Governance Essay Example | Topics and Well Written Essays - 750 words

Governance - Essay Example The right role requires board member engagement. The traditional model has a passive board that requires minimal participation from the board whose main job was to approve management decision. The CEO has the discretion and the board has limited accountability. The certifying board model focuses on credibility to shareholders ensuring that the business is managed properly and CEO meets requirements. The engaged board is likened to a CEO’s partner that constantly provides insight, advice, and support on key decisions and actively defines role and boundaries. The intervening board asserts its presence and deeply involved in key decisions through intense meetings. The operating board decides what the management implements and usually characterized by start-ups where executives still need more management experience. The right work requires the boards to potentially participate in dozens of distinct areas although focus may be on legal areas such as counseling senior management, ev aluating CEO, and ensuring effective audit, among others. Ideally, the working board must also be able to provide support to directors who need help, whom to retain for the next term as well as those to release. Committees may also help them stay in focus and concentrate on specific issues. The right people in the board require competence as a group and as individuals, but in reality, capabilities mismatch expectations. The right agenda requires the need for the board to discuss then thoroughly through annual off-site meetings beyond the regular ones where they mingle with the management and employees to gain insight as well as get fruitful results. Right information should not be too much or too little but enough to provide exact and necessary information that they need to know and discuss. The right culture engages the board with candor and willingness to challenge as it reflects the social and work dynamics of a performing team (Nadler, 2004). The Principles of Good Governance an d The Seven Practices Lawrence and Weber (year) prescribed five principles of good governance for the board through selection of outside directors to fill majority of positions, conduct open elections for members of the board, appoint independent lead director or chairman of the board and hold regular meetings without the CEO present, align director compensation with corporate performance, and evaluate the board's own performance on a regular basis. The overlap between the lists of Nadler and Lawrence and Weber is that Lawrence and Weber’s list is encompassed on Nadler’s right mind-set. Nadler’s is more encompassing, extensive, and specific while Lawrence and Weber’s were traditional at most. Executive Pay and the Principles of Board Practices Through the right people method, Nadler’s practices may eliminate those which are performing questionably, thus maintaining performers that may be threatened with competition. In addition, transparency and eq uity is also promoted in order to determine that it is not only senior management or executives that monopolize compensation but must be distributed equally to all members of the organization as one component should be determined as important as the others. This will help distribute compensation from the executives down to the rank and file (Martinelli, 2011). Board Performance and Application to Disney One of the bigger problems of the Walt