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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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New Models for Board Governance

To say that these are challenging times to be a corporate director is an understatement. Shareholders are clamoring for greater ability to determine what happens in the boardroom and who sits in the seats; the SEC has put forth a host of new rules requiring a broad range of expanded disclosures, with many more coming down the pike; and the pace of lawsuits continues unabated. All this occurs with memories still fresh of the financial system's near collapse, against a backdrop of an economy still emerging from the Great Recession.

As if that's not enough, directors continue to struggle in their roles as monitors ensuring that management properly deals with ever-expanding legal and regulatory compliance issues and otherwise does the right thing, while focusing on company strategy and performance in a fast-changing and highly competitive environment. The need to spend increasing amounts of time on board business is exacerbated by expanding committee service, where governance/nominating, compensation, and audit committees are subject to more and more rules and taking on lives of their own. And when a regulatory action, takeover initiative, or other life-changing corporate event creates something akin to a crisis environment, the pressure and demands on directors' time can become almost unbearable.

Directors, institutional investors, and other shareholders are asking a legitimate question: With the current governance model, can boards of directors truly ...

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