Corporate Boards and the Ethical Need for Information

The piece below (quoting BEH co-editor Chris MacDonald) is about the urgent practical problem that corporate directors (members of the Board of Directors) have in staying sufficiently informed to do their jobs well. But note: this is an ethical problem, too. If your job is to direct the company, but you’re having trouble getting the right information, then it seems you have an ethical obligation to put processes in place that will help you do better.

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LINK: How to be an informed and prepared director (by Prasanthi Vasanthakumar for Institute of Corporate Directors)

…directors are often frustrated by the fact that they famously have trouble accessing high-quality information.

“Directors often report that they’re not getting straight information from corporate insiders, because nobody wants to report bad news to the board,” says Dr. MacDonald. “When directors resort to outside consultants, they do it as a kind of due diligence. However, they sometimes don’t have a great deal of faith in the quality of information they receive.”

Essentially, directors are stuck in an information gap – many feel they aren’t receiving the whole picture from management, but don’t trust outside information either…..

What do you think?


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