Counting What Counts: Turning Corporate Accountability to Competitive Advantage

Counting What Counts: Turning Corporate Accountability to Competitive Advantage

Counting What Counts: Turning Corporate Accountability to Competitive Advantage

Counting What Counts: Turning Corporate Accountability to Competitive Advantage

Synopsis

Drawing from the collective experience of twenty-five years of research, writing, and teaching in the field, Epstein and Birchard present a new approach to managing corporate accountability, as a function of four essential and interlocking drivers: governance, performance measurement, control systems, and reporting. They identify where and how companies fail in meeting requirements of these four cornerstones, and then build a powerful framework for managers at all levels to improve decision making, clarify and communicate strategy, accelerate feedback and learning, and secure stakeholder loyalty.

Excerpt

The drama of the accountability crisis has not yet reached a climax at many companies, but, like most dramas, it has already put one set of people under the bright lights. These are the people that most outsiders view as the power brokers responsible for the problem, the chief executive and the board of directors.

The notion has emerged that a corporation without an active, independent organ of supervision cannot be fully accountable. That is why companies have begun actively experimenting with the first element of corporate accountability, governance. (See Figure 3-1.) They are concluding that the board must comprise a set of directors who are completely independent, who ensure the accountability of the chief executive. Those directors must run the board with strict, new governance practices, which ensure their accountability to outside constituencies.

At a special meeting of shareholders on July 2, 1997, Dennis Kozlowski, chief executive of Tyco International, showed just how much good board governance counts in improving decision making and strategic execution. Kozlowski knew his audience wouldn't be entirely happy on that day. Many shareholders thought that, in the interest of empire building, he was asking them to vote for a deal from tax hell, namely a proposal to acquire . . .

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