As corporate governance standards evolve, companies are increasingly recruiting independent candidates for their boards of directors. The days of cronyism are passing.
Companies such as General Electric (GE) are going beyond reforms mandated by the Sarbanes-Oxley Act of 2002 (SOX) to strengthen their boards' oversight capacity. GE requires two-thirds of its directors to be independent, meaning, for example, the company does not employ them or pay them significant consulting fees. It also asks all directors to become more involved in the company. For example, GE expects board members to visit at least two company sites each year and limit participation on other boards, according to The Wall Street Journal.
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