Tag Archive for ‘Governance’
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.”
Corporate governance expert Paul Strebel says the repeated failure of boards to intervene early enough to avert corporate disasters reflects a serious problem in the boardroom that cannot simply be swept under the carpet: boards are out of touch often with those who can make or break a company.
With the death of long-time football coach Joe Paterno, Penn State enters a new stage of its crisis stemming from criminal sex abuse charges against a former assistant coach. Columnist Gael O’Brien thinks the university’s trustees have made numerous mistakes and says the institution now must learn “how to tolerate discomfort with unflattering headlines while the focus is on trust building, not brand building.”
Columnist Gael O’Brien says recent crises at University of California Davis, Syracuse University and Penn State University raise questions about the role of risk management on campuses. One problem, she writes, is that university leaders “often don’t have practice thinking through how their values, and those of the institution, will come into play in a variety of different potential situations.”
California Governor Jerry Brown recently signed into law competing bills that create two new corporate forms — a “flexible purpose corporation” and a “benefit corporation” — intended to allow entrepreneurs and investors the choice of organizing companies that can pursue both economic and social objectives. Here’s a legal analysis of the implications for businesses with a social purpose.