Providing intelligence for directors

Many corporate directors are first invited to join the board by a friend, typically a CEO. Sadly, they may have little understanding of their role in the corporation.

For example, few realize that the board is the corporation's governing body; it does not just serve as a group of advisors to the CEO. This responsibility includes helping develop and approve a strategic plan and monitoring management's progress. It also includes working on committees that evaluate auditing, director nominations, board effectiveness and governance, CEO performance, management compensation and regulatory compliance and corporate ethics. However, it does not include meddling in operations-or approving every management plan or action.

Board members have legal and financial responsibilities, too. To help directors and management better understand their functions and responsibilities, a group of experts in the field has formed a new venture to help directors. Called Director Intelligence, the effort is a joint undertaking of Georgeson Shareholder Communications, Inc., New York, and law firm Jones, Day, Reavis & Pogue, headquartered in Chicago. Based on the knowledge and resources of those firms, it will evaluate existing policies and implementation, advise boards and train directors and senior managers on the responsibilities of public companies.

Counselors include John Wilcox, vice chairman of Georgeson, and Richard Koppes of Jones, Day, two others from those firms, plus Philip Lochner, Jr., former SEC commissioner and retired senior vice president of Time Warner.-P.F.