A very interesting article in the Harvard Business Review this month; some highlights:
"When the world's largest financial institutions had to be rescued from insolvency in 2008 by massive injections of governmental assistance, many blamed corporate boards for a lack of oversight"
Mastery of the understatement there then! And:
"The Citigroup board was filled with luminaries from many walks of life. Yet in early 2008 only one of the independent directors had ever worked at a financial services firm"
The Harvard cartoon had added poignancy when I read, therefore with hightened interest, an article in today's FT: "Citigroup looks to revive European presence"
The Harvard article went on with the following:
"The model for corporate governance is broken. Despite having boards crammed with eminent independent directors following detailed procedures, many of the world's largest financial institutions had to be rescued from insolvency in 2008....yet all the firms that failed were SOX (Code) compliant."
The article overall is making a plea (and a good case) for the introduction of "Professional Boards" and I hope we are moving, however slowly, toward that. In the interim, it highlights further the need for excellent external board performance evaluation and an end to a "tick-box" approach. Well, you have to have a dream!!!
There was certainly some irony in both these landing on my desk on the same day!
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