Boardroom INSIDER for… MARCH

 

BUSINESS SCANDALS – ARE CORPORATE CONTROL FLOPS LETTING BOARDS DOWN?

(March, 2015) When something fails repeatedly, we start asking why.  One exception — the internal controls that corporate boards of directors use to govern and oversee companies.  In the March issue of online monthly Boardroom INSIDER, publisher and governance commentator Ralph Ward spotlights the ongoing tax and money laundering scandals at Swiss banking giant HSBC as evidence that modern, corporate governance controls don’t — control, that is.  He observes that the HSBC Group board not only has an audit committee, but a “conduct and values committee, a group risk committee and a financial system vulnerabilities committee…you would think they have plenty of watchmen in the boardroom.”

In the BI lead article, Ward notes that Enron, Olympus, Petrobras, Tesco, and most other juicy scandals of the past decade or so would have been thwarted with “a system of internal controls that sounded alarms so loudly and constantly they couldn’t be ignored in the boardroom.”  Board members have little to gain and much to lose by association with a corporate blowup, but their motivations do little good if “our system of internal control doesn’t control well enough.”

Also in the March Boardroom INSIDER:

pinkAn 8-step guide to board leadership succession.
pinkHow activist investors are shaking up board evaluation.
pinkQ&A: How to stop directors from ducking out of board meetings.