I. Introduction

In the coming year, boards of directors face a two-fold challenge: they must implement the various new legislative, regulatory and “best practice” mandates relating to corporate governance, while at the same time tailoring them to the needs of each corporation and implementing them in ways that will promote the board’s core mission of securing long-term value for shareholders. This challenge is complicated by the fact that many of the corporate governance provisions of the Dodd-Frank Act, new SEC regulations and other reforms require or put pressure on the board to adopt a one-size-fits-all approach to corporate governance. Thus, while the financial crisis and ensuing global recession have prompted boards to critically review their oversight role and consider ways in which they might function more effectively, their individualized action plans and “lessons learned” have to some extent been preempted by blunt regulatory mandates and best practices. Moreover, as boards work to craft strategies for sustainable economic recovery, they are increasingly vulnerable to shareholder activist demands for quick turnaround measures and short-term gains, particularly as hedge funds and other special interest shareholders seek to execute their own agendas for liquidity and financial recoupment.

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