HBR has published a piece by Professor Guhan Subramanian, who is the first ever tenured professor at both Harvard Law School and the Harvard Business School, entitled Corporate Governance 2.0 in its March issue. Subramanian reminds us that corporate governance has only emerged starting in the 1970s and remains a "patchwork system of regulation" with a "lack of an accepted metric for determining what constitutes successful governance" characterised by "shrill voices". He also provides a litany of evidence about recent governance lapses and oddities and suggests we can "do better".
Some principles Subramanian lays out includes:
- Bring back a variation on the staggered board,
- An over-reliance by the market on ISS views/perspectives,
- Install exclusive forum provisions,
- Boards should ensure "best in class" actors, including director evaluations,
- Boards should manage the company for the long-term and end earnings guidance, and
- Consider shareholder proxy access and giving shareholders an orderly voice.
Check out this literature at https://hbr.org/2015/03/corporate-governance-2-0.
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