Contrary To Popular Belief – Corporate Directors Don’t See Stopping Wayward CEOs As Their Job
BUSINESS
Steven Boivie, Texas A&M University
In December 2001, Enron Corp. collapsed into bankruptcy – at the time the biggest U.S. publicly traded company to ever do so – following years of fraudulent accounting. Two decades later, Theranos CEO Elizabeth Holmes faces criminal charges that she defrauded investors as she built her blood-testing startup.
In both cases, the companies’ respective boards of directors have been blamed for allowing misdeeds to happen – or not doing more to prevent them.
That’s because boards are broadly seen by regulators, governance experts, lawmakers, newspaper reporters and the public as the main body meant to hold senior executives accountable. Legally, their role as overseers is baked into the Sarbanes-Oxley Act, which is the most recent major legisl...
