Preparing for conflict in the boardroom: Thoughts and strategies for general counsel
With increasing transparency demanded of public companies combined with growing investor activism, corporate board meetings are becoming more visible and more contentiousin a polite sort of way.
November 21, 2013 at 07:00 PM
7 minute read
There is a common perception that corporate board meetings are rather staged and, frankly, boring. After all, boards approach decision making through a deliberative, consensus-building process. Certain issues are deliberated and voted on; other issues request director observations to guide management.
But external factors are forcing change. With increasing transparency demanded of public companies combined with growing investor activism, corporate board meetings are becoming more visible and more contentious—in a polite sort of way. Conflicts in boardrooms should not be surprising, given the that most of the easy questions in the life of a corporation are answered at management levels far below that of the CEO, the CFO, the general counsel and the company's board of directors.
The more difficult and material issues that senior management and directors tackle in board meetings include such things as long-term strategy, competition, business expansion, risk appetite, succession, executive compensation, regulation and management talent. With such key business and directional issues at stake, there will be differences of opinion and direction amongst the board and members of management. And where there is a possibility that those conflicts, if not resolved, could become public, there is a greater amount of time and effort needed to understand and address differences of opinion.
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