Superior Governance
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A Necessity Today
Despite their reluctance to act, executives & directors have
a fiduciary duty to protect their companies and to exercise "reasonable
business judgment" to:
- Assure that the Company’s financial reports are accurate
and that its assets are protected
- Protect the Company from material risks that could impair
shareholder value
- Identify threats to the future success and value of the company
and take corrective action
- Select and evaluate the CEO and his/her team
The standards for a “reasonable decision” are clearly
rising in the wake of the governance failures and excesses of
the past few years. In addition, officer and director exposures
may never have been higher than they are today.
Given the history of the last couple of years, directors and
executives can no longer afford to assume that current methods
and processes can adequately protect them or their shareholder.
The cost of failure is far too high, especially in relation to
the costs associated with improving governance. In fact, a comprehensive
good governance plan may be the cheapest, most effective risk
management technique a company can deploy today.
The reality is that, however tempting avoidance may be, executives
and directors cannot afford to wait and see if anything in their
company will go wrong. |
