Corporate boards: are things finally starting to improve?

I smiled quietly while reading an article in The Economist this morning, for it seems that calls for boards to add value are finally appearing in mainstream publications with large readership bases. A recent Schumpter blogpost with the rather unfortunate title From cuckolds to captains noted that boards are starting to play a more prominent role in steering companies—and not before time. Are American companies, so long the bastion of the rather legalistic and adversarial agency theory, starting to explore new models of governance? It seems so.

While Schumpter praised recent developments, several important questions were raised. Are boards capable of understanding the business sufficiently well to make informed strategic decisions? Will the CEO forfeit power? Can directors work with the CEO to set strategy and fulfil their monitoring duties? If boards are prepared to engage, and directors co-operate, then the answers to these questions just might be 'yes'. But time will tell. A few boards need to be bold enough to step out from established norms and try these proposals, to see what happens. If they do, they just might be surprised with the result. The proof of the pudding is in the eating, not the making, after all.