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Governance, Risk Management, and Compliance: It Can't Happen to Us—Avoiding Corporate Disaster While Driving Success by Richard M. Steinberg

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Bottom Line

What it comes down to is that a board is best comprised of individuals with the background, knowledge, skills, experience, and other attributes to collectively position the board to provide the most valuable advice, counsel, and direction to and monitoring of the chief executive and senior management team. Board composition should reflect and be commensurate with the company's industry, business, circumstances, and needs. And directors should have the wherewithal and strength of character to do the job well, especially in times of stress.

Among the critical factors is that the directors can work together cohesively and collegially—debating without rancor and ensuring effective boardroom dynamics. The directors need to work together and with management to give the company the greatest likelihood of success for all shareholders.

Getting board composition right has always been a critical element in a company's success, and today it's more important than ever. As you look around the board table from the perspective of director or management, you want to be sure the directors occupying these seats are qualified and positioned to do their job well. You, your colleagues, and shareholders deserve nothing less.

Notes

1. Daniel Gross, “ Corporate Killers,” Newsweek, February 3, 2010.

2. Spencer Stuart Board Index, 2010.

3. Spencer Stuart Board Index, 2010.

4. Spencer Stuart notes that only 26 percent of S&P 500 assessments include the individual director level.

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