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Pawns or Potentates: The Reality of America's Corporate Boards
Pawns or Potentates The Reality of America's Corporate Boards Author:Jay W. Lorsch, Elizabeth MacIver, Harvard Business School Press Boardroom-the word alone conjures up visions of wealth, privilege, and power in the minds of most Americans. But barring a crisis situation such as a leveraged buyout, an unfriendly takeover, or the death of a CEO, the outside directors of publicly held companies have precious little time, knowledge, or power to govern. When the company's stress... more »es are less visible-a gradual decline in earnings or growing doubts about the CEO's performance-directors find it nearly impossible to consolidate their authority sufficiently to manage the situation. Pawns or Potentates is the most comprehensive study of American corporate governance ever undertaken. Over a three-year period, Jay Lorsch and Elizabeth MacIver interviewed nearly 100 outside directors of corporations and received questionnaires from over 2,000. The result is a fascinating look at how boards operate. In their own words, directors describe how they see their roles, who they think their constituents are, and what prevents them from successfully fulfilling their obligations. The authors focus on four case studies of companies under stress to reveal the dimensions of corporate governance in general and the tension between outside directors and CEOs in particular. Each case provides valuable insight into a board's ability to govern effectively when it must act without, or in opposition to, its own management.« less