Board Governance (board + governance)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting80%

Selected Abstracts

Redesigning Corporate Governance Structures and Systems for the Twenty First Century

CORPORATE GOVERNANCE, Issue 3 2001
Robert A.G. Monks
How a corporation is governed has become in recent years an increasingly important element in how it is valued by the market place. McKinsey & Company in June 2000 published the results of an Investor Opinion Survey of attitudes about the corporate governance of portfolio companies. The survey gathered responses about investment intentions from over 200 institutions who together manage approximately $3.25 trillion in assets. Ranging from 17 per cent in the US and Britain to over 27 per cent in Venezuela, investors placed a specific premium on what was called "Board Governance". To put this into perspective, consider how greatly sales would have to increase, expenses be cut and margins improved to achieve a comparable impact on value. "For purposes of the survey, a well governed company is defined as having a majority of outside directors on the board with no management ties; holding formal evaluations of directors; and being responsive to investor requests for information on governance issues. In addition, directors hold significant stockholdings in the company, and a large proportion of directors' pay is in the form of stock options." This correlation of governance with market value by one of the most respected consulting companies in the world creates the foundations of a new language for management accountability. McKinsey has great credibility as a value-adding advisor to corporate managements. Governance is not a cause or a theology for McKinsey; it is an important element in the value of an enterprise. By getting the opinion of what we call Global Investors with portfolios of holdings on every continent, McKinsey has importantly impacted the cost of capital for all corporations henceforth. Admittedly, McKinsey's criteria of "board governance" are blunt. "Every organization attempting to accomplish something has to ask and answer the following question," writes Harvard Business School professor Michael C. Jensen in the introduction to his recent working paper: "What are we trying to accomplish? Or, put even more simply: When all is said and done, how do we measure better versus worse? Even more simply: How do we keep score... . I say long-term market value to recognize that it is possible for markets not to know the full implications of a firm's policies until they begin to show up.... Value creation does not mean succumbing to the vagaries of the movements in a firm's values from day to day. The market is inevitably ignorant of many of our actions and opportunities, at least in the short run...". Surprisingly little attention is paid to what we all intuitively know, that talented people are not entirely motivated by financial compensation. Directors therefore must pay special attention to creating an appropriate environment for stimulating optimum management performance. [source]

Appointments to boards and committees via lottery, a pathway to fairness and diversity

JOURNAL OF PUBLIC AFFAIRS, Issue 2 2009
Lyn Carson
Public appointments for committees or boards can be controversial due to cronyism or pandering to demands of noisy or powerful interest groups. One relatively unexplored method for selecting committee or board members is random selection which has advantages beyond interrupting cronyism. This paper canvasses the strengths and weaknesses of an unusual selection method and makes a case for the use of a lottery as a robust process that will lend legitimacy and credibility to committee or board governance. Copyright © 2009 John Wiley & Sons, Ltd. [source]

Governance over the years: A trustee's perspective

NEW DIRECTIONS FOR COMMUNITY COLLEGES, Issue 141 2008
George E. Potter
This chapter provides an overview of board governance, its effectiveness, and changes over more than four decades. The authors also offer strategies for creating partnerships between presidents and trustees that lead to future institutional success. [source]

Best practices in board governance: Evidence from South Carolina

NONPROFIT MANAGEMENT & LEADERSHIP, Issue 2 2008
Jo An M. Zimmermann
In June 2003, a large-scale survey was conducted among South Carolina nonprofit agencies to gather information on a range of board governance issues. Some of the survey questions dealt with how each agency's board contributes to the organization. More than 80 percent of the responding agencies were registered as 501(c)(3), with the largest number of respondents in the human services category. Statistical analysis reveals where actual roles differ from "best practices" as prescribed in the literature. Discussion then focuses on how these trends in governance affect management and operations. In particular, we look at best practice regarding the separation of board and staff duties. [source]