A company's board of directors offers inside clues to the firm's prospects, says governance newsletter.
November 4, 2005 (Press Release) --
The boards of directors of our corporations draw growing attention today from investors and the media. But the November issue of online governance newsletter Boardroom INSIDER tells how smart biz analysts can "read" a corporation's board to predict the company's prospects (or lack of them).
By "studying a board's membership, structure and relevance to the core business, you can divine a great deal about the company as a whole" says BI publisher and business commentator Ralph D. Ward. As an example, the board of beleaguered auto giant General Motors at first glance checks off all the boxes for good governance. It has strong committees, very impressive board resumes (directors include Merrill Lynch CEO Stanley O'Neal and ex-Ernst & Young CEO Philip Laskaway), and all independent members save for CEO/Chair Rick Wagoner.
But closer analysis shows "some dry rot in the boardroom." Half of the GM board's directors have "retired, former or emeritus in their titles." Further, the directors may be blue-chip corporate statesmen, but "none seem to have any experience actually making or marketing cars." Ward notes that too many corporations have boards with "no seeming relationship to the company's needs."
Also in the November issue of Boardroom INSIDER:
[] What makes a good board "separate chairman."
[] Quick! Do you know where your company's vital governance records are?
[] The new dangers in audit committee meeting minutes.
[] Q&A: So what defines a board "vacancy?"
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Ralph D. Ward is an international business speaker, consultant, and publisher of Boardroom INSIDER, the online newsletter for better boards and better directors (http://www.boardroominsider.com). He is author of the books Saving The Corporate Board, Improving Corporate Boards - The Boardroom INSIDER Guidebook, and 21st Century Corporate Board. For more information, contact (989) 833-7615.
By "studying a board's membership, structure and relevance to the core business, you can divine a great deal about the company as a whole" says BI publisher and business commentator Ralph D. Ward. As an example, the board of beleaguered auto giant General Motors at first glance checks off all the boxes for good governance. It has strong committees, very impressive board resumes (directors include Merrill Lynch CEO Stanley O'Neal and ex-Ernst & Young CEO Philip Laskaway), and all independent members save for CEO/Chair Rick Wagoner.
But closer analysis shows "some dry rot in the boardroom." Half of the GM board's directors have "retired, former or emeritus in their titles." Further, the directors may be blue-chip corporate statesmen, but "none seem to have any experience actually making or marketing cars." Ward notes that too many corporations have boards with "no seeming relationship to the company's needs."
Also in the November issue of Boardroom INSIDER:
[] What makes a good board "separate chairman."
[] Quick! Do you know where your company's vital governance records are?
[] The new dangers in audit committee meeting minutes.
[] Q&A: So what defines a board "vacancy?"
------------------------------------------------
Ralph D. Ward is an international business speaker, consultant, and publisher of Boardroom INSIDER, the online newsletter for better boards and better directors (http://www.boardroominsider.com). He is author of the books Saving The Corporate Board, Improving Corporate Boards - The Boardroom INSIDER Guidebook, and 21st Century Corporate Board. For more information, contact (989) 833-7615.
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