What's Good For Gm's Board Is Good For...

The landmark changes in board practice announced by General Motors serve to recognize formally what corporate governance advocates have long contended: Better boards are good for business. ("At GM, a Magna Carta for directors," Top of the News, Apr. 4) The unfortunate part of this important development is that it so often takes something approaching a catastrophe before slumbering boards awaken to their rightful responsibilities and adopt policies that have been proven to be both reasonable and effective.

What is needed, it seems, is a general code of governance practices that would serve as a guide for all major companies as they approach the 21st century. Such a code is in place at the London Stock Exchange as a result of the Cadbury Committee's recommendations. While the code is voluntary, listed firms are required to indicate if they decline to conform to it--so the pressure to embrace the guidelines is considerable. It is an idea worth consideration by other key exchanges, starting with the New York Stock Exchange.

J. Richard Finlay, Chairman

Corporate Governance Roundtable