This might sound like a rather odd question to ask, because an affirmative answer seems so obvious. Yet in my experience, many Boards do not exercise the option of seeking advice directly, despite the benefits of doing so being clear. Generally, Boards turn to the CEO to fill information gaps, because they are well-placed to provide the additional information required. However, the CEO is not always the best source of information.
In what situations should the Board engage independent advisors directly? Whenever independence is crucial, or there is a conflict of interest. Three areas emerge as prime candidates to engage independent advice (although there may be others as well):
If Boards are truly committed to acting in the best interests of the company (or the shareholder, depending on the jurisdiction), the answer must, unequivocally, be "yes".
My hope for 2013 (and beyond) is that more Boards will start to walk the talk.
(*) contact me for references.
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Thoughts on corporate governance, strategy and boardcraft; our place in the world; and other topics that catch my attention.