The financial crisis has put the spotlight on the way boards of directors are managed. For this reason, a new study on the structure of these boards, based on interviews with around 30 institutional investors and board chairs, makes for timely reading.
Of note is the surprisingly low level of direct or indirect influence that institutional investors have on corporate governance. According to the authors of the study, IESE Prof. Pascual Berrone and Russell Reynolds Associates, 60 percent of the board chairs they interviewed stated that they exercised little or no involvement.
That figure is even more surprising when taken alongside institutional investors’ belief that boards do not meet their expectations regarding equity, independence and management control issues.
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