Boards of directors are responsible to be stewards for shareholder value and manage oversight of corporate risk. While the job description is straightforward, the skills needed to balance these duties are changing by the day.
Several features in this issue of C-Suite focus in some way on corporate culture and the inherent risks that boards face if they have blinders on outside of board meetings. Anne Sheehan, the former Director of Corporate Governance for CalSTRS, reminded directors that they serve all the shareholders, not just those in the boardroom. And Andy Fastow, the former CFO of Enron, spoke to us about a technology that measures employee tension, which he believes could have prevented the company’s bankruptcy—and his time in prison.
If you’re joining us at the 9th Annual Equilar Executive Compensation Summit, you’ll also notice another relevant theme in this issue. The cover story identifies how boards must balance those very things I mentioned—shareholder value and corporate success—through executive compensation. Pay sets the tone at the top, driving decisions from the CEO down. If incentives are not properly aligned with shareholder value and long-term strategy, or if targets are too easy to hit, that sends a clear message to stakeholders that the board is not fit to serve.
As always, please enjoy this issue and feel free to reach out to me directly with any feedback.
David Chun
CEO and Founder, Equilar
dchun@equilar.com