The Role of Corporate Boards: A Roundtable Discussion of Where We're Going and Where We've Been

16 Pages Posted: 12 Apr 2017

See all articles by Matt Orsagh

Matt Orsagh

CFA Institute

Jesse Greene

IBM Corporation

Raj Gupta

Rohm and Haas Company

Sophie L'Helias

International Corporate Governance Network; Hawkamah Institute for Corporate Governance; LeaderXXchange

Bill McCracken

Columbia University - Law School

Date Written: Winter 2017

Abstract

In this roundtable that took place at the 2016 Millstein Governance Forum at Columbia Law School, four directors of public companies discuss the changing role and responsibilities of corporate boards. In response to increasingly active investors who are looking to management and boards for more information and greater accountability, the four panelists describe the growing demands on boards for both competence and commitment to the job. Despite considerable improvements since the year 2000, and especially since the 2008 financial crisis, the clear consensus is that U.S. corporate directors must become more like owners of the corporation who “truly represent the long‐term interests of all of the shareholders.”. But if activist investors appear to pose the most formidable new challenge for corporate directors—one that has the potential to lead to shortsighted managerial decision‐making—there has been another, less visible development that should be welcomed by wellrun companies that are investing in their future growth as well as meeting investors’ expectations for current performance. According to Raj Gupta, who serves on the boards of HewlettPackard, Delphi Automotive, Arconic, and the Vanguard Group,. Although these investors are “bringing enormous pressure to bear on management,” the good news for managements and boards is that such concentration of ownership should make it far easier for them to build trust by making their case directly to “the investment community,” and so win the market support that can give companies the “breathing room” to carry out their long‐term business plans. Another piece of encouraging news for boards is that, by drawing on a more diverse pool of directors than in the past—one that includes a rapidly growing number of women, people of color, and “internationals”—they are finding themselves with a breadth of perspective and experience that has better prepared them to respond to changes in an increasingly global and volatile business environment.

Suggested Citation

Orsagh, Matt and Greene, Jesse and Gupta, Raj and L'Helias, Sophie and McCracken, Bill, The Role of Corporate Boards: A Roundtable Discussion of Where We're Going and Where We've Been (Winter 2017). Journal of Applied Corporate Finance, Vol. 29, Issue 1, pp. 22-35, 2017, Available at SSRN: https://ssrn.com/abstract=2950837 or http://dx.doi.org/10.1111/jacf.12218

Matt Orsagh

CFA Institute ( email )

915 East High Street
Charlottesville, VA 22902
United States

Jesse Greene (Contact Author)

IBM Corporation ( email )

IBM MACC Center
33 Maiden Lane
New York, NY 10038
United States

Raj Gupta

Rohm and Haas Company

United States

Sophie L'Helias

International Corporate Governance Network

London W1B 1AH
United Kingdom

Hawkamah Institute for Corporate Governance ( email )

P.O. Box 506767
Dubai
United Arab Emirates

HOME PAGE: http://www.hawkamah.org

LeaderXXchange ( email )

P.O. 726 North Washington Street
Alexandria, VA 22314
United States

HOME PAGE: http://www.leaderxxchange.com

Bill McCracken

Columbia University - Law School

435 West 116th Street
New York, NY 10025
United States

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