Enron has shaken the corporate world to its foundations. The trial is over but directors and managers are still asking what lessons are to be drawn from the debacle. Chances are the questions will still be asked after Ken Kay and Jeff Skilling are put away.
The National Association of Corporate Directors has come out with its blueprint for company boards.
The document The Enron Code: The Hidden Lesson has a nine-point plan for boards. Sure, it amounts to best corporate governance practice (e.g. the majority should be independent directors, key committees like audit, compensation and nominating committee should comprise entirely independent directors). But some of it, like the regular evaluation of the board as a whole and of independent directors, is just a hard slog.
NACD president Roger Raber said as much in his testimony to Congress four years ago.
In his words, it could be boiled down to a few key points: "independence, information, and integrity-especially the courage to ask the tough questions."
But is that enough. Roger Martin from the University of Toronto has come up with a more radical solution in the Harvard Business Review.
Martin argues that boards are structured in a way that ensures the directors will not look after the interests of shareholders and that new measures. One of his ideas is for directors to be part of a global club.
His piece, Directing For All The Wrong Reasons can be read here.
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