Getting appointed CEO just isn't what it used to be. For generations, the CEO was also chairman of the board, and directors rubber-stamped his wishes. But the Sarbanes-Oxley Act and sudden financial crises have forced radical change on U.S. public company boards, Ralph D. Ward writes in his new book, "The New Boardroom Leaders." Directors, he says, now must meet without management, face tough new independence rules, and bear unavoidable legal responsibility to provide truly independent company oversight.
The result: a new demand that American corporate boards develop strong, independent leaders from within, mostly from scratch. But how? That's what Ward, long-time editor of The Corporate Board magazine and Boardroom INSIDER newsletter, explores in his book through conversations with the independent chairs, lead/ presiding directors, CEOs, and committee chairs who are making this change happen.
Ward notes the board's role will gain new importance with the U.S. bank bailout and corporate loan programs. These likely will include strong corporate governance provisions on CEO pay and shareholder rights. Thus, he says, "if we end up with a weakened corporate sector forced to play by the government's rules, radical corporate governance reform instantly becomes the new normal.