Executive recruiting firm Korn Ferry says it’s time for corporate boards to get serious and get feisty. Its article, “Time for Boards to Get Serious,” cites the Lehman Brothers board as an obvious example of mismanagement. Corporate governance expert Nell Minnow called the Lehman board, “a risk-management committee that didn’t understand or manage risk.”
And another board expert, Frank Zarb, stated, “There is too great a gap between the popular notion of what boards do and the reality of what they are capable of doing. The existing system limits the depth of board oversight. We must either change the system or change expectations.”
Stating that most boards are detached, passive, complacent and focused on compliance and process, Korn Ferry gives three steps boards can take to be more effective:
- Expand expertise
- Solicit better information
- Actively debate the issues
Not all boards, however, are created equal. Just look at HP’s board: few would argue that the HP board should get feistier than it already is. There needs to be some sort of a middle ground.
So what’s the answer to board effectiveness?