Corporate boards in the United States in recent years on the hot seat. Under the influence of high-profile scandals, investor dissatisfaction fees and performance issues on the level of executive compensation, regulators have introduced significant reforms in the rules that govern the board. But will such reforms actually enhance the effectiveness of advice? There is a real danger that the mandate of the changes will not only be able to improve how companies manage, but also could lead to a number of negative unintended consequences. To explore these questions, the authors conducted a study that compared the board practices and the effectiveness of Fortune 1000 companies in 1998 against 2003. They looked specifically at three areas: management fee, the conditions governing board membership, as well as evaluation of the board, individual members of the Board and CEO. These results helped to identify what practices in these three areas are actually linked to the overall performance of the board. "Hide
by Edward E. Lawler III, David Finegold Source: MIT Sloan Management Review 7 pages. Publication Date: January 1, 2005. Prod. #: SMR163-PDF-ENG
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