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    Board of directors: responsibilities and actions

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    I was reading an article: Strengthening corporate governance through board-level consultants.

    There are some companies under attack for issues of board composition and board activism. Board composition concerns address the mix of internal versus external directors and the competence of board members.

    The activism addresses concerns that focus on the responsiveness of boards to corporate issues that range from inactive to reactive to proactive.

    Which do you think would be the best? Theory suggests outside members should be more independent and have other points of interest and income. To me there are pro and cons to both. But I favor toward the theory side. Then I think if you are getting an income then you would be apt to make sure corporate governance is ethical and follow the guidelines. Then you have others that abuse it. Also what do you think about consultants?

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    Solution Preview

    This question is so broad based it is difficult to know where to start, so I will give you my expectation of a board and of consultants and you can adjust the comments to each area necessary.

    A good board of directors is going to have those in the company's strategic planning and management as members. For larger corporations and those with more than one location, especially globally there should be members who are external as well. This gives the board a better rounded approach to the business, the industry, and the overall markets. Knowing and having a good handle on the needs of the company is absolutely the most important part the BOD plays. With that, there must also be those who can create and maintain the ...

    Solution Summary

    A discussion on the board of directors, their responsibilities and actions, activism, and how it can be effective for a company.