Study: Firms Pursue Improved Accountability

ByDeborah Austin Boards of major companies are working actively to improve governance and accountability, suggests the "Korn/Ferry International 28th Annual Board of Directors Study" recently released by recruitment solutions firm Korn/Ferry International, New York. Of respondents this year, 75% have written corporate governance guidelines -- up from 69% last year and 65% in 1999. Sixty-five percent have a formal committee overseeing board operations, up from 60% last year and 56% in 1999. Five years ago 57% of respondents said their CEO chose committee chairs and members; this year that is down to 37%. Now, such responsibility often falls to a corporate governance committee (33%) or the full board (27%). Two-thirds of respondents say their boards have a formal process for evaluating the CEO. Even more change could be coming: Seventy-one percent of respondents believe directors should receive individual performance evaluations regularly, but only 19% now conduct them. Eighty-two percent believe such reviews are effective -- up from 49% two years ago. Study data are based on responses of 884 directors of major organizations and analysis of fiscal year 2000 proxy statements.