Do corporate officers such as CEOs and CFOs have fiduciary duties to the corporation? Do senior executives owe the same responsibilities to the corporation as board members? These questions often lie in the shadow of the board of directors’ fiduciary duties as a corporate governance issue. Many CEOs and other senior executives do not realize...
What fiduciary duties does the board of directors have to the corporation? Potential and sitting board members care about the scope of these duties as a corporate governance issue. Shareholders can sue directors for breach of fiduciary duties through a derivative action (and directly in certain instances) and hold them personally liable for damages to...
What is the role of board meetings in corporate governance for startups? Many participants in the entrepreneurial ecosystem, like venture capitalist Mark Suster of GRP Partners, have provided advice on how to run effective board meetings at startups. A question on Quora about how to run effective board meetings generated many suggestions. Indeed, I offered...
Corporate governance, especially board composition, is an area that many non-profit organizations pay insufficient attention to. At many non-profits, the board of directors consists either of friends of the organization's officers or local business or government luminaries. The issue of board composition becomes an afterthought. The process becomes random and haphazard. However, the non-profit board...
Boards of directors have two major corporate governance responsibilities: strategy and risk oversight. Within risk oversight, a large concern is compliance with legal and regulatory rules. Strategy and compliance, however, compete for the time and attention of directors. Why does this happen? What is the consequence? 1. Compliance commands attention because of its complexity and...
When you think about what startups and their venture capitalists should focus on, does corporate governance quickly come to mind? Probably not. But it should. As with public company boards of directors, boards of venture backed companies should emphasize strategy execution and risk oversight. Startups, though, face special challenges. Accordingly, the boards of directors of...
The New York Stock Exchange (NYSE) Commission Report on Corporate Governance Principles contains ten principles for better corporate governance. The principles address the common interests of the board of directors, management, and shareholders regarding the underlying purpose of corporate governance. One principle underscores the central role of business strategy in governing the corporation: Good corporate...
HP CEO Mark Hurd recently resigned, supposedly because Hurd submitted inaccurate expense reports to conceal a relationship with contractor Jodie Fisher. In a letter to the HP board, Fisher alleged that Hurd sexually harassed her. After investigating the allegation, the HP board concluded that Hurd had not violated HP's sexual harassment policy. Hurd has paid...
What do private companies about to do an IPO worry about most? Corporate governance. That's right -- corporate governance, according to recent polls conducted by KPMG. 64 percent of executives named corporate governance as one of their top three concerns about going public. Recent events demonstrate that corporate governance is an important issue for public...
CEO compensation once again reared its head in the corporate governance debate. This time, corporate governance and CEO compensation collided over Abercrombie & Fitch CEO's use of the company's private jet. Troubled clothing maker Abercrombie & Fitch paid CEO Mike Jeffries $4 million to end his jet perk. Jeffries can no longer use the Abercrombie...