On Becoming an Activist Board! Sketch of a Corporate Governance that Creates Value.

Abstract

The governance reforms carried out in publicly traded companies since, if not before, the fiascos called Enron, WorldCom, Tyco, Global Crossing, et alia have resulted in boards of directors largely staffed with independent, diligent people with solid business experience.Then, why is it that boards, though dutiful and careful, remain surprise-prone and ill-equipped to challenge management. How can we explain the governance issues manifested in so many corporations? Indeed, if management does not provide the board with the relevant information, hides from the board or lies to the board, how can the board be held accountable?Yet, in most, if not all, fiascos, in hindsight, it appeared that warning signs had been overlooked by the board, red flags unseen, symptoms unattended, vagueness not probed.