New Expectations for Directors
The National Association of Corporate Directors has issued new guidelines for enhancing the professionalism of board members. The key recommendations are that directors should:
-- Become active participants and decision makers in the boardroom, not merely passive advisers.
-- Budget at least four full 40-hour weeks of service for every board on which they serve.
-- Limit board memberships. Senior executives should sit on no more than three boards, including their own. Retired executives or professional directors should serve on no more than six.
-- Consider limits on length of service on a board to 10 to 15 years to allow room for new directors with fresh ideas.
-- Immerse themselves in both the company's business and its industry while staying in touch with senior management.
-- Know how to read a balance sheet and an income statement and understand the use of financial ratios.
-- Own a significant equity position in the company.
DATA: NATIONAL ASSOCIATION OF CORPORATE DIRECTORS
Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.