Tuesday, August 17, 2010
Any of us who have had anything other than a flat EKG have known for many years that a good many of the ethical failings that we see on the business pages with appalling frequency can and often are laid at the feet of the CEO.
And why not, for if nothing else, a CEO is looked upon and expected to be the moral compass of the enterprise. So, when that turns out not to be the case, generally we "shoot" the CEO and try to move on.
Of course with the severance packages that they walk away with, they usually have no problem worrying about how they are going to make a living going forward even though anyone in his right mind knowing what they know wouldn't want to have them represent their brand in any case, but that's a subject for a different post.
I don't know about you, but for some reason it only seems like it has been within the past 15-20 years or so that stockholders (and those of us who are just observing from offshore) have started to realize that the "checks and balances" of business and/or the "adult supervision" of the CEO, which is in the hands of the Board of Directors has been lacking to say the least.
To coin a phrase (and trust me, I am NOT making a political statement here!) "How's that working for you"? The obvious answer of course is if the boards of these companies had been serious about their moral and fiduciary responsibilities there is a good possibility that as a country we could be focused on solving any number of challenges rather than trying to fight our way out of the current mess.
Having gotten that out of my system for the moment, it is fair to say, "Okay, so tell me something I don't know." After all, we have SOX, the recently passed financial reform bill, etc., but is there anything else going on?
Words on paper really mean nothing unless there are actually real people behind them who understand spirit and intent and want to facilitate change.
If you are interested in seeing what at least one firm is trying to do, check out the white paper called Building Better Boards. It is available as a PDF on the site of CT Partners, a retained search firm with an active board practice and who recently sponsored their 8th Annual Institute on Board Independence and Effectiveness.
Totally altruistic, of course not, but neither is any apology necessary on their part for taking the initiative in trying to draw attention to the issue. If you check out the PDF and see who made up the panels, these are "A List" players who have reputations for being on the right side of corporate governance. In addition, the firm has been at this for eight years, so immediate PR can't be said to be the driver either.
When it comes to Boards of Directors there are many who feel it is a case of the "rabbits watching the lettuce" and while that is certainly not the case in most companies, we can't forget that "perceptions are real to those who hold them."
CT Partners should be applauded for trying to help change the perception.