posted October 12, 2003 07:21 AM         

The board’s agenda should be driven by accomplishment of the board’s governance job. Deciding just what that job is involves a careful study of what governance itself is and what this specific board’s version of that is to be. Only then, can one intelligently discuss what should be on any board’s agenda. (You can tell by that comment that I don’t think very highly of the conceptual integrity that underlies most boards’ tradition-blessed agendas.) So I suggest foremost that your board look at its governance job thoroughly enough that what goes on the agenda becomes just a natural and obvious outcome of that study.

posted September 13, 2003 11:20 AM         

Let me refer you to page 172 of “Reinventing Your Board” (Carver and Carver, 1997) for thoughts on the purpose and contents of minutes. That will give you a purely governance commentary on your question.

posted August 19, 2003 11:32 AM         

However, in the wake of knee-jerk reactions to Enron and other debacles, the term "corporate governance officer" (also CGO!) has sprung up in more than 60 U.S. companies. I just want to point out that the CGO as used at Tyco, Walt Disney, Kodak, Pitney Bowes, Computer Associates, and Krispy Kreme, among others, is in no way related to the CGO that I proposed a couple of years ago.

While the staff officer CGO could potentially serve a useful function, my fear is that it is be destined to be just another part of the current flurry of tinkering with corporate governance rather than reforming it.

posted July 31, 2002 04:43 PM         

Robert Monks, perhaps the most famous and well-respected of the shareholder activists, does know about Policy Governance and, indeed, is one of the endorsers (see the back jacket) of the new book. For others not familiar with Robert A. G. Monks, he is founder of Institutional Investor Services and the investment fund LENS, author of "The New Global Investors," co-author of "Power and ccountability," "Corporate Governance," and "Watching the Watchers."

Bob enthusiastically endorsed the book Caroline Oliver and I wrote ("Corporate Boards That Create Value," August 2002) with these words: "'Corporate Boards That Create Value' fills a large need. This book sets forth a clear, convincing and comprehensive framework for corporate governance. It is well written and leaves the reader with that most rewarding sensation -'I've got it, I understand it, It's right.' People today need to be concerned about corporate power. 'Corporate Boards That Create Value' is a must read."

posted July 25, 2002 05:44 PM         

Your timing for your new book on corporate governance couldn’t be better. I am still amazed that the Stockholder Activist movement hasn’t been more embracing of Policy Governance®.

One Activist who does know of your work, and sees what it could do if there were a better balance of authority between the CEO and the Board is Robert A.G. Monks. He was recently featured in Fortune magazine. He professes the same criticism that you have of corporate governance: CEO’s now have unchecked power, and have in fact emerged as the new Owner of the Corporation.

posted July 25, 2002 08:19 AM         

I, too, find it a continual source of amazement just how nude the emperor actually is! Your comments, I believe, are exactly on target. The simply fact is, corporate boards don't work.

The embarrassing, unsettling, unspoken, and frequently infuriating reality is that virtually all the 'solutions' you hear miss the point....including those of Chairman Greenspan. I had read his March 26 statements and was sad he was willing to accept the status quo so readily (e.g., "few directors . . . have seen their interests as separate from those of the CEO, who effectively appointed them and, presumably, could remove them from future slates of directors submitted to shareholders").

As to your question, the logic of Policy Governance® has not been noted by to the higher (or lower) echelons of U.S. government. But I've no evidence it encounters more resistence in the US than in Canada.

posted July 25, 2002 07:59 AM         

For example, a November 2001 report on governance in Canada, Beyond Compliance: Building a Governance Culture, makes several recommendations that distinguish between "independent" vs. "related" directors. Serving on an audit committee, for example, is not appropriate for "related" directors. For sure, board independence from management is deemed to be important, and expanded roles and responsibilities are accorded to independent directors, and yet nobody dares to suggest that there is an important principle here that should be applied equally to all board members, or that giving directors different levels of power depending on their status is a surefire way to design a dysfunctional board.

I also came across these rather telling comments in a March 26, 2002 speech by Federal Reserve Chairman, Alan Greenspan:

"In a further endeavour to align boards of directors with shareholders, rather than management, considerable attention has been placed in filling board seats with so-called independent directors. However, in my experience, few directors in modern times have seen their interests as separate from those of the CEO, who effectively appointed them and, presumably, could remove them from future slates of directors submitted to shareholders.

"I do not deny that laws could be passed to force selection of slates of directors who are patently independent of CEO influence and thereby significantly diminish the role of the CEO. I suspect, however, that such an initiative, while ensuring independent directors, would create competing power centers within a corporation, and thus dilute coherent control and impair effective governance."

posted November 20, 2000 10:22 AM         

I do not recommend a particular model (other sources/readings) to be implemented for a CEO/Executive Management structure? The management literature is a large and fast moving field that I respect and follow. But one of the Policy Governance tenets is that the CEO is allowed to plot his/her own course through those waters. So the board can safely stay out of the hot management issues of the day ("how about this new 'balanced scorecard' approach?").

posted November 20, 2000 10:14 AM         

However, this all assumes the board is using Policy Governance, that is, that the board is fully assuming its responsibility to govern (though not to manage). Few corporate boards do that, in my opinion, so they need the CEO to manage the board as well as his/her staff.

posted November 19, 2000 12:19 PM         

In the Policy Governance model it doesn't appear that the CEO must be a voting member of the board of directors, just that the CEO solely reports to the Board as a whole. In your opinion would the best case scenario be that the CEO is not a voting member of the board or should the CEO be a full member?

We are currently reviewing our by-laws for the changes necessary to fit within the policy governance model, and this is one area that needs address.