Corporate Governance Explained by Dr. Sandra Richtermeyer, Chair of the Department of Accountancy & Business Law
The following is a transcript of the chat session held by Dr. Sandra Richtermeyer, Chair of the Department of Accountancy & Business Law, and Jennifer Bush, Assistant Dean for MBA Programs, on Tuesday, February 7th as part of a virtual MBA fair in which the Xavier MBA participated.
Dr. Richtermeyer: Hello. Allow me to introduce myself. I am Dr. Sandra Richtermeyer, Chair of the Department of Accountancy at Xavier University.
Jennifer Bush: Welcome, Dr. Richtermeyer. Thank you for participating in our chat session.
Dr. Richtermeyer: I teach a variety of courses in accounting and I also teach one of our capstone courses, Corporate Governance.
Dr. Richtermeyer: I believe that Corporate Governance is one of the most important concepts that an MBA can learn about. All too often we focus on what the CEO or C-level executives do - while those are key roles, the role of the board of directors and how they govern is also essential.
Dr. Richtermeyer: Our corporate governance class at Xavier places an emphasis in "tone at the top" and that top implies the board of directors. In addition, we focus very heavily on how the board compensates, evaluates and hires their CEO.
Dr. Richtermeyer: By offering a corporate governance class focusing on key trends in governance and issues that boards face, we believe that we give our students a competitive advantage as they move down their own leadership paths.
Dr. Richtermeyer: All too often MBA education "forgets" the board side of the equation. Even the popular press seems often to forget this as they report on CEO issues, but not as much on board of director decisions and actions.
Jennifer Bush: What do the students tell you the greatest take away from this class is?
Jennifer Bush: Or should I say this experience is?
Jennifer Bush: Because that is what it truly is, an experience, a shift in perspective.
Dr. Richtermeyer: Our students indicate that they feel ready for board service. Many of them even begin their first board experience during the class. Most often, this is for a nonprofit board as that is a good place to start.
Dr. Richtermeyer: They also feel prepared to serve a board, do presentations for a board and very important - they know how to assess an organization based on an analysis of the board on dozens of dimensions.
Dr. Richtermeyer: Many of our governance students will start with an organization that they have a passion for. For example, a volunteer, health and welfare organization. Or they may help by serving as an advisory member of a board.
Jennifer Bush: Yes, that is a great way to start. That passion helps their commitment.
Dr. Richtermeyer: Another exciting trend is that some of our MBAs help their entrepreneur friends start an advisory board for their entrepreneurial endeavors.
Dr. Richtermeyer: We recently offered a course on international corporate governance that compared governance trends in all key regions of the world.
Dr. Richtermeyer: In that class, students learned how organizations are led in diverse cultures, they learned about governance ratings and metrics on a worldwide basis, all the while preparing themselves for a variety of issues that they may see working with global organizations.
Jennifer Bush: That is so important since global business is the standard today and in the future.
Dr. Richtermeyer: Yes, even small organizations are looking at global opportunities. Understanding the dimensions of organizational structure and performance is key for organizations of all sizes.
Jennifer Bush: It is amazing how rapidly the issue of governance has gone global. Or has it always been so?
Dr. Richtermeyer: I think that organizations are increasingly seeing that for an organization to obtain or maintain a competitive advantage and sustainable growth, the board needs to be healthy and functioning properly.
Dr. Richtermeyer: Boards have to have several things on their radar screens - they oversee organizational strategy and they need to be able to understand all key areas of an organization.
Dr. Richtermeyer: In our governance class, we look at how boards oversee an organization's mission, vision, values, strategy, and performance.
Jennifer Bush: What has been the most grievous feature of an ineffective board?
Jennifer Bush: What do boards have to look out for?
Dr. Richtermeyer: I would say failure to pay attention to many signals that spell trouble for an organization, and often times that is poor or dysfunctional leadership in the C Suite
Jennifer Bush: It seems that in the end it all comes down to leadership and communication.
Dr. Richtermeyer: Definitely - even the best strategy in the world cannot be implemented with a poor leader.
Dr. Richtermeyer: You also raise a good point in terms of communication
Dr. Richtermeyer: Board members need to communicate effectively with each other and the senior leadership team of an organization. A healthy board culture is critical to enable effective communication.
Jennifer Bush: Again, thank you so much Dr. Richtermeyer for this great chat on governance.
Jennifer Bush: We really appreciate your time and information.
Jennifer Bush: You can expect professors like Dr. Richtermeyer - all of whom have a passion for what they teach and their students - in the Xavier MBA.