Reform Realism and the Boardroom

The board of a 21st century corporation has the imperative to navigate the shoals of regulatory landmines without making a shipwreck of its entrepreneurial energy and strategic thrusts, aptly summarizing one major challenge for directors. Having in...

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Bibliographic Details
Main Author:	World Bank
Format:	Brief
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACQUISITIONS AGENCY COST ARBITRATION BANKRUPTCIES BANKS BOARD MEMBER BOARD MEMBERS BUDGETARY CONTROLS BUSINESS JUDGMENT RULE CAPITAL EXPENDITURE CEO CO-OPERATIVE COLLECTIVE COMMON LAW COMMON LAWS COMPANIES ACT COMPANY COMPLIANCE COSTS CONFIDENTIALITY CONGLOMERATE CORPORATE AFFAIRS CORPORATE FINANCE CORPORATE LAW CORPORATE LAW REFORM CORPORATE LAWS CORPORATE OPPORTUNITIES CORPORATE OPPORTUNITY CORPORATE PRACTICES CORPORATE SECURITIES CORPORATION CORPORATIONS CREDITORS DERIVATIVE DEVELOPING COUNTRIES DISCLOSURE OBLIGATION DUTY OF CARE ECONOMIC CRISIS ENTREPRENEUR FIDUCIARY DUTIES FIDUCIARY DUTY FINANCE CORPORATION FIRMS GLOBAL CORPORATE GOVERNANCE GLOBALIZATION GOVERNMENT CORPORATIONS GOVERNMENT REGULATION HOLDING HOLDING COMPANY INDEPENDENT DIRECTOR INDEPENDENT DIRECTORS INDIVIDUALS INSIDER TRADING INSURANCE INSURANCE COMPANY INTERESTS OF EMPLOYEES INTERNAL CONTROLS INTERNATIONAL FINANCE JOINT VENTURE JURISDICTIONS LAW FIRM LIABILITY LIABILITY TO DIRECTORS LTD. MANAGERS MERGERS MINORITY SHAREHOLDER MINORITY SHAREHOLDERS MISMANAGEMENT PARTY PERSONS REGULATORS REGULATORY AUTHORITIES REGULATORY ENVIRONMENT REGULATORY FRAMEWORK REGULATORY REGIME SAVINGS SECURITIES INDUSTRY SECURITIES LAW SHAREHOLDER SHAREHOLDER RELATIONSHIP SHAREHOLDER VALUE SHAREHOLDERS SOCIAL PERFORMANCE SOCIETIES SOCIETY STAKEHOLDERS SUBSIDIARIES SUBSIDIARY TECHNOLOGICAL CHANGE TRANSACTION TRANSITION ECONOMIES TRUSTEE WEALTH CREATION
Online Access:	http://documents.worldbank.org/curated/en/2007/01/9448035/reform-realism-boardroom http://hdl.handle.net/10986/11173

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Summary:	The board of a 21st century corporation has the imperative to navigate the shoals of regulatory landmines without making a shipwreck of its entrepreneurial energy and strategic thrusts, aptly summarizing one major challenge for directors. Having in place effective corporate governance best practices and training directors to understand their duties are essential steps in improving the sustainability of companies. One principle is that a board can delegate, but it cannot abdicate its responsibilities. This speaks to the fundamental division between the board's role, that of strategic direction, and management's duty of executing the board's strategy. The board must monitor management's performance, even though it does not directly carry out the actions. As Koh notes, courts have rejected the argument that a lower standard of care should apply to non-executive directors than to executive directors.

Reform Realism and the Boardroom

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