Matteo Tonello Associate Director, Corporate Governance Research Conference Board

The Conference Board Governance Center issued today the second in its new series of reports on the oversight role of the board of directors in the current economic crisis.

The report identifies "pressure points" for pragmatic boardroom discussions on how to reassess corporate strategy and improve directors' performance in areas such as oversight of counterparty risk and liquidity needs.

"A board of directors should not miss the opportunity to fully re-evaluate the company's business plan for the coming 12 months," says Mark S. Bergman, co-head of the capital markets and securities group at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and author of the report for The Conference Board. "In particular, it should assess the impact on corporate objectives of projected cash flow, the limited availability of bank debt, the potential restrictions on the company's ability to raise equity or debt through the capital markets, and the fixed component of the company's cost structure."

The report argues that, particularly in the current environment, corporate boards need to understand their companies' risk exposure and, to do so effectively, they need to feel comfortable in asking the right questions. As part of their oversight functions, directors should be willing to reach out directly to those responsible for risk management.

"In these difficult times, The Conference Board is renewing its commitment to provide guidance to the boards of directors of its member companies," says Matteo Tonello, associate director, Corporate Governance at The Conference Board, and director of the report series. "Along with their monitoring responsibilities, directors fulfill a crucial role in adjusting corporate objectives to the economic reality and ensuring the company is suited to meets its potential. The economic environment is evolving rapidly. This may represent a threat to many, but it may also offer important opportunities to those enterprises that can promptly adapt to new business circumstances."

For over 90 years, The Conference Board has created and disseminated knowledge about management and the marketplace to help businesses strengthen their performance and better serve society. The Conference Board operates as a global independent membership organization working in the public interest. It publishes information and analysis, makes economics-based forecasts and assesses trends, and facilitates learning by creating dynamic communities of interest that bring together senior executives from around the world. The Conference Board is a not-for-profit organization and holds 501(c)(3) tax-exempt status in the United States.