Corporate Directors: Who They Are, What They Do, Cyber Risk and Other Challenges
64 Pages Posted: 25 Feb 2021 Last revised: 26 May 2022
Date Written: February 24, 2021
Recently, professors Bebchuk, Kastiel, Tallarita, Strine, Rock and others have continued the “fundamental and heated debate about the purpose that corporations should serve, an increasingly influential ‘stakeholderism’ view advocates giving corporate leaders the discretionary power to serve all stakeholders and not just shareholders. Supporters of stakeholderism argue… address[ing] growing concerns about... [the impact] on society and the environment.” Elsewhere, professors Roe, Spamann, Fried, and Wang, critique the 2020 European Commission report, “Study on directors’ duties and sustainable corporate governance.”
On November 9, 2020, six experienced corporate governance professionals gathered to discuss the duties and responsibilities of corporate directors and contemporary challenges, including: cyber risk; pandemic; and diversity. Sponsored by the Business Law Association of Prairie View A&M University, our article results from that effort and is augmented with relevant scholarship citations where appropriate to assist the reader who is interested in more information. During 2020 and 2021, global governments, their citizens, and businesses all encountered disruptive economic and political stress. Particularly in such challenging times, effective corporate governance is essential for: business formation; the creation and growth of jobs; and maintenance of the economic engine that powers economies and allows for an environment fostering healthy populations and world peace. During stressful tragedies like the 2020-21 global pandemic, instances of corporate cyberbreach, and other times of crisis, it is the responsibility of corporate directors to provide the governance oversight to business enterprises as they navigate the struggle to preserve jobs and provide for corporate survival. Our article inevitably fails to resolve the ongoing debate regarding the full scope of corporate purpose. However, we believe our comments and observations add to the necessary and important continuing discussion about the efficient functioning of directors as they seek to discharge their duties and responsibilities, particularly with regard to governing cybersecurity risk and issues of board diversity.
Keywords: AICPA; audit committee; board; directors; breach; business judgment rule; Center for Audit Quality (CAQ); code of conduct; committee charters; compensation; corporation; corporate governance; crisis; cyber; diversity; duties of loyalty & care; executive compensation; finance; nominating & governance
JEL Classification: G18, G20, K22, K23, N14, M15, M40
Suggested Citation: Suggested Citation