A word about what Boards do and what the CEO does from one who has had a go at that game:
The Board is there to protect the interests of the shareholders - ALL the shareholders, that is its duty.
It does this by doing Two things; enforcing standards of corporate governance and appointing and monitoring the performance of the CEO.
Corporate governance is about how the company is managed - who in management gets to make decisions and how they make and implement them so as to safeguard the assets of the shareholders. This is reasonably straight forward and is receiving a lot of attention in Australia these days.
What people often don't understand is that the Board does not make the decisions about how the company is run. They hire a CEO to do that. The CEO develops the strategy and presents it to the Board. The Board either likes it, or fires the CEO and finds a new one, the Board does not participate in the running of the company.
At a Board meeting, apart for the usual crap about minutes and statutory stuff, the real action begins when the Chairman asks the CEO (who is "in attendance" if not a Director) to take the Board through her report. That report details progress against the approved strategy, significant new events and major decisions the CEO has taken.
The CEO does not ask the Board to take his decisions for him, the Board simply looks at the decisions he has taken, perhaps questions him about how he has arrived at certain decisions taken or forthcoming, mulls his report amongst themselves and either accepts it or rejects it. If his report is rejected he finds himself fired or he resigns. That is why CEOs get paid so much; you are working at the pleasure of the Board. You can be removed any time for any reason, even such thing as a big shareholder deciding that they don't like you personally.
To put that another way, the CEO doesn't ever get to claim "unfair dismissal" (maybe claim non adherence to contract terms though).
Anyway, don't attack the Board about the way the company is run, attack it if you like about destruction of shareholder value or assail it about Corporate Governance because that is their proper concern.
Of course the Board, or most members of it, must approve of the Direction the CEO is taking the company, or they wouldn't have hired him and approved the strategy. The question for the Board is that if they believe that the corporate strategy needs to change, is the present CEO capable of making that change or is a new CEO required?
The deeper question for individual Board members is whether they are happy to remain on a Board if they don't like what is occurring and can't change it? The personal and legal consequences of failing to protect shareholder assets are extreme.
My own opinion of the Qantas Board is better left unsaid.
Last edited by Sunfish; 21st Aug 2011 at 15:30.