Boardroom INSIDER for… OCTOBER



What Were the Biggest Global Corporate Governance Changes?

In October, 1997, the world’s business news focused on splashy topics like the return of Apple founder Steve Jobs, and a sudden chill in the Asia tiger economies.  But a quiet corporate governance revolution began with the launch of online governance monthly Boardroom INSIDER, which celebrates its 20th anniversary issue this month.

Publisher and business speaker Ralph Ward notes that BI has kept boards updated during two decades of “radical change in corporate governance, including Enron, SOX, the 2008 financial scare… plus too many boardroom scandals.”

However, BI’s focus from the beginning has been on compiling and sharing boardroom “best practices” from around the world.  The special 20th anniversary issue includes some of these most popular BI articles, such as: How do we ease out a boardroom “seat occupier?”: What to do when an founder and CEO clash?: How to prep for your first board meeting: Boards and strategy – keys to success.

As a close boardroom observer, Ward has also observed major world boardroom changes over the past 20 years, including:

pink  The increasing number and powers of independent board members.  In 1997, the global boardroom model for public companies was largely a group of conflicted insiders and cronies, plus a few overstretched “name” independents.  Global regulations have imposed ever-more wholly independent members on boards, and put them in leadership roles.  “Requiring executive sessions of these independents, without managers present, has proven surprisingly powerful in improving governance,” Ward observes.
pink   The rise of boardroom technology. The first online board portals launched shortly after the founding of BI, and these secure media for sharing board info and director updates have become a must in most boardrooms, eliminating fat paper board books. “The wired board gets much fresher information and is far more efficient.” A downside, according to Ward — coping with directors who tap on their smart phones throughout board meetings.
pink   Board diversity has gone from a minor background issue to become “a major public concern, and an activist investor target,” says Ward, citing recent moves such as State Street Global Advisors’ campaign to pressure all-male boards. “In 1997, no one looked at a board photo with all white guys and considered it odd. Today, that’s changed.”
pink  Board job pressures. Serving as an outside director 20 years ago was a cushy gig, Ward says, with a nice paycheck for a light workload. While a 1995 Korn-Ferry survey found the average yearly director time commitment was 163 hours per year, by 2015, National Association of Corporate Directors research saw Fortune 500 board members putting in 600+ hours. Ward notes the level of technical financial, legal and strategic oversight demanded has also soared. “A part-time hobby has become a full-time job.” Among the impacts — “investors now take a far harder line on overstretched directors.”