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Boards That Deliver: Advancing Corporate Governance from Compliance to Competitive Advantage

 
A guide for making boards more effective—and a counterweight to a powerful CEO.
6/6/2005

"Most boards are in flux and still not living up to their potential of providing truly good governance—that is, governance that doesn't just prevent misdeeds but actually improves the corporation," writes Ram Charan. Where his guide diverges from other corporate governance books published since the passing of the Sarbanes-Oxley Act of 2002 is that he focuses less on board processes and structures and more on the value that a board adds to a corporation.

Boards that Deliver is carved into four parts. Part One describes the current environment that boards face as they grapple with their new mandate. Part Two tells how to create a progressive board by relying on group dynamics, information architecture, and active give-and-take about important matters. (The section "Ten Questions Every Director Should Ask," beginning with "Do you have the right CEO?" certainly moves the conversations beyond the routine.) Part Three hones in on the group dynamics piece.

The fourth part looks at best practices for improving dialogue and facilitating information flow between management and the board. Part Five asks boards to allow time for discussion of substantive issues rather than focusing only on required financial monitoring and other compliance tasks.

In sum, Charan says, a strong CEO is fine, but a board should be a perfect counterweight to prevent excessive CEO compensation and undue interference by tangential individuals such as investment bankers, analysts, accountants, and even consultants.

Charan (HBS MBA '65) is an active consultant and prolific author whose previous books in the leadership realm include Boards at Work, What the CEO Wants You to Know: How Your Company Really Works, and, with Honeywell's Larry Bossidy, Execution: The Discipline of Getting Things Done.

Table of Contents:

    Introduction: Advancing the practice of corporate governance
  1. The three phases of a board's evolution
  2. What makes a board progressive
  3. Group dynamics
  4. Information architecture
  5. Focus on substantive issues
  6. The right CEO and succession
  7. CEO compensation
  8. The right strategy
  9. The leadership gene pool
  10. Monitoring health, performance, and risk
  11. Board operations
  12. Working with investors

    13. Conclusion: Leveraging the board for competitive advantage
    Appendix A: Sample strategy blueprint
    Appendix B: The research agenda