biz boards

On the subject of how boards of directors work (or don't), here are some conclusions from a survey of big-time businesses in the USA:

10th Annual Corporate
Board Effectiveness Study
2006-2007
USC Marshall School of Business

board effectiveness

Some 95% of directors rate their boards as either effective or very effective overall.
Directors are generally positive about all aspects of their fiduciary oversight, and
their rating of their effectiveness at ensuring ethical behavior continues to rise.
Only 59% of the directors responded favorably when asked to rate their boards’
effectiveness in shaping long-term strategy.
Only 63% of the directors responded favorably when asked to rate their boards’
effectiveness in planning for CEO succession.
A great majority (84%) of directors say they have effective evaluation of CEO
performance but far less effective processes for evaluation of individual directors.

monitoring

Only 33% of directors say they monitor company culture to a great or very great
extent and only 32% closely monitor human capital.
Almost all boards have regular executive sessions and nearly two-thirds
hold strategic retreats, but only about half require outside directors to visit
company operations.
Despite governance requirements that are more stringent, less than two-thirds
of boards have regular training for directors.

independence

Ninety percent (90%) say that their boards behave independently of
management to a great or very great extent. Nevertheless, 91% say their
boards work well with senior management.

Fifty-seven percent (57%) of directors say they are now more hesitant to serve
on other boards, with inside directors expressing even more hesitancy than
outside directors.

compensation

Nearly 40% of directors feel CEO pay is “too high in most cases,” a significant
increase from 25% in years 1998 through 2001. This is three times as many
who think CEO compensation is “generally in line with CEO performance,
competitive conditions, and good economics.” Outside directors are more likely
to feel this than are inside directors.
When asked, however, about the effectiveness of the compensation program for
their own company’s CEO, only 24% indicated some change was needed.

Based on the conclusions of the previously mentioned study, it would seem to me that Boards don't walk their talk.

Business leaders are willing to say that there needs to be (in business generally) MORE progress, more direction, more strategy, more monitoring, etc. EVEN THOUGH they are loath to say anything like that specifically about THEIR company.

Business leaders (board members) are frustrated with lack of CEO performance and overgenerous CEO pay, but are loath to complain about it in THEIR OWN company.

Business leaders acknowledge that there is supposed to be monitoring of the performance not only of the CEO, but of other high level management officers, but they admit that they don't really do that.

Nearly half of board members are willing to indicate that their roles are problematic and that they would have to think twice about doing it again, but that is not going to show up on their OVERALL (vague) assessment of board effectiveness.

Everything is going great, they say, except for all the shit that starts to show up when you actually start looking around. Is that kind of self-satisfied myopia the state of American business?