Corporate directors are devoting more time to identify and monitor strategic, operational and financial risks and are relying less on management to do those tasks, according to a recent study by the Conference Board.
The 140-page report, "Corporate Governance Handbook 2005: Developments in Best Practices, Compliance and Legal Standards," notes that this new role for directors--spurred by the Sarbanes-Oxley Act, new stock exchange listing rules and court rulings--requires them to provide active oversight to minimize corporate risk and promote shareholder value. As fiduciaries, directors must be active monitors of management, the report says.
"We see in our Directors' Institute that board members are now requesting much more information, evaluating it, using it and really becoming pro-active," Carolyn Kay Brancato, head of the Conference Board's Directors' Institute and co-author of the study, told The Friday Report. "In fact some of them are so pro-active that they risk trying to micro-manage the company. They are still looking to define the right balance between the role of management and the role of the board."
See full Article. Also see Conference Board Report Summary.
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