Negligence Analysis Of The Board Of Directors

In the book "truth of corporate governance" co authored by Professor lake and Brian Tain, the author reveals the true state of corporate governance. According to normal understanding, the process and system are to ensure the maximization of shareholders' interests and the good operation of enterprises, which is far from P.

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< p > there is no successful prescription in the book. The author thinks that the complexity of governance and the characteristics of the enterprise can not be condensed into a few dry rules and regulations.

On the contrary, Professor Lake believes that institutional reform is often unable to satisfy people's expectations, which can be seen from the collapse of Enron and Lehman brothers.

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< p > "when the loopholes in the management of enterprises are very serious, such as" a href= "//www.sjfzxm.com/news/index_c.asp" > Finance > /a > scandal, the management process is black box operation, the board of directors is internally disintegrated, and all kinds of dereliction of duty do not have a systematic solution to these problems. "

He said, "at the same time, the so-called best practices advocated by governance experts and government officials are often unconsciously overly concerned about the process and rules of governance, ignoring the real essence."

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In the book P, lake and Tyne provide practical research based analysis methods to help identify effective or ineffective factors in corporate governance.

For example, they observed the size, composition, independence and remuneration level of board of directors in managing outstanding companies, and found that these factors were not related to corporate governance level.

In their view, what really matters is the quality of the board, the degree of membership, the amount of energy invested, and the state of communication with the executive layer, which affect the governance level.

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The case of < p > Lehman brothers can prove that there is a big gap between form and essence, and its collapse is directly related to the nonfeasance of the board.

Despite the organizational structure, Lehman's board of directors has no problem. There are many similarities between Goldman's independence and other aspects. What is the board of directors of failing companies? < /p >

Further research will show that, from the professional level of board members and their concern about the company's operation, Lehman's dumping has long been a harbinger. Apart from other problems, there is no one in the board who has real financial service industry background, not to mention that the finance and risk committee only meets two times a year, which is far less for an enterprise based on < a href= "//www.sjfzxm.com/news/index_f.asp" > risk control /a > P.

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< p > the other heavy bomb in the book is related to the succession plan of < a href= "http://pop.sjfzxm.com/popimg/fz/index.aspx" > CEO < /a > most boards of directors lack adequate preparation for leaving CEO.

Generally speaking, the board only spends one or two hours at the annual large conference to discuss this problem, while about 10% to `15% companies change CEO every year, and the situation of unsmooth pfer or disconnection will seriously affect the market value of the enterprise.

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< p > "corporate governance is very important, and we want to help readers clarify basic concepts."

Professor Laker said, "if you can come up with an omnipotent solution, that's good, but we think the best person to solve the problem is the company shareholders who know the situation, have a good understanding of the principles of corporate governance, and know where their boundaries are."

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