I’ve been reading a lot about corporate governance. At first, I thought that the theory surrounding corporate governance was mostly lacking. As an example, if I walk into Chapters or the public library, I can find rows and rows of books on Business Management, but very little about corporate governance. However, I ordered some books into the library, and I found about a dozen useful volumes.
Business management has some distinct theories such as Total Quality Managment, Six Sigma and others. Corporate governance has only one named theory that I’ve come across so far: Policy Governance. Before that theory, however, many books were written in the mid-1990s, soon after the wave of leveraged buyouts. I wonder if the timing is more than coincidental?
I’ve read through a couple of the books. So far, the knowledge appears to be anecdotal and the purpose of the books seems to be to advise directors and trustees on how to improve their chances for success in working on a board. So far, there are few hard-and-fast rules and no comprehensive system theory (apart from the one mentioned above). Some of the suggestions include: keeping the CEO and chairman roles separate, including directors who are management (minority) and independent (majority, including chair), limiting terms of service and actively recruiting new members. An effective board should understand the business and the environment it operates in and should meet 6 – 12 times per year to support and assist the CEO.
On a personal note, I have been accepted to the Master of Education program at the University of Calgary (course-based, online delivery), so I have less time to devote to this blog until August.