With Janet Langford Kelly

From Directorship magazine - March 2005

Summary:

Corporate governance is about long-term wealth creation for shareholders and broader society, not statutory compliance.

This article outlines the 5 Levels of CEO Work and accountability and the implications for Board Directors and meaningful board processes in fulfilling their "strategic duty" to shareholders. This includes processes for establishing 3 to 5 year or longer CEO accountabilities, CEO performance evaluation, designing / approving CEO pay for performance, and effective CEO succession planning and talent management.

A case study shows how one Board addressed the mis-alignment between the Level of CEO Work, Level of CEO Capability and the Level of CEO Pay. Boards that fail to demonstrate a "good faith" attempt to apply the above meaningful processes may find themselves outside the protection of the Business Judgment Rule, lose indemnification, D&O insurance coverage and be personally liable for loss to shareholders if challenged.

The New DNA of Corporate Governance (744.31 kB)