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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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Obtaining Critical Information

Every corporate director knows he or she needs relevant information to carry out oversight responsibilities effectively. But it's not easy to know exactly what that information should be, the form it should take, or where it should come from. Unfortunately, too often boards of directors don't sufficiently focus on these issues, and they get caught by surprise and pay a steep price.

For board members as well as corporate officers and staff working with boards it's worth looking at how to ensure effective communication of genuinely important information. There are different perspectives: boards worry about whether they are receiving proper information, and the senior executives are concerned about whether they are sending the right information. They are two sides of the same coin, and one cannot work without the other. We'll begin with board members' perspective.

Through Directors' Eyes

Directors obtain the most relevant information from the CEO and senior executives in direct discussions in the boardroom and offline. Yes, they get important information from written materials presented in board books in advance of meetings, preferably with clear signs directing attention to critical issues. But unfortunately, it's not uncommon for written information to be less than adequate. Several boards I've worked with—for example, one in the utility industry, another in transportation—had been receiving board books that didn't provide needed analysis instead of ...

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