RE-INVENTING BOARD LEADERSHIP THROUGH CORPORATE GOVERNANCE
Dr Mario B. Curatolo
Theme 19: Corporate Governance
This paper discusses how the financial crisis of the late twentieth century unveiled not only an existing economic mismanagement of firms but also a profound business leadership crisis.
The economic bonanza that preceded the financial crisis, allowed the questioning of the competence of Board members to guide the strategic destine of modern firms. In this context, Board members’ dependence on the CEO’s advice turned them into “rubber-stamp” instruments of his strategic personal and professional interests. Slowly but surely, the CEOs sidetracked modern firms’ former power structure subverting the Board of Directors’ decision taking role by profiting from their increasing unawareness of rapidly changing market conditions and business reality. This deferring of the Board of Directors’ role as decision makers of the firm, together with the incompetence of the CEOs in their new “leadership vest” and the ongoing financial crisis, impacted negatively on the firms’ business results.
As poor performing organizations came to be associated with poor performing Board of Directors, shareholders, stakeholders and employees began to put pressure on the Board of Directors to regain their lost leadership and contain the unlimited power and influence of the CEO.
Reinventing Board leadership however has come through the development of a Corporate Governance which has promoted the long term interest of shareholders, stakeholders and employees in a sustainable manner through the uncovering of future business opportunities that have helped the firm remain competitive and redefine the role of the CEO. Dr Mario B. Curatolo.
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