January/February 2009 -- Vol.
XXX No. 174
30TH ANNIVERSARY YEAR
|
|
OVERSIGHT OF STRATEGIC RISK: A BOARD
CHALLENGE by W. Ronald Dietz
What boards got wrong, and how they can do better.
|
|
Some of America’s biggest financial firms have been badly shaken, or driven out of business over
the past several months. These failures trace back to poorly judged and monitored risk on the part of top executives
and the board. Yet how can directors get a solid handle on risks that may be technical, fast changing, and often
underestimated even by management? The author, a board member of Capital One, offers his personal insight on how boards
can build a best-practice approach. |
|
RESHAPING YOUR BOARD FOR HARD TIMES
by Michael P. Kelly and Dona E. Roche-Tarry
Hard times require a hard look at your membership. |
|
The economic stresses of the past few months suggest a prolonged downturn in the world
economy—and will demand boards and directors able to cope with this harsher climate. Boards have reshaped their
membership and procedures over the past decade to master the reforms of Sarbanes-Oxley. Now, boards and their companies
will face even tougher demands to adapt. |
|
COMPENSATION COMMITTEES IN TROUBLED TIMES
by Jack Dolmat-Connell
The past six months may have made all your pay rules obsolete. |
|
Economic turmoil has brought a tipping point to public and government concern about executive
pay. Incentives and severance that pay out despite company failure may prompt new legislation. However, board
compensation committees must also face new strategic pay concerns—now-useless incentives, underwater stock options, and
peer group benchmarks that are hopelessly outdated. |
|
FINANCIAL GOVERNANCE NOW
by David F. Scranton, Esq.
How to catch a falling knife. |
|
Trying to manage through the economic chaos of the past few months has been compared to trying to
catch a falling knife. Yet that is just the fiduciary task that a corporate board is expected to do. How will you need
to rethink strategy in light of spreading turmoil? What questions do you need to ask on the company’s credit, debt,
financial partners and investments? How must your disclosures and filings differ? Finally, how effective is your board
in keeping ahead of these changes? |
|
SELF-ASSESSMENT: MAKING GOOD BOARDS BETTER
by Roger M. Kenny
Time to "professionalize" your board evaluation. |
|
The Sarbanes-Oxley law and its resulting stock exchange reform rules have driven boards to make
self-assessment a part of their agenda. Yet spectacular failures at some of America’s biggest financial firms (who
presumably had some of our best boards) are prompting questions about just how well boards evaluate themselves. Do they
seek usable answers? Do they measure the correct skills? Can boards really ask themselves tough questions—and deliver
tough changes? |
|
CONVERSATIONS:
DAVID HIRSCHMANN
Obama’s first 100 days and business. |
Rarely in American history has a major economic crisis coincided with the inauguration of a new
president promising massive, top-down change. The last came in 1933, when the Roosevelt administration’s "first
100 days" gave us the U.S. Securities and Exchange Commission.
Now, President Barack Obama will take office at a time of financial system turmoil, rising
unemployment and debt levels, and a massive loss of faith in corporate America. What will his first 100 days bring in
the regulation, recovery and reform of the corporate financial system? For insight, we turned to the U.S. Chamber of
Commerce. Founded in 1912, the Chamber is the world’s largest business federation, representing more than three million
businesses of all sizes, sectors, and regions. We spoke with David Hirschmann, CEO of the U.S. Chamber’s Center of
Capital Markets, on the opening moves corporate directors should expect from the Obama administration. |
|
IN REVIEW Index to actions, regulations and surveys.
|
|
SPOKEN & WRITTEN Excerpts of articles and
speeches.
|
|
DIRECTORS' REGISTER Recent board elections.
|