Good corporate governance may return goodwill in aftermath of financial crisis

Leaders gathered recently at Yale University’s Governance Forum to discuss how good corporate governance could rebuild public trust in the embattled global financial system.  Novartis General Counsel Thomas Werlen sat on a panel that explored whether the public corporation model has been under challenge since the financial crisis. Because good governance is fundamental to the long-term success of the global financial system, the panel proposed that all boards should share a few key characteristics to be effective:

1. Trim down to move quickly and easily.
The panel agreed that smaller boards can resolve issues faster. Companies with large boards should establish board subcommittees for peak efficiency.

2. Look at the business from different angles.
A board should be diverse in terms of skill sets, not just cultural backgrounds. It is critical that members have a deep understanding of the business they serve and the conditions inside the company. Board members also should offer experience from working in various geographies or industries.

3. Mix insider insight with outsider observation.  
A board should include both independent members and top management who run the business day-to-day. This will not only help protect the company’s long-term goals, but also will encourage transparency and fresh thinking.

Learn more about the Novartis Board of Directors

 

Novartis: Diverse backgrounds to match diverse constituents

The Novartis Board of Directors exemplifies the panel’s criteria as a way to sustain long-term value for shareholders. With 12 members and four subcommittees, the Board is organized efficiently and includes representatives from a variety of professional backgrounds, cultures and ages. These diverse backgrounds help the Board think about the wide array of customers and patients Novartis serves. Ten out of the 12 Board members are independent and bring a fresh perspective to the table, while two internal members can report on the situation inside the company.

At Novartis, the Board’s culture is as important as its composition. Novartis culture fosters open discussion and timely information flow. This commitment to transparency helps maintain the trust of shareholders and employees alike.

Learn more about Diversity & Inclusion at Novartis