Boards of directors or trustees are important actors in the leadership process of organizations and firms. They can be very influential, both by what they do but more importantly by what they might fail to do. As with an infestation of termites, the consequences of failure by a board are visible long after the damage has occurred to the inside of the structure. Two broad responsibilities define what boards do, or should do: monitoring management on behalf of stakeholders and providing expertise, contacts, and other resources.55 Board membership thus entails an ambivalent, two-sided role: You are at once a critic and monitor of the organization as well as an advocate for the organization. It takes skill and sometimes courage to do both jobs well.
These two functions—monitoring management and providing resources—are interlinked with each other and related to media coverage and to firm performance, though these relationships are complicated.56 It is in the best interests of shareholders for boards to be both faithful to their monitoring responsibilities and to work smoothly. Boards that run efficiently get along with top managers. Too much discord, as was the case at Hewlett-Packard during Carly Fiorina's tenure as CEO, does not help anyone.57
How to spot a fraud
Harry Markopolos, a financial analyst, alerted the U.S. Securities and Exchange ...