Elan Corporation, plc
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Corporate Boards of Directors:; A StudyI am persuaded by the Holmstrom-Kaplan views that tails (corporate scandals) should not wag dogs. Judged comparatively, corporate governance in most large U.S. corporations is serviceable most of the time. That said, there is no denying that the corporate board in practice does not really qualify to be described as the keeper of the essential variables (V) in the double-feedback setup in Figure 2. Instead, the board in practice is approximated by the composite Mace-Jensen description of the board, in that (1) the CEO is in de facto control of the operation and composition of the board, (2) outside members of the board are at enormous information and expertise disadvantages to the management, (3) most boards most of the time are responding with nodding approval, (4) boards can and often do move into a more active mode when the corporation experiences adversity, and (5) albeit unmentioned, the very existence of the board affords an opportunity for shareholders to “vote the rascals out.” http://docs.google.com/viewer?a=v&q=cache:Y6GwWJsXZyMJ:businessinnovation.berkeley.edu/WilliamsonSeminar/OEW011807.pdf+corporate+boards+are+ineffective&hl=en&gl=us&pid=bl&srcid=ADGEESjaLA-jUjGjYmiTi6TP8IaxQ5qCMoZPCQFIdvDtfD8oGEB_wTf599IHW6Ol0HLPMTaIDCenAd70zm-U5hHSfHcwfrVxfmey4kbEGOw1062SHMlZTeys0JspT8P3OMyWUWRAKGL-&sig=AHIEtbQzG0lZzlFjBqzDiCFAyPIJjw6W5g
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