Mapping Your Board's Effectiveness

In the aftermath of such highly public and grossly damaging business debacles as Enron, Tyco, and WorldCom, much attention and plenty of criticism have been directed at those companies' corporate boards. Traditionally, board responsibilities have been to oversee the company's overall strategy, hire and monitor the CEO, scrutinize the performance of the company's leadership team, oversee financial reporting and disclosure, and ensure compliance with laws and regulations.

The recent failures triggered regulatory and legislative responses, including the Sarbanes-Oxley Act and new Securities and Exchange Commission-approved NYSE and Nasdaq governance listing standards. The risk now is that boards will become overly focused on regulatory compliance and not perform their broader and more managerial responsibilities adequately.

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