Mitigating Board Information Risk

The widening information gaps between the C-suite and board—also known as information asymmetry—can pose a significant risk to boardroom operations or possibly lead to a significant corporate crisis. As such, NACD has made the mitigation of this risk a focus.

McGladrey and NACD convened meetings between corporate directors and C-suite officers to candidly discuss the topic of board/C-suite relations, and the resulting conversation spotlighted the areas that are increasingly susceptible to wider gaps in information: strategy and risk, executive compensation, CEO succession planning, and board evaluations. These discussions—summarized in the following white paper—honed in on the warning signs that gaps in information flow have become too large—and specific preventative measures the board can take to address the issue.