June 15, 2010
Boards Should Serve as Partner to Management, Panel Says Fichera, Rosenblum Discuss Corporate Board Independence
By William McQuillen and Greg Miles
June 15 (Bloomberg) — Corporate boards should serve as partners to management and be held accountable by shareholders, according to panelists discussing the role of boards in relation to chief executive officers.
Board members should be vigilant not to defer to the company’s officers and should be willing to do their own due diligence. Corporate malfeasance and an economic recession have led to criticism of the board members, said Joseph Fichera, chief executive officer of New York-based financial advisory firm Saber Partners LLC. “There is anger that the board has not fulfilled their responsibilities,” Fichera said at the Bloomberg Link Boards & Risk Conference in Washington.
The board should act as a team with management to forge business strategy, not just provide oversight, said Steven Rosenblum, a partner with Wachtell, Lipton, Rosen & Katz. Boards should consider adding more members from management to build expertise, although they should be careful to maintain a “supermajority of independent directors,” he said. Rather than relying on management, board members should be willing to work harder to ensure investors’ best interests are represented.
“It is a job, and they should be compensated and held accountable by shareholders,” Fichera said.
–Editors: Fred Strasser