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The Board of Directors

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					  Conniving
Co-conspirators?
      or
  Complacent
 Confirmers?
Preface
The Board of
 Directors
The Board of Directors
A group of people legally
charged with the
responsibility to govern a
corporation
…responsible to stockholders
…to the stakeholders
The Board of Directors
           RESPONSIBILITIES

 Provide continuity and to represent the
  organization
 Hire and fire a chief executive
 Govern the organization
 Acquire sufficient resources for the
  operations
 Account to the public for products and
  services
The Board of Directors
  How’s the Disney board
          done?


    Lousy!
The Board of Directors
Corporate governance in
       the 90s?

     Total
  Complacency!
The Enron Debacle
The
      Story
The Board of Directors

  A governance
  revolution is
   under way
Heated boardroom debates!
   How much is enough?
   Accounting for options?
   Director independence?
   On how many boards?
   Additional consulting from
    our auditor?
Pockets of resistance
      remain
The Board of Directors


  More good
   news!
The Board of Directors
        Real Changes!

• Corporate Fraud Task Force
• Sarbanes-Oxley Act of 2002
• The Securities and Exchange
  Commission began hiring
• CEO and CFO personal certifications
• New York Stock Exchange and
  NASDAQ standards
The Board of Directors
    Real Standards!

  •Independence
  •Stock Ownership
  •Director Quality
  •Board Activism
The Board of Directors
    Real Standards!

  •Independence
    • No more than 2
      executives
    • Audit, compensation,
      and nominating –
      independent directors
The Board of Directors
    Real Standards!

  •Stock Ownership
    • $150,000 equity stake
      by each director
The Board of Directors
    Real Standards!

  •Director Quality
    • One with experience
      in the field, one CEO
    • No more than 4 or 7
      boards, 75%
      attendance
The Board of Directors
    Real Standards!
•Board Activism
  • Regular independent
    executive sessions
  • Audit committee mtgs.
    4 times per year
  • Frugal, decisive,
    diligent, quick to act.

				
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posted:7/29/2012
language:English
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