Corporate America is learning from Nonprofits

It looks like for-profit Board Governance has finally caught up with the Nonprofit Sector. In a full page New York Times ad this summer Warren Buffet and other corporate leaders urge adoption of a set of “Commonsense Corporate Governance Principles” to assure that America’s corporations are “managed effectively for long-term prosperity.

Their principles have long been common wisdom in the nonprofit sector.

“No board should be beholden to the CEO or management. Every board should meet regularly without the CEO present, and every board should have active engagement with executives below the CEO level.”

“Diverse boards make better decisions, so every board should have members with complementary and diverse skills, backgrounds and experience. It’s also important to balance wisdom and judgment that accompany experience and tenure with the need for fresh thinking and perspectives of new board members.”

“Every board needs a strong leader who is independent of management.”

“Effective governance requires constructive engagement between a company and its shareholders.”

Enough said. It’s our challenge, as well as theirs, to fully implement these principles.