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Helping Independent Directors Be Constructively Proactive

Harvey L. Pitt | December 21, 2004

This is the second in an occasional series of “how to” columns on directing, which considers how independent directors can be proactive, but in a constructive way. The guidance is intended to assist directors in striking the correct balance between two unacceptable extremes—being unduly compliant toward management, or unduly adversarial. Being independent doesn’t mean you have to be a gadfly, but it doesn’t mean you have to be a rubberstamp either.

The challenge facing independent directors is to avoid becoming a proverbial “fifth wheel,” an unnecessary appendage in the corporate oversight process. If, as a general rule of thumb, you could be entirely absent from the boardroom and it wouldn’t make a difference, then you’re not being constructively proactive, and you’re not earning your keep.

There’s an inherent tension in calling for directors to be constructively proactive, because...

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