Composing a Balanced and Effective Board to Meet New Governance Mandates

The enactment of the Sarbanes-Oxley Act of 2002 and the recent adoption of new corporate governance listing standards by the major American securities markets have resulted in a number of prescriptions that influence the selection of directors of U. S. public companies. These requirements are in som...

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Bibliographic Details
Published inThe Business Lawyer Vol. 59; no. 2; pp. 421 - 452
Main Authors Olson, John F., Adams, Michael T.
Format Journal Article Trade Publication Article
LanguageEnglish
Published Chicago Section of Business Law of the American Bar Association 01.02.2004
American Bar Association
Subjects
Audit committees
Boards of directors
Business
Business management
Business structures
Commercial law
Congressional committees
Corporate directors
Corporate governance
Corporate planning
Corporate regulation
Corporations
Decision making
Group dynamics
Management
Methods
New stock market listings
Public companies
Public Company Accounting Reform & Investor Protection Act 2002-US
Scandals
Securities and Exchange Commission regulation
Securities markets
Selection
Shareholders
Stock exchanges
Stockholders
United States > US
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Summary:The enactment of the Sarbanes-Oxley Act of 2002 and the recent adoption of new corporate governance listing standards by the major American securities markets have resulted in a number of prescriptions that influence the selection of directors of U. S. public companies. These requirements are in some respects inconsistent with the traditional agency role of the monitoring board and, more important, may conflict with optimal functioning of the board as a group. The authors survey the literature on the role of the board and board dynamics, examine the new constraints and their impact on director qualification and selection, and offer ten practical suggestions for director selection that will help nominating and governance committees of public companies to assemble boards of directors that will effectively perform their critical monitoring functions in the new regulatory environment.
ISSN:0007-6899
2164-1838