Article | Directorship | September 8, 2009

The New Governance Paradigm

by Nathaniel Foote and Michael Beer

Abstract

Boards members of failed banks in 2008 or of the many companies like Enron who were caught up in scandals are by and large honorable, well intentioned, and competent people. So what went wrong and what can be done about it. This article argues that the problem lies in boards' almost sole focus on business results and their fiduciary responsibilities. Boards and CEOs must create a common vision of the effective, values based, high commitment, high performance organization they intend to build together and institutionalize a process by which the CEO and board of directors can learn the truth about gaps between vision and reality. Without a commitment to a vision and an institutionalized learning and governance system, well intentioned boards will continue to be surprised ethical, human, and performance failures.

Keywords: Corporate Governance; Competency and Skills; Banks and Banking; Failure; Goals and Objectives; Leadership; Management Practices and Processes; Ethics; Performance; Governing and Advisory Boards; Crime and Corruption;

Citation:

Foote, Nathaniel, and Michael Beer. "The New Governance Paradigm." Directorship (September 8, 2009).