- Courtesy of the Library of Congress, Photographs in the Carol M. Highsmith Archive
Years of contention over how corporations should be governed have yielded many concrete results. Directors are now often expected to spend upwards of 250 hours per year in overseeing a major company, six to eight times what was expected from them in earlier decades. Boards are more independent than ever, not only due to increased regulations, but also because companies recognize this as a minimum expectation.
Shareholders have more of a voice in the policies and administration of companies, thanks in large part to the rising influence of institutional investors and other shareholder activists. They receive more information than ever about management decision-making and the qualifications of directors, and have more opportunities to make their voices heard in corporate affairs.
For decades, interest in corporate governance spiked only after headline-making events motivated the public and politicians to take up what was more routinely dismissed as an esoteric topic. In recent years, public institutions such as the Public Company Accounting Oversight Board and private initiatives like the Center for Audit Quality have helped move the concept of corporate governance into the mainstream.
If the course of reform has been anything but steady and incremental, neither has it been driven largely by the imperatives of the market or the internal logic of the corporation. Instead, contention over power and responsibility in corporate governance has mirrored more essential contests in the American polity between freedom and democracy and order and authority. Along the way, all but the most ardent on either side recognized that there could be no magic formula, only compromise consonant with the cultural norms and societal expectations of the times.
Now it appears that the old passions are cooling and even partisans may be leaving their trenches. As CII Executive Director Ann Yerger recently noted, “companies are much more agreeable to talking with their investors and listening.”51 There should be plenty of talking and listening to come, for maintaining the delicate balance between power and responsibility, in the boardroom as in the nation at large, is surely a never-ending process.
