Chapter 6: Expectations of a Consultant in Corpoprate Governance

Corporate governance is under important changes. The latest corporate failures have given birth to new regulations, and more and more countries, following the United Kingdom’s leadership, have developed corporate governance guidelines. Shareholders are also important actors in this process. As a consequence of the wealth destroyed, more and more investors are expressing their concerns about corporate governance.

In the quest for more effective corporate governance systems, boards are central elements. In fact, boards are so important that a set of tools has been put forward to contribute to better board functioning. Board committees, for example, are considered as a “must have” and board composition (largely in terms of “insiders” versus “outsiders,” relative dependence) has been heavily questioned. Boards should not only be able to effectively monitor management but also to stand against them when corporate interests are not followed. Thus boards are asked to be less directly involved with management, and an increasing number of independent nonexecutive directors (independent NEDs) are being asked to sit on boards.