Not one of the boards conducted a rigorous evaluation.Even those who seemed to speak with pride about their process were appallinglydeficient. All deemed it sufficient to seek data only from the CEO'smanagement team. They complain about the time reforms likeSarbanes-Oxley require. The average number ofboard meetings has inched up from 7 a year in 1998 to 8.7 in 2008.
CEOs and board members admitted to us that instead of harnessing andleveraging the intellectual power and experience of their board, directorsoften morph into compliance officers and accountants And as firms flounder, board members quit. It's harder than ever to recruitsmart and seasoned players who are willing to live in the glass house ofgovernance. Boards rely less on former CEOs, and now have to spend more timeand money seducing candidates. In the New Economy, leaders and board members will have to spend more time,not less, to insure that they are a high-functioning group, and not a bunch ofpals and partners, and dare we say, there may even be a trend toward splittingthe roles of CEO and Board Chair, as has been mandated by Britain's 2002Combined Code. The latest research by a leading search firm confirms that "S&Pboards are slowly moving toward separate chair and CEO roles." Sixty-onepercent still have a combined role, but that is down from 84 in 1998. Expect More RegulationIn addition to external, unbiased CEO evaluations, we also expect theemergence of external board reviews to provide systematic, in-depth reportcards on board functioning and compliance. Shareholders are getting tougher, becoming better informed and more persistentin their demands for results.
TheMadoff scandal and the sudden demise of legendary firms should trigger tougherrules and more persistent involvement by the government into what have beenpolite provinces of privilege. It will take courage and leadership for companies to take stock of how theirboards really work, and to accept that the medicine of reform is better thanthe illness. We'd bet the smart ones will take on the challenge of buildingbetter boards and framing new expectations for how they perform in the publicinterest before they are forced by others to do it. This is a call to action for our best leaders to step up to another level ofengagement, accountability, and transparency. There may still be time, but I'mquite certain I hear hammering in the background SOURCERoger FranseckyLeena Soman, 1-212-931-6176. Could it be the case of the Sports Illustrated curseEver since the Bruins were made the popular pick to reach the Stanley Cup Finals, their season has been a rocky road thus far.Win a game.Lose a game.They are a far cry of the team that finished number one in the Eastern Conference last year.And management has had enough.I love Peter Chiarelli.He is like the Bill Belichick of the Bruins.