What Are the Lessons of the Financial Crisis for Boards?

These are turbulent times on Wall Street and beyond, and it is difficult for many to understand how such history defining events could not have been prevented or avoided.

Unfortunately we may bear witness in the near future to even more history that will no doubt be studied in years to come by business students around the world. As we look to the future it brings up the age old questions: What are the lessons to be learned from the downfall of some of Wall Street’s oldest and largest companies, and can we prevent history from repeating itself…again?

Making sure that your board is equipped with the right mix of talent, varying expertise, and understanding of the complex intricacies of your industry are now essential elements to corporate success.

There will be, and to some extent already has been, much scrutiny put on the executive management and the board of directors of these companies. An obvious reflection is the necessity of having a strong diverse board.

Companies need directors who will be vocal advisors and strategic consultants, who will ask the difficult questions and play the devil’s advocate at times, and will provide guidance to management with long-term goals and visions in mind. All the while being cognizant of the current situation the company and overall marketplace finds itself operating within and the impact for achieving future goals.

Making sure that your board is equipped with the right mix of talent, varying expertise, and understanding of the complex intricacies of your industry are now essential elements to corporate success.

Companies and their boards are no doubt reminded by current events that their decisions impact not only their employees and shareholders, but - as we have witnessed - the economy and the global marketplace.

Thames Fulton is a principal in the Chicago office of Heidrick & Struggles, who focuses on board-of-director engagements.