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Governance, Risk Management, and Compliance: It Can't Happen to Us—Avoiding Corporate Disaster While Driving Success by Richard M. Steinberg

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Potential Pitfalls

For corporate boards to be well positioned to effectively carry out their responsibilities, directors must bring needed knowledge, skill, and experience to the companies they oversee. We see boards of many companies do well, for instance, in selecting a CEO and senior management team, and making sure the right strategy is in place along with organizational, financial, and human resources for effective implementation. But too many other boards have struggled to do the job, for any number of reasons.

One underlying cause is devoting insufficient time to dissecting and debating issues requiring the board's attention. Being inside boardrooms, we see some directors operate on tight schedules, leaving them unable or unwilling to give needed time and attention to board matters—and they go through the motions without proper deliberation of risks, issues, and events that drive company success or failure.

Board agendas typically are set far in advance of meetings, based on expected needs and historical patterns. Travel arrangements are made and directors schedule other commitments around the established board schedules. As such, a fixed amount of time is set aside for board business, with discussion time shoe-horned into the predetermined schedule. Of course, in times of crisis directors' commitments expand significantly, with other commitments adjusted accordingly. But too often the time set aside for board and committee meetings simply isn't sufficient, especially in ...

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