Yesterday I opined once more that we need a major restructuring in corporate governance, possibly by moving to a partnership-type format. I used HP as an example.
Professor Bainbridge also cites the HP example, but as a sign of hope that directors are asserting power over the executive.
This seems like a glass half empty/full problem. I’m focusing on the managerial decision that led to the board intervention. Boards have, and I think will continue to, intervene when things get really bad. I don't see the HP intervention as a sign of a new trend.
Boards can’t manage, and the current structure will continue to give that basic management power to the executive. This inheres in the separation of management and control that characterizes publicly held firms.
I think the only true long-term solution is not to expect monitors to manage, but to reduce the assets under managers' control.
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