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Outside Directors with a Stake: The Linchpin in Improving Governance

Outside Directors with a Stake: The Linchpin in Improving Governance Outside Directors with a Stake: THE LINCHPIN IN IMPROVING GOVERNANCE Donald C. Hambrick Eric M. Jackson California Management Review Reprint Series ©2000 by The Regents of the University of California CMR, Volume 42, Number 4, Summer 2000 Outside Directors with a Stake: THE LINCHPIN IN IMPROVING GOVERNANCE Donald C. Hambrick Eric M. Jackson orporate boards of directors occupy a muddled place in the psyche of American business. Consisting of individuals drawn from the elite of the worlds of commerce, finance, public affairs, and education, C boards hold ultimate responsibility for the resources and conduct of public companies. They draw upon their experience and perspective to advise management. They must be vigilant and assertive in monitoring management without overstepping into the direct administration of the firm. The fact that American business has prospered so immensely in the last ten years is perhaps indirect evidence that boards are doing their jobs well. And yet skepticism abounds. Aren’t directors—even in an era of nomi- nating committees—often handpicked and otherwise co-opted by the CEO? Moreover, how can such busy people possibly devote enough time and attention to really understand the company’s environment and prospects? Aren’t they at the mercy of the distilled information http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png California Management Review SAGE

Outside Directors with a Stake: The Linchpin in Improving Governance

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References (25)

Publisher
SAGE
Copyright
© 2000 The Regents of the University of California
ISSN
0008-1256
eISSN
2162-8564
DOI
10.2307/41166056
Publisher site
See Article on Publisher Site

Abstract

Outside Directors with a Stake: THE LINCHPIN IN IMPROVING GOVERNANCE Donald C. Hambrick Eric M. Jackson California Management Review Reprint Series ©2000 by The Regents of the University of California CMR, Volume 42, Number 4, Summer 2000 Outside Directors with a Stake: THE LINCHPIN IN IMPROVING GOVERNANCE Donald C. Hambrick Eric M. Jackson orporate boards of directors occupy a muddled place in the psyche of American business. Consisting of individuals drawn from the elite of the worlds of commerce, finance, public affairs, and education, C boards hold ultimate responsibility for the resources and conduct of public companies. They draw upon their experience and perspective to advise management. They must be vigilant and assertive in monitoring management without overstepping into the direct administration of the firm. The fact that American business has prospered so immensely in the last ten years is perhaps indirect evidence that boards are doing their jobs well. And yet skepticism abounds. Aren’t directors—even in an era of nomi- nating committees—often handpicked and otherwise co-opted by the CEO? Moreover, how can such busy people possibly devote enough time and attention to really understand the company’s environment and prospects? Aren’t they at the mercy of the distilled information

Journal

California Management ReviewSAGE

Published: Jul 1, 2000

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