People often question whether corporate boards matter because their day-today impact is difficult to observe. But, when things go wrong, they can become the center of attention. Certainly this was true of the Enron, Worldcom, and Parmalat scandals. The directors of Enron and Worldcom, in particular, were held liable for the fraud that occurred: Enron directors had to pay $168 million to investor plaintiffs, of which $13 million was out of pocket (not covered by insurance); and Worldcom directors had to pay $36 million, of which $18 million was out of pocket. As a consequence of these scandals and ongoing concerns about corporate governance, boards have been at the center of the policy …show more content…
1. Transparency in decision-making;
2. Accountability which follows from transparency because responsibilities could be fixed easily for actions taken or not taken, and;
3. The accountability is for the safeguarding the interests of the stakeholders and the investors in the organization.
Decisions relating to board composition and structure will be of fundamental