Boards & Corporate Governance

Showing 1-20 of 57

Don’t Set Your Next CEO Up to Fail

Boards often have only an implicit sense of what they want a new CEO to do — in particular, how much they want the strategic direction and organizational model to change and how they expect it to happen. Clearly defining the mandate and matching it to the CEO’s profile is critical. CEO mandates can be divided into four types: continuation, evolution, transformation, and disruption. They each require different candidate profiles and different approaches to the job.

How Companies Can Prepare for Sudden CEO Turnover

  • Read Time: 4 min 

Recent CEO departures have been attention-grabbing but are also part of a larger rising turnover rate for the top job within companies. Chief departures can signal fear and uncertainty within the ranks, and often managers and employees feel a lack of direction for moving forward. To mitigate risk, organizations must take steps to prepare for uncertainty.

Will the Business Roundtable Statement Impact Workers?

This month’s MIT SMR Strategy Forum poll looks at the recent Business Roundtable Statement, which proposed a view of corporate purpose that includes the interests of employees, communities, suppliers, and customers in addition to shareholders. We ask our panel of strategy experts whether this shift may have an impact for American workers.

It Pays to Have a Digitally Savvy Board

Companies whose boards of directors have digital savvy outperform companies whose boards lack it: Among companies with over $1 billion of revenues, 24% had digitally savvy boards, and those businesses significantly outperformed others on key metrics such as revenue growth, ROA, and market cap growth. Companies can improve their boards by knowing what characteristics to look for in existing and new board members, managing board agendas differently, and cultivating new learning opportunities.

advertisement

Game-Changing Strategies for Corporate Boards

  • Column

  • Column
  • Read Time: 5 min 

The process of recruiting members to a board is often mistaken for the actual onboarding. Much is at stake in terms of legal and fiduciary responsibilities, but relatively little attention is paid to creating the conditions within the board to extract the distinctive knowledge of its new members. Three strategies can help boards do a better job leveraging the unique expertise of each board member.

Bringing Lessons From #MeToo to the Boardroom

  • Read Time: 7 min 

In the wake of the #MeToo and #TimesUp social movements — not to mention the continuing wave of resignations amid misconduct allegations — sexual harassment policies must be on your board’s agenda. This is true regardless of whether the organization is public, private, or nonprofit. For the sake of all its stakeholders, employees, and customers, directors need to do the right thing — and do it now.

Why the Influence of Women on Boards Still Lags

Research indicates that the reason women aren’t making more rapid inroads on corporate boards is that few have reached the most influential board leadership positions. Although more women are on boards now than 10 years ago, very few have been promoted to a post that would give them influence beyond their seat at the table.

advertisement

The Social Responsibility of Business Is to Create Value for Stakeholders

  • Column

  • Column
  • Read Time: 6 min 

The old story of business says that maximizing shareholder profit is goal number one. The new story says that shareholders matter, but not more than other stakeholders — which include customers, suppliers, employees, other financiers, and the communities in which companies operate.

Why Companies Should Report Financial Risks From Climate Change

Meeting the recommendations for disclosure put forth by the Task Force on Climate-related Financial Disclosures might seem like a tough job. But if the oil & gas industry is any example, it’s not as difficult as some might imagine — and there are excellent reasons for corporate boards to consider it.

advertisement

AI in the Boardroom: The Next Realm of Corporate Governance

Business has become too complex for boards and CEOs to make good decisions without intelligent systems. Just as artificial intelligence helps doctors use patient data to make better diagnoses and create individualized medical solutions, AI can help business leaders know more precisely which strategy and investments will provide exponential growth and value in an increasingly competitive marketplace.

Using Scenario Planning to Reshape Strategy

Rather than trying to predict the future, organizations need to strengthen their abilities to cope with uncertainty. A new approach to scenario planning can help companies reframe their long-term strategies by developing several plausible scenarios.

The Board’s Role in Share Repurchases

  • Read Time: 4 min 

Many companies’ decisions about share repurchases are handled mainly by management rather than boards — with repercussions for capital allocation. Boards should carefully balance the capital needed for repurchases against its use in value creation via internal development or external acquisitions — and be skeptical of repurchase programs financed by debt rather than profits.

The Downside to Full Board Independence

High-profile accounting and corporate governance scandals have resulted in significant changes in the structure of corporate boards of directors, in particular the development of independent boards in which the CEO is the only employee director. The downside: Independent board members may not understand the business well enough to make optimal strategic decisions.

Are Nonfinancial Metrics Good Leading Indicators of Future Financial Performance?

Although using nonfinancial metrics like customer satisfaction has become increasingly popular in assessing executive performance and determining compensation, the practice has some significant drawbacks. Not all metrics apply equally to all industries. Companies considering such metrics for strategic performance management frameworks should be mindful of the importance of knowing their strength as lead indicators and applying them appropriately.

Showing 1-20 of 57