Media Plays a Big Role in Board Governance
Here I am on vacation and had a moment to read an article (Boards Under the Influence) from INSEAD on the role of media on reputation and board governance. The researchers make some good points that I want to make sure I remember and share. Essentially the research underscores how media coverage has a broad agenda-setting effect which should not be overlooked or ignored. Board members notice positive and negative coverage about companies and institutions whether it is related to them or not and act in their own best interests. Of course. First, board members talk to other board members and word gets around about what best practices should be instituted so as to reduce their own risk. Board members are quite aware how any misbehavior or misconduct can quickly deflate revenue at the company on whose board they sit and how it can impact their own reputations. The article seems to make the point that when there was bad publicity surrounding board members sitting on too many boards or when boards were criticized for being too male, changes were soon made to rectify these problems. The media’s calling attention to some of these issues hastens the remedies that we are enjoying today in board governance. Another reason that I have picked up all these years is that board-shaming when companies err can be quite severe. The board member hall of shame can end careers and force members to exit at the end of their tenures. All makes good sense and am glad that this research was shared by INSEAD.