I have recently heard the term “management captured board.” I found it quite interesting.
What it apparently means is a board that does not get information from any other source than management. Could this actually happen? I would ask board members to consider if there are situations where they don’t have any other input besides that of management when they are making decisions. One would assume that this only happens when the decision to be made is entirely internal.
Would a “management captured board” be fulfilling their duty of care? My guess would be no. A board member must consider sources of information other than just management to be diligent in discharging their duties.
Board members have experience that they obtained outside of their role as directors and we are all bombarded with data from social media and our daily lives. I am hopeful that “management captured boards” would be a rare occurrence.
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