Held to a Higher Standard

Never before has the role of the director been as important, challenging, or risky as it is today. The increasing entwinement of government and business has led to a greater need for transparency in corporations and their leadership. As a result, public directors must make prudent and legal decisions for their companies, yet always keep public perception in mind. Nothing exemplifies this better than the recent CEO compensation hearings held by the US Government’s Committee on Oversight and Government Reform.

The specter of CEOs and directors testifying before Congress about compensation and severance packages serves as a grave reminder of the enormity of a director’s role in governing his or her corporation. Directors are being held accountable in entirely new ways from a legal perspective while also being forced to manage public opinion.

Organizations once thought too large or too connected to fail are on the brink of disaster – i.e. Bear Stearns. What does all of this mean for directors today? It’s a tough market and the level of responsibility has increased dramatically. Directors must be sharp, savvy, aware, and most of all, possessed of a degree of integrity that keeps them out of legal trouble and out of the view of the public eye.