What The Best Boards Do -- Evaluate performance of CEO annually in meetings of independent directors -- Link the CEO's pay to specific performance goals -- Review and approve long-range strategy and one-year operating plans -- Have a governance committee that regularly assesses the performance of the board and individual directors -- Pay retainer fees to directors in company stock -- Require each director to own a significant amount of company stock -- Have no more than two or three inside directors -- Require directors to retire at 70 years of age -- Place the entire board up for election every year -- Place limits on the number of other boards on which its directors can serve -- Ensure that the audit, compensation, and nominating committees are composed entirely of independent directors -- Ban directors who directly or indirectly draw consulting, legal, or other fees from the company -- Ban interlocking directorships: ''I'm on your board, you're on mine'' Return to main story

Updated June 14, 1997 by bwwebmaster
Copyright 1996, by The McGraw-Hill Companies Inc. All rights reserved.
Terms of Use