We strive to provide individuals with disabilities equal access to our website. This article discusses ways to achieve the right balance. The exhibit illustrates how boards could devote more of their time to the strategic and forward-looking aspects of the agenda.
The alternative is to develop a dynamic board agenda that explicitly highlights these forward-looking activities and ensures that they get sufficient time over a 12-month period. Directors still spend the bulk of their time on quarterly reports, audit reviews, budgets, and compliance-70 percent is not atypical-instead of on matters crucial to the future prosperity and direction of the business. Today’s board agendas, indeed, are surprisingly similar to those of a century ago, when the second Industrial Revolution was at its peak. It has also come through loud and clear during recent conversations with 25 chairmen of large public and privately held companies in Europe and Asia. We have experienced this reality all too often in our work with companies over several decades. Governance arguably suffers most, though, when boards spend too much time looking in the rear-view mirror and not enough scanning the road ahead. Not surprisingly, there’s been a renewed focus on improved corporate governance: better structures, more rigorous checks and balances, and greater independence by nonexecutives, for example. Many of the companies whose corpses litter the industrial and financial landscape were undermined by negligent, overoptimistic, or ill-informed boards prior to the financial crisis and the ensuing deep recession. Debate over the role of company boards invariably intensifies when things go wrong on a grand scale, as has happened in recent years.
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