A corporate board’s traditional role has been that of looking at, advising and consenting on a company’s strategic focus and growth. Sub-groups (committees) of the traditional board are usually charged with oversight on compensation, audits, compliance, etc., and are comprised of board members with experience and knowledge of those areas. Rarely, if ever, do these types of boards bother themselves with operating issues, especially those of day-to-day activities.
Relatively recent spectacular corporate failures related to financial issues, governance or both (Enron, HP, WorldCom, et al), have caused boards to become more focused and almost solely concerned with compliance, like Sarbanes Oxley, and other legal issues. At the same time, low priority (or none at all) is placed on strategic focus and growth. This approach has become so pervasive that many boards are losing key members in resignations or choosing not to stand for re-election. HP recently lost two key board members (Tom Perkins and George Keyworth), both of whom cited this very issue as one of their reasons for resigning.
