Restoring Trust in Corporate Governance
If American business leaders are to restore public confidence in how companies are run, boards of directors must discharge six essential, closely interrelated tasks. That is the message of a new CED policy brief, Restoring Trust in Corporate Governance: The Six Essential Tasks of Boards of Directors and Business Leaders. The brief was written by Ben W. Heineman, Jr., CED Trustee and former Senior Vice President and General Counsel for General Electric Corporation, with the consultation and advice from the CED's Subcommittee on Corporate Governance.
"These tasks require a redefinition of corporate mission and CEO role," said Heineman, "to make fundamental the balance of risk-taking with risk management and the fusion of high performance with high integrity. They are essential to restoration of trust in corporate governance but, more importantly, to make credible corporate accountability--the profound issue underlying corporate governance. Boards and senior executives must discharge these six seamless tasks, regardless of outcomes in current regulatory debates, not because they are "nice to do" but because it is profoundly in the self interest of private sector leadership to take the initiative and powerfully answer the legitimate criticisms of business decision-making in recent years."
January 25, 2010
Ben W. Heineman Jr.
Senior Fellow, Schools of Law & Government, Harvard University