Acknowledgments ix
Peter C. Browning ix
William L. Sparks x
Preface xi
Why We Wrote This Book xi
Chapter 1 The Changing World of Board Governance: How We Got Here 1
What’s in This Chapter? 1
How and Why Boards Have Changed 2
Why These Events Are Important 3
A Barometer for CEO Compensation 5
2002—A Board Governance Tipping Point 9
Impact of the 2008 Financial Meltdown 14
Chapter Summary 17
What’s Next? 18
Chapter 2 Role of the Board 19
What’s in This Chapter? 19
Home Depot’s Leadership Question 20
Two Key Guiding Principles 22
Why Boards Exist 23
Three Critical Questions That Boards Ask 24
Is the Right CEO Running the Company? 25
Is a Robust Succession Plan in Place? 29
Determining the Right Strategy 30
Chapter Summary 31
What’s Next? 32
Chapter 3 Key Board Leadership Roles 33
What’s in This Chapter? 33
Public Outcry for Action 35
Changes in NYSE Listing Requirements 36
The Debate over the Separation of Roles 37
Nonexecutive Chairman, Lead Director, or Presiding Director 40
The Challenge of Board Leadership 42
Chapter Summary 45
What’s Next? 45
Chapter 4 Board Culture 47
What’s in This Chapter? 47
Understanding Board Culture 48
Examples Illustrating Schein’s Model of Culture and Board Dynamics 50
The Three Elements of Board Culture 51
The Leadership and Board Performance Cycle 58
Transforming Board Culture 63
Chapter Summary 66
What’s Next? 67
Chapter 5 Group Dynamics and Board Decision Making 68
What’s in This Chapter? 68
Why Working in Groups Is Difficult 69
Groupthink: Managing Conflict in the Boardroom 72
Understanding and Avoiding Groupthink 74
Getting Past The Abilene Paradox 76
Chapter Summary 81
What’s Next? 81
Chapter 6 Board Structure and Schedule 82
What’s in This Chapter? 82
Board Size 83
Meeting Requirements and Preparation 84
Effective Meetings and Service 90
Chapter Summary 91
What’s Next? 92
Chapter 7 Assessing Board Performance 93
What’s in This Chapter? 93
The Evolution of Board Assessments 94
Customizing the Assessment Process 96
Finding Your Own Best Practice 98
Chapter Summary 101
What’s Next? 101
Chapter 8 The Challenge of the Disruptive Director 103
What’s in This Chapter? 103
Disruptive Members a Common Issue 104
The Ying and Yang of Conflict 105
An Effective Dissenter 106
Five Types of Disruptive Directors 107
Dealing with Disruptive Directors 109
How Assessments Help 110
Chapter Summary 111
What’s Next? 112
Chapter 9 The Other Succession Challenge: The Board of Directors 113
What’s in This Chapter? 113
Why a Board Needs to Plan for Succession 114
Demographics and Board Service Realities 115
Enron, the 2008 Financial Collapse, and Dodd-Frank 115
Building a Board Succession Plan 117
Educating, Onboarding a New Member 123
Chapter Summary 124
What’s Next? 124
Chapter 10 What’s Next in the Boardroom? 125
What’s in This Chapter? 125
Ongoing Scrutiny of Executive Compensation 127
Continuing Demands for More Proxy Information 129
More Shareholder and Investor Activism 130
Greater Demands for Proxy Access 132
Sharper Focus on Risk Management 133
Ever-Increasing Scrutiny of Board Composition 134
The Way Forward 134
Chapter Summary 135
What’s Next? 136
Appendices Board of Directors Assessment Forms 137
Appendix A Board of Directors Self-Assessment 138
Appendix B Audit Committee Assessment 152
Appendix C Compensation Committee Assessment 154
Appendix D Governance/Nominating Committee Assessment 156
Appendix E CEO Assessment 158
Appendix F Lead Director Assessment 163
Appendix G Nonexecutive Chairman Assessment 165
Appendix H Peer Assesssment 167
Notes 169
About the Authors 179
Index 183
