Tag Archive for ‘Governance’
With greater gender diversity on a corporate board, comes better performance. Opinions differ as to why, but myriad research studies from leading academic institutions and the private sector all make a compelling case for more balanced gender representation on boards. The debate should be long over, yet women’s presence on U.S. corporate boards remains frustratingly, persistently low.
On August 1, 2013, Delaware became the 19th state to authorize the benefit corporation. For the first time in American corporate law, this new corporate form provides a legal basis for companies to have a positive social purpose in addition to creating shareholder value.
Companies that invest in the management of environmental, social and governance (ESG) risks are far better prepared to deal with business “shocks” and can demonstrate to investors a “resilience” that potentially translates into higher stock market valuations, according to a new report by the consulting firm Deloitte.
The sudden resignation of Ohio State University President E. Gordon Gee from his $2 million-a-year job followed disclosures of so-called jokes he’d made about other universities and their leaders. Columnist Gael O’Brien says the incident raises questions about leadership vulnerabilities among the most seasoned of executives and how their boards respond,
A top Ernst & Young executive says that by not recruiting more women to corporate boards, U.S.-headquartered businesses are encouraging a “brain drain,” as women join the boards of non-U.S. competitors. It’s time, she says, for corporate leaders in America to “take advantage of the power of diverse views from leaders who don’t think, act or look like themselves.”
A damning new report on the child sex abuse scandal at Penn State shows that it was preventable, says columnist Gael O’Brien. “Whether it is child sexual abuse, sexual harassment, fraud or some other crime, one of the great enablers or deterrents to crisis is the culture of an organization,” she writes. “The unpleasant truth is it can happen anywhere a culture doesn’t resist.”
The forced resignation of University of Virginia president Teresa Sullivan has generated turmoil and widespread dissent among faculty, students and staff on the Charlottesville campus. And the state’s governor has given the university’s board an ultimatum to resolve the situation. “What UVA is demonstrating, ” writes columnist Gael O’Brien, “is that when values aren’t put into practice, distrust is created.”
Seven U.S. states have now enacted laws creating a new type of corporation – typically called a benefit corporation, or B Corp – to advance the cause of socially responsible business. But a corporate attorney argues that, however well-intentioned, the B Corp structure “undermines the very values that corporate governance advocates should seek to promote: responsible, sustainable corporate decision-making by companies of any stripe.”
With Facebook now claiming more than 840 million active users around the globe – and other social networks surging as well – it’s increasingly clear that boards of major companies need to factor the social media phenomenon into the governance equation. Digital “dashboards” are one way of staying abreast of what’s going on. Another is for the board to recruit a “digital director” – but they’re in short supply.
Across the globe, the trend toward corporate governance reform continues in response to the global financial crisis and to the opening of markets in developing economies. But consultants for the executive search firm Spencer Stuart think some of that may be overdone. “Governance regulation plays a valuable role,” they write, “but those who elevate its standing to that of corporate savior are exaggerating its power.”