First, the key to board effectiveness was independence. The US view is that all the directors, apart from the chief executive officer, should be independent. In the UK, a third of the board are usually non-executive directors and the entire remuneration committee is independent of the management. More recently, the view in the US, and increasingly in the UK, is that directors' interests should be aligned with those of shareholders. In the US, more independent directors are receiving their pay in stock rather than cash.
Independent directors are busy enough dealing with the companies that pay their regular salaries.
We should not expect too much of board reform, either in producing honest companies or competitive ones. There are other mechanisms which are as important, such as laws to protect corporate whistle-blowers and to promote freedom of information for investors, employees and journalists. Companies, and governments, might not always be comfortable with the results, but Mr Vasiliev can tell them about the alternatives. Please read Terms of Use .