Boardroom INSIDERsm

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June 2005 NEWS..... from Boardroom INSIDER  HOW SOME CORPORATE BOARDS DESTROY SHAREHOLDER VALUE With the strong recent regulatory and investor focus on corporate boards, we can forget that boards don't just build shareholder value. Too often, says the June issue of online newsletter Boardroom INSIDER, corporate boards actually destroy shareholder value. In the June BI's lead article, publisher Ralph Ward points out that, as we give corporate boards more power, it actually becomes easier for them to destroy shareholder value "though sloth, ineptitude, hubris or cowardice." Specific examples: The director who feels the need to sweep into the boardroom every few months to yank management's chain, lecture the CEO on the need to crack down, and second-guess management's every move. These chain-yankers then "leave to ignore the company until the next meeting," says Ward. At the other extreme is the director who "avoids unpleasantness." When a financial doesn't look quite right, or an auditor or company counsel says not to fret over trifles "the meeting is running late, so the director just says nothing." When the company later faces a financial restatement of investigation, "such politeness costs shareholders a bundle." The freelance director. When a director finds that management or other board members just don't agree with him or her on an issue, some will "start making calls on their own to shareholders or even the media" notes Ward. Such freelance whistleblowing almost always backfires, though, sending mixed messages and harming the company's image. Also in the June issue of Boardroom INSIDER: The 6 most difficult questions on board evaluation. Directors look out for #1 on liability protection. Genzyme's smart board IR reports. Q&A: Is my D&O coverage enough to avoid "personal" damages?