In addition to serving on boards of directors, I have also had the opportunity over my career to be an expert witness in many of the largest corporate frauds in the United States - cases like Enron, Tyco, Cendant, Adelphia, Lincoln Savings and Loan, and others. These companies are basically now working for the CEOs and the executives and not for any of the other stakeholders in the corporation, let alone for our broader society. So basically we have a system in which the corporate executives, the CEOs, are trying to make sure the legal system works not for the companies, not for the shareholders, not for the bondholders-but for themselves. One famous critic, a former Economics Nobel Prize winner stated: Many people argue that, in reality, most companies don’t have good corporate governance practices or an appropriate tone at the top and that if it weren’t for laws, regulations, competition and the markets holding firms accountable, executives and boards would always act in their self-interests.
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Ensuring full disclosure and transparency to all stakeholders of the company, including the reporting of financial information.Ensuring that the board has sufficient relevant skills and understanding to review and challenge management’s performance and actions and to provide oversight and advice to management.Ensuring that all shareholders are treated equitably.Ensuring integrity and ethical behavior in the company.
The goals of good corporate governance systems are: In business, the board and executives sit at the top of organizations and the ethical culture they establish is called the “tone at the top.”Įvery board of directors, and the top management it oversees, is supposed to have a system of corporate governance that ensures that the company acts in the best interests of all stakeholders and that the “tone at the top” is appropriate. Having a good, honest board of directors is critical for the success of a company and for the success of the capital markets in the U.S. The board of directors acts in an oversight role for the shareholders and in an advisory role to management. The board of directors oversees top management, hires and fires the CEO, establishes compensation levels for executives and ensures that the company’s financial reports are accurate. The board of directors of a company is the group of individuals that is elected as - or elected to act as - representatives of the stockholders to establish corporate management related policies and to make decisions on major company issues. For the past 13 years, I have had the opportunity to serve on 9 different corporate boards of directors, as well as 4 public company and 5 large private company boards.
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