Book description
Build a more effective board with insight from the forefront of corporate governance
The Handbook of Board Governance provides comprehensive, expert-led coverage of all aspects of corporate governance for public, nonprofit, and private boards. Written by collaboration among subject matter experts, this book combines academic rigor and practitioner experience to provide thorough guidance and deep insight. From diversity, effectiveness, and responsibilities, to compensation, succession planning, and financial literacy, the topics are at once broad-ranging and highly relevant to current and aspiring directors. The coverage applies to governance at public companies, private and small or medium companies, state-owned enterprises, family owned organizations, and more, to ensure complete and clear guidance on a diverse range of issues. An all-star contributor list including Ram Charan, Bob Monks, Nell Minow, and Mark Nadler, among others, gives you the insight of thought leaders in the areas relevant to your organization.
A well-functioning board is essential to an organization’s achievement. Whether the goal is furthering a mission or dominating a market, the board’s composition, strategy, and practices are a determining factor in the organization’s ultimate success. This guide provides the information essential to building a board that works.
- Delve into the board’s strategic role in value creation
- Gain useful insight into compensation, risk, accountability, legal obligations
- Understand the many competencies required of an effective director
- Get up to speed on blind spots, trendspotting, and social media in the board room
The board is responsible for a vast and varied collection of duties, but the singular mission is to push the organization forward. Poor organization, one-sided composition, inefficient practices, and ineffective oversight detract from that mission, but all can be avoided. The Handbook of Board Governance provides practical guidance and expert insight relevant to board members across the spectrum.
Table of contents
- Cover
- Praise for The Handbook of Board Governance
- Title Page
- Copyright
- Dedication
- Foreword
- Preface
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I: The Board's Responsibilities
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Chapter 1: The Handbook of Board Governance: An Introduction and Overview
- Introduction and Overview
- Diversity of Authorship
- Drivers and Impediments to Improved Corporate Governance
- Précis of This Handbook's Chapters
- Part I: The Board's Responsibilities
- Part II: What Makes for a Good Board? Independence, Competency, Dynamics, and Behaviors
- Part III: Risk Governance, Assurance, and the Duties of Directors
- Part IV: The Rise of Shareholder Accountability
- Part V: The Unsolved Governance Problem: Performance Measurement And Executive Pay
- Part VI: Governance of Information Technology
- Part VII: Governance of Sustainability: Boards' Changing Roles
- Part VIII: Governance of Different Forms
- Conclusion: Future of Board Governance and Unresolved Issues
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Chapter 2: Boards That Lead
- A New Model of Collaborative Leadership
- “One of the Greatest Business Decisions of All Time”
- Monitor and Leader
- Duty of Leadership
- When to Lead, When to Partner, and When to Stay Out of the Way
- Recruiting Directors Who Build Value
- The Director's Checklist
- Conclusion: Boards That Lead
- Notes
- References
-
Chapter 3: Trends in Corporate Governance
- Trend 1: Increased Usage of Corporate Governance Codes
- Trend 2: Higher Levels of Regulation and Enforcement
- Trend 3: Greater Board Diversity
- Trend 4: More Focus on Strategy, Value Creation, and Corporate Responsibility
- Trend 5: Greater Emphasis on the Governance of Risk
- Trend 6: Greater Emphasis on Information Governance
- Trend 7: Greater Emphasis on Compensation Governance
- Trend 8: Greater Emphasis on Accountability and Responsibility to Shareholders and Other Stakeholders
- Trend 9: Increased Usage of Board Evaluations and Board Performance Development
- Trend 10: Director and Board Development
- Conclusion
- Notes
- Chapter 4: Governance as a Corporate Discipline
- Chapter 5: The Nonexecutive Chairman: Toward a Shareholder Value Maximization Role
- Chapter 6: CEO Succession: An Owner's Guide for Directors
- Chapter 7: CEO Succession Planning: CEO Succession Planning
-
Chapter 1: The Handbook of Board Governance: An Introduction and Overview
-
II: What Makes for a Good Board? Independence, Competency, Dynamics, and Behaviors
-
Chapter 8: Director Independence, Competency, and Behavior
- The Regulatory Focus on Director Independence May Occur at the Expense of Industry Expertise
- Moving Beyond Director Independence
- Regulatory Emphasis on Director Independence
- Boards Should Collectively Decide: How Much Compromising of Director Independence Is Acceptable?
- Director Competency
- A New Requirement: Board Diversity Matrix
- Director Behavior
- Assessing Overall Director Effectiveness
- Conclusion
- Notes
- References
- Chapter 9: The Criticality of Board Director Team Intelligence (TQ) in Economic Value Creation
- Chapter 10: Lessons from the Banking Crisis: Leadership and Effective Board Behaviors
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Chapter 11: The Challenge of Director Misconduct
- Defining Expectations for Director Behavior
- Forms of Director Misconduct
- Disclosures of Confidential Information
- Valued Behaviors for Directors
- Appropriate Dissenting Director Behavior
- Strategies to Prevent Director Misconduct
- Director Resignations: Form 8-K Disclosure Obligations
- Addressing Director Misconduct
- Conclusion
- Note
-
Chapter 8: Director Independence, Competency, and Behavior
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III: Risk Governance, Assurance, and the Duties of Directors
- Chapter 12: The Rise and (Precipitous, Vertiginous, Disastrous) Fall of the Fiduciary Standard
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Chapter 13: The Duties and Liabilities of Directors—Getting the Balance Right
- Why Should Directors Have Duties?
- The General Duties of Directors under Corporate Law
- What Objectives Should Directors Pursue?
- The Business Judgment Rule—A Get-Out-of-Jail Card for Directors?
- Enforcing Directors' Duties
- Beyond Corporate Law—Other Sources of Liability for Directors
- Directors' Personal Exposure to Financial or Criminal Liability—Overwhelming Burden or Empty Threat?
- Conclusion: The Balance between Personal Accountability and Liability Overkill
- Notes
-
Chapter 14: Best Practices in Parent and Subsidiary Governance
- Part I: Overview of Parent and Subsidiary Governance
- Part II: Parent Company Liability for the Actions of Subsidiaries
- Traditional Exceptions for Holding Parent Companies Liable for Their Subsidiaries
- Emerging Tort Law Liability as a New Exception
- Part III: Leading-Edge Practices in Subsidiary Governance
- How Much Direction and Oversight Should a Parent Corporation Exercise over Its Subsidiaries?
- Part IV: Conclusion
- Notes
- Chapter 15: The Role of the Board in Risk Management Oversight
- Chapter 16: Board Oversight of Internal Audit: How to Maximize Internal Audit Value
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Chapter 17: Three Lines of Defense versus Five Lines of Assurance: Elevating the Role of the Board and CEO in Risk Governance
- The Origins of the Three Lines of Defense (3LoD)
- Regulatory Endorsements to Date
- 3LoD Contrarian Positions
- Suboptimal and Even Dangerous Elements of 3LoD
- Five Lines of Assurance—What Is It?
- Five Lines of Assurance—Why Is It Better?
- Benefits of the Five Lines of Assurance versus 3LoD
- Conclusion
- References
-
Chapter 18: Commercial and D&O Insurance for Large Corporations: Best Practices in Protecting the Assets and Liabilities of Directors and Officers and Their Organizations
- The Key Organizational Risks (Insured and Not Insured)
- Directors and Officers Insurance
- Summarizing Insurance and Claims for Board Oversight Purposes
- Roles and Responsibilities
- The Insurance Marketing Process
- Conclusion
- Appendix A: Checklist of Key D&O Policy Extensions
- Appendix B: Broker Responsibilities, Sample Broker Service Agreement
- Appendix C: Checklist—The Process for Marketing Large Insurance Programs
- Appendix D: Director's Questions
- Notes
-
IV: The Rise of Shareholder Accountability
- Chapter 19: The Happy Myth, Sad Reality: Capitalism without Owners Will Fail
- Chapter 20: Board–Shareholder Engagement1
-
Chapter 21: The Individual's Role in Driving Corporate Governance
- From Robots to Democracy
- Companies without Owners
- Taking Responsibility
- Life-Affirming Foundations
- When Humans Bring Their Values to the Corporation
- Current Pay Practices Work Against Creating Long-Term Value
- Status and Power
- The Example of Norway
- How Much Will Government Help?
- Fiduciary Duty
- Research Points to Public Opinion as a Driver
- Retail Investors Who Made a Difference
- Conclusion
- Notes
- Chapter 22: Thoughts on the Origins and Development of the Modern Corporate Governance Movement and Shareholder Activism
-
V: The Unsolved Governance Problem: Performance Measurement and Executive Pay
- Chapter 23: Peer Groups: Understanding CEO Compensation and a Proposal for a New Approach
- Chapter 24: The Effective Compensation Committee
-
Chapter 25: Human Resource Management: The Role of Boards
- Human Resources Information Available to Boards
- Human Resources Expertise on the Board
- Monitoring Human Resources Effectiveness
- Sources of HR Information and Knowledge Gap
- What Price Do Boards Pay for the HR Gap?
- How Boards Can Address Their HR Effectiveness Gap
- Establish Quadruple Bottom Line Public Reporting
- Capacity Development
- Conclusion
- References
-
Chapter 26: Designing Performance for Long-Term Value: Aligning Business Strategy, Management Structure, and Incentive Design
- Defining Performance and Missing Metrics
- What About Earnings per Share (EPS) as a Performance Metric?
- Connecting Current and Future Value to Total Shareholder Return
- Aligning Management Structure with Innovation and Future Value
- Current Value, Future Value, and Rethinking Long-Term Incentive Design
- Explaining Performance and Pay for Performance
- Conclusion
- Glossary
- Notes
-
Chapter 27: Measuring and Improving Pay for Performance: Board Oversight of Executive Pay
- The Three Basic Objectives of Executive Pay
- A Brief History of Executive Pay
- Why Percent of Pay at Risk Is Not a Meaningful Measure of Incentive Strength
- Measuring the Three Basic Objectives of Executive Pay
- The Design Implications of the Measurement Analysis: Perfect Pay Plans
- Benchmarking Pay for Performance
- Why Say-on-Pay Approval Rates Are So High
- Why the Guidance from CalPERS, NACD, ICGN, and ISS Is Not Very Helpful for Directors
- The Challenge Facing the Individual Director
- Conclusion
- Notes
-
VI: Governance of Information Technology
- Chapter 28: Information Technology and Cybersecurity Governance in a Digital World
-
Chapter 29: The Board's Role in the Governance of Enterprise Information and Technology
- The Skill Shortage
- What Is Governance of Enterprise Information and Technology (GEIT)?
- How Bad Is the Board Capability Problem?
- Benefits of Boards Building IT Leadership Capability
- Winners and Losers
- Areas of IT Risk Boards Must Capably Govern
- Three Barriers to Effective GEIT
- Are Current Governance Oversight Practices Serving Your Board When It Comes to Technology Risk?
- IT Governance Reporting to the Market and Investors
- The Role of Audit in IT Risk, and the COBIT5 Control Framework
- Board Accountabilities and New Competencies
- Practical Steps to Get Started Transforming Your Board
- Conclusion
- Notes
- References
-
VII: Governance of Sustainability: Boards' Changing Roles
- Chapter 30: Responsible Boards for a Sustainable Future
- Chapter 31: The Board's Role in Sustainability Governance: Connecting Long-Term Value Creation and Executive Compensation
- Chapter 32: Board Governance for a Better World
- Chapter 33: Corporate Governance: Ethics and Legal Compliance, Risk Management, and Political Activities
-
VIII: Governance of Different Forms
- Chapter 34: Transforming Nonprofit Boards to Function in the Twenty-First Century
- Chapter 35: Startup Boards—All In for the Company
- Chapter 36: Systemically Overlooked Anomalies of Governing Small-Cap Companies
-
Chapter 37: Boards and Value Creation in Family Firms: An Extended Team Production Approach
- Understanding Values and Value Creation in Family Firms
- Boards and Value Creation in Family Firms
- The Extended Team Production Approach for Understanding Boards and Governance
- The Contribution of Boards in the Value Chain
- Board Competences, Core Capabilities, and the Value Chain
- Developing Boardroom Dynamics in Favor of a Team Production Culture
- Conclusion
- References
- Chapter 38: Succession in Family Businesses
- Chapter 39: From Regulation to Enforcement of Corporate Governance in the Middle East and North Africa
- About the Editor
-
About the Authors
- Alissa Amico
- Yılmaz Argüden
- Roger Barker
- Andrea Calabrò
- Dennis Carey
- Ram Charan
- Solange Charas
- Jay A. Conger
- Steven De Haes
- Charles M. Elson
- Adam J. Epstein
- Craig K. Ferrere
- Richard Fields
- Eugene H. Fram
- John R. S. Fraser
- Jonas Gabrielsson
- Anthony Goodman
- Holly J. Gregory
- Steven Hall
- Steven Hall Jr.
- Mary Halton
- Lauren C. Hanlon
- John M. Holcomb
- Morten Huse
- Alice Korngold
- David F. Larcker
- Edward E. Lawler III
- Richard Leblanc
- Tim J. Leech
- Jon Lukomnik
- Stephen J. Mallory
- Nora McCord
- James McRitchie
- Nell Minow
- Robert A. G. Monks
- Mark B. Nadler
- Stephen F. O'Byrne
- Douglas Y. Park
- Chris Pierce
- Poonam Puri
- Adam Quinton
- Drew Stein
- Brian Tayan
- Greg Timbrell
- Michael Useem
- Elizabeth L. H. Valentine
- Mark Van Clieaf
- Henry D. Wolfe
- Ronald Zall
- Bob Zukis
- Index
- End User License Agreement
Product information
- Title: The Handbook of Board Governance
- Author(s):
- Release date: May 2016
- Publisher(s): Wiley
- ISBN: 9781118895504
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