Inside the Boardroom
Governance by Directors and Trustees
William G. Bowen
From tales of scandal and gross indifference at nonprofits such as United Way and Empire Blue Cross, to accounts of executive purges within Fortune 500 companies, boards of directors have figured prominently in many sensational news stories over the past few years. In the popular imagination, outside directors are, at last, asserting themselves-or being goaded into action by ever more aggressive institutional shareholders-and seizing the reins of control from once all-powerful CEOs. While this perception may be overly dramatic and inaccurate, the subject of governance-who exercises power, on behalf of whom, and how the exercise of power is controlled-is receiving unprecedented attention. Many believe that we are entering a period of profound change during which boards will assume more authority and be held more accountable than they have been in the past.
In this timely book, William Bowen explores the role of the board of directors in today's for-profit and nonprofit corporations and offers his, at times, controversial recommendations on how boards can better serve the interests of organizations and their stakeholders.
And few writers are as qualified to do so. Over the past three decades, William Bowen has served on the boards of six prestigious nonprofit institutions, including Princeton University and the Smithsonian Institution, and an equal number of high-profile business organizations, including American Express, Merck, and NCR. As a consequence, he possesses an intimate working knowledge of both for-profit and nonprofit boards and speaks with authority on what important lessons each can learn from the other.
Combining eloquent prose with hard-hitting analysis supported by evidence from particular cases and new observations by well-known, knowledgeable CEOs and board members, Bowen provides detailed answers to a number of crucial questions such as: Do boards really matter? To what extent do external checks and constraints preordain outcomes? Is it wise to allow CEOs to serve as board chairmen? In what ways is a board's ability to act effectively influenced by the type of information reported to it and by the reporting mechanisms themselves? Is there an optimal board size and an optimum balance between inside and outside members? How can genuine independence of outside directors be achieved?
Offering a unique insider's perspective on how boards of directors work and how they can be made to work better, Inside the Boardroom is an indispensable resource for board members of both for-profit and nonprofit organizations, as well as presidents, CEOs, general counsel, and senior managers in charge of strategic planning. It also offers new insights for policy-makers and general readers interested in the governance of organizations vital to our well-being.
"The 'old boys' club' of the boardroom no longer works as companies and organizations re-engineer for the global challenge. Dr. Bowen's thoughtful and incisive analysis of issues and his prescriptions for good governance are must reading for all responsible board members." W. Michael Blumenthal, Former Secretary of the Treasury and Limited Partner, Lazard Freres & Co.
1994. New York: John Wiley & Sons, Inc. ISBN: 0471025011