Lifting the curtain on the boardroom

When Directors & Boards started publishing 40 years ago, little was known about what went on behind closed doors of the boardroom. Becoming a corporate director will often seen as the ideal way to cap a successful CEOs corporate career -- a lifetime achievement award, a victory lap. Yet the gradual evolution in board governance accelerated dramatically when the government began asserting itself after the crushing bankruptcies of Enron and Worldcom and later the global financial crisis. The first of the sweeping regulations, the Sarbanes-Oxley Act of 2002, mandated strict reforms to improve financial disclosures and prevent accounting fraud. More precisely, the Securities, and Exchange Commission adopted rules concerning shareholder recommendation of executive compensation in an advisory vote starting in 2011 for large companies. Part and parcel of the advisory vote was a new role for directors -- actively engaging with shareholders. It didn't happen immediately, but five years after Dodd-Frank it became routine for directors to talk to shareholders on a semi-regular basis.