Difficult at the best of times, the role of non-employee directors of publicly-held corporations – to guide and oversee management in enhancing long-term value – has become even more challenging in today’s uncertain economic environment. Prominent examples in recent years of poor performance, failure to comply with legal obligations, and other corporate misconduct arguably point to inadequate oversight by directors – or perhaps the impossibility, notwithstanding active monitoring by boards, of ensuring consistent corporate compliance, appropriate risk management, and good behavior.  

It is broadly agreed that the effectiveness of a board of directors requires independence, diversity of expertise and backgrounds, sound organization, energy and focus. However, examination of the monitoring role raises many questions which underscore the complexities and challenges facing the directors of the modern corporation. In addition, boards of directors have come under increasing pressures from politicians, regulators, international institutions, traditional and social media, special interest groups (including organized labor, environmentalists, and human rights advocates), consumers, employees, creditors, and shareholders. Even where such demands initially seem irrelevant to the core profit-making purpose of the corporate enterprise, they can often raise legitimate concerns for directors to consider. Facilitated by social media and instantaneous communication, the objectives of one interest group can quickly grow into a mass movement affecting consumer behavior, influencing the views of important shareholders, and even leading to mandatory regulation of corporate activity.

The Salzburg Global Forum on Corporate Governance was launched in 2015 to facilitate critical thinking about changing regulatory and economic environments, comparative practices, and the roles and duties of directors. While participants agreed that enhancing corporate profit and shareholder gain remain the foremost purpose of corporations worldwide, they prioritized the need to develop practical techniques to improve board effectiveness in monitoring or guiding corporate behavior. They stressed that growing pressures for corporations to behave as good citizens may not always be easy to reconcile with fundamental economic objectives, and may anyway differ significantly over time, across jurisdictions, and in the eyes of various constituencies. Therefore, the 2016 session concentrated on ways to help directors improve governance practices for the long-term enhancement of the wealth of the corporation and its shareholders, while also promoting leadership in exploring the role of the corporation as a good citizen. 

The Salzburg Global Forum on Corporate Governance provided a neutral setting for cross-cutting conversation across national boundaries on practical standards, expectations, and opportunities. The inter-generational group of participants came together as equals, representing a range of expertise and cultural experiences. The Forum enabled candid in-depth exchanges among participants to advance understanding of corporate best practices and devise concrete recommendations. Reading materials, accompanied by key questions, were distributed to participants in advance. The highly-interactive program took place in plenary and breakout sessions. Small group discussion allowed for intense exploration of specific aspects of the general themes, with reports back to the plenary to refine conclusions.