salomon he was responsible for resolving all legal and regulatory issues that arose from a 1991 U.S. Treasury auction scandal. A passage from his article follows.

The decade of the 1990s was marked by perhaps unprecedented attention to corporate governance. The board of directors is the centerpiece of all efforts to reform or improve corporate governance, and we have seen numerous initiatives aimed at changing the structure and composition of boards and the way that they function. This corporate governance or board reform movement is not...