Looks at modern guidelines for corporate governance as essentially an exercise in profiling. Sarbanes‐Oxley, oversight agencies, and self‐regulatory agencies focus on the adoption of certain board composition configurations in a purely subjective way and on the basis of factors not clearly linked to outcomes. This paper suggests that other behaviors can more accurately measure performance.
Delineates the more salient behaviors and activities that inform whether boards are effectively meeting their responsibilities.
The following characteristics are more predictive of board performance than those presently used: having an independent board budget; appointing lead independent directors; including emeritus directors; not including a retired CEO on the board; executive sessions for independent board members; elimination of executive committees; refraining from related party transactions.
Provides managers with information on important factors to consider when selecting, measuring and evaluating boards of directors.
Of particular value to CEOs and other board members.
