The Director's Manual

Chapter 3Key Board Leadership Roles

What's in This Chapter?

• Why Leadership Roles Have Changed
• The Debate about Role Separation
• Nonexecutive Chairman/Lead or Presiding Director
• The Challenge of Board Leadership
• Chapter Summary and What's Next

Corporate boards and their internal governing policies and procedures are directly influenced by the societal concerns of the moment and the overall vibrancy of the business environment and economy. As we noted in Chapter 1, “The Changing World of Board Governance: How We Got Here,” each board is unique and responds to challenges in ways that suit its individual circumstances and culture. This chapter explores how some of the most game-changing social and economic challenges faced by boards over the last twenty years have altered both governance policies and practices, and, importantly, how CEOs interact with their boards.

As discussed briefly in Chapter 1, the 1990s was an era of economic expansion. Then Secretary of the Treasury Alan Greenspan even characterized those years as a time of “irrational exuberance” in a 1996 speech given at The American Enterprise Institute for Public Policy Research.¹

The Dow Jones Industrial Average began the decade at 2,563 and climbed year after year during what became known as the dot.com bubble until it reached 11,501 at the end of the cycle. When the bubble burst, the economic fallout across the board was swift and painful for individual and institutional investors who lost billions of dollars, while ...