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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''

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Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.
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