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Building Smaller, Better Boards Can Be A Challenge For Firms; Keys Are Size And Mix.(A)
Byline: NICK TURNER
Seemingly contrary trends are sweeping corporate America's boardrooms.
On one hand, boards are becoming smaller and more independent. As part of reform efforts, Walt Disney Co. and other firms seem poised to scale back their boards and give some insider directors the boot.
On the other hand, board members are expected to get more active in governing companies. In response to the Enron and WorldCom scandals, boards aim to root out fraud. But that means having a good understanding of how the business works -- something an outsider often lacks.
The question is: Can boards be small and independent while still getting more involved?
Yes, says Rick Steinberg, the global governance leader at PricewaterhouseCoopers. In fact, boards may need to shrink if they want to work better. And with the right training, independent board members can understand the inner workings of a company.
"Boards have been cut back in size in order to be more effective," Steinberg said.
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