Governance in the Digital Age

CHAPTER 6 Directors and Personal Accountability

Boards that take competition seriously in the digital age will stay the most effective and vibrant. And board members who embrace the rate of change and make the effort to self-educate will be the most valuable.¹

— Betsy Atkins

Value creation, just-in-time strategy, and achievement of ESG goals and activities all ultimately depend on optimal performance by individual directors. Meanwhile, there’s been a massive expansion of responsibility and liability in corporate governance, putting individual board members under scrutiny and risk like never before.

In 2018, Facebook shareholder Jeremiah Hallisey sued a bevy of top executives: founder and CEO Mark Zuckerberg, COO Sheryl Sandberg, and board members Marc Andreessen, Peter Thiel, Reed Hastings, Erskine Bowles, Susan Desmond-Hellmann, and Jan Koum.² The charge: failing to prevent misappropriation of data by Cambridge Analytica and failing to inform affected Facebook users and the public markets.

This case represents just the tip of the iceberg. Directors and executives are facing shareholder lawsuits for losses stemming from crises like data breaches, sexual harassment and discrimination, poor incentive design, and beyond. Cases against companies from Home Depot to 21st Century Fox have accused directors and managers of failing to uphold their fiduciary duties of due care, loyalty, and good faith. For governance professionals, the pressure is on to protect their finances, careers, ...