Question: Corporations have centralized management At the apex of the management

Corporations have centralized management. At the apex of the management pyramid is the board of directors. Immediately below is the CEO. In the next layer are the vice presidents and other top officers and executives. This classic management pyramid further expands through layers of middle management, finally coming to the base comprised of rank-and-file employees.
What should the board’s role be? Consider the following two opinions:
Boards are supposed to monitor risks, provide judgment and supervise managers on behalf of shareholders.
Most boards meet one or two days a month and are composed of individuals who also hold demanding full-time jobs. Given those circumstances, it’s absurd to believe that board members, even the most experienced and best-intentioned of them, will uncover systemic flaws or acts of malfeasance. . . . That’s what regulators, outside accountants, and internal controls are for—to help boards ferret out excessive risk and wrongdoing.

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  • CreatedOctober 02, 2015
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