Chapter

The Board’s Role

Stephen M. Bainbridge

in Corporate Governance after the Financial Crisis

Published in print January 2012 | ISBN: 9780199772421
Published online May 2012 | e-ISBN: 9780199932696 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199772421.003.0003
The Board’s Role

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This chapter explores the changing role of the board. The literature has traditionally identified three functions performed by boards of public corporations. First, the board monitors and disciplines top management. Second, while boards rarely involve themselves in day-to-day operational decision making, most boards perform at least some managerial functions. Finally, the board provides the corporation access to a network of contacts that may be useful in gathering resources and/or obtaining business. The last decade, however, has seen a series of changes that collectively narrowed the board's role to that of monitoring. The chapter explains the origins in the 1970s of the reconceptualization of the board's role and structure, as the advising and managing board models were replaced by the monitoring board model. It then identifies the changes wrought in the last decade that carved the monitoring model into stone.

Keywords: corporate governance; board of directors; public corporations; monitoring board model

Chapter.  14329 words. 

Subjects: Company and Commercial Law

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