Brief Review of Anglo-American Literature on Corporate Governance Models and Information of Non Executive Directors

by Giuseppe Desiderio

Abstract: This article surveys leading strands of the Anglo-American corporate governance literature to assess how different board models shape the information environment of non-executive directors (NEDs). Starting from the post-2019 re-framing of corporate purpose, it revisits the evolution from the advisory board to the monitoring board and maps subsequent alternatives—director primacy, shareholder primacy, team production, and conflict primacy—against their capacity to secure timely, decision-useful, and independently sourced information for NEDs. The analysis then considers design innovations aimed at overcoming informational capture by the CEO, including “Board 3.0” (strategy review committees supported by a dedicated strategic analysis office or “board suite”), the institutional revitalization of the company secretary under the UK Corporate Governance Code and the Guidance on Board Effectiveness, and the deployment of digital board portals. While digitalization and prospective AI-enabled decision support can improve access and continuity of monitoring, they do not alter the underlying allocation of powers and duties and may entrench “additive censorship” absent clear internal rules and accountability for curation. The central claim is that board effectiveness depends less on independence as status than on independence as an operational condition, anchored in information flows not intermediated by the CEO and architected by the board within the internal control system. Without such architecture, oversight mandates risk remaining programmatic rather than performative.

Summary: 1. Corporate Purpose and Board Design: How U.S. Models Shape Non-Executive Information Rights. – 2. From Director Primacy to Board 3.0: Reframing Independence as an Information Architecture

1. The North American literature has over time outlined different models of corporate governance ([1]) and some of them will be here examined in terms of their ability to improve the quality of information for non-executive board members. On corporate governance in general, it should be mentioned that further boost to the debate was provided by the «Principles of corporate governance» formulated by the Business Roundtable, which in 2019 sanctioned the overcoming of shareholder’s primacy ([2]) with the historic assumption, declared by the Association’s members (the CEOs of the largest U.S. corporations) in the «Statement on the Purpose of a Corporation», that in the conduct of their companies they declare that

«[w]hile each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders […]. Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country» ([3]).

Indeed, the manner and extent to which even these “new” goals are kept in mind in the development of strategies and thus taken on board by the company’s top operating management, i.e., first and foremost the CEO, propose for a new aspect the traditional issue of how the non-executive members of the board interact with the CEO and, even before that, how they take on the information about the company’s management that is instrumental in the exercise of monitoring action even with regard to these new goals along with the other more usual ones that the company pursues.

Moreover, in the American legal literature there are a lot of Authors that has for a long time and now widely pointed out the limits of the independent monitoring board model, at least with regard to listed companies, and has elaborated variants and envisaged evolutions placing itself, predominantly, downstream of the turning point marked by Melvin Eisenberg. This turning point in fact consisted in overcoming the perspective of the “advisory board model”, in which the directors were part of the CEO’s team, in favor precisely of the “monitoring board model”, where instead the board assumes the function of independent monitor of the CEO himself to protect shareholders. This model progressively transposed at the regulatory level in the United States, first with the Sarbanes-Oxley Act of 2002 and then with the Dodd-Frank Act of 2010 ([4]). The new speculations concern not only the role of the board and its relationship with shareholders and other stakeholders but also its fitness to perform its duties in relation to the weight assumed by the Chief Executive Officer (CEO), i.e., the Head of the company. This has led, first of all, to the configuration of underlying alternatives and thus new models of corporate governance.

2-.

Among these is the model for which the role of the board deserves to be placed at the center of the reflection on the company, intended as a network of contractual relationships, so as to theorize precisely a “director primacy model”, in which the board must be considered the holder of control over the company and operate «as a sort of Platonic guardian […] and whose power flows not from shareholders alone, but from the complete set of contracts constituting the firm» ([5]), without prejudice to the goal of maximizing shareholder whealth.

This perspective has evolved manifesting favor for so-called “board service providers”, understood not as advisors but true professional substitutes for the board ([6]). Entirely “internal” to North American law is then the opposition to the director primacy theory of shareholder’s primacy theory on the point that – without prejudice, of course, to sharing with the former the goal of shareholder whealth – the latter considers control properly allocated to the shareholders and not to the board, in order to support the ‘europeanizing’ proposal to give the shareholders competence over amendments to bylaws, mergers and other «transformative corporate events» ([7]).

Then, as a critical alternative to the shareholder’s primacy model arises the “team production model”, in which directors are characterized as “trustees for the corporation itself – mediating hierachs,” i.e., not being agents of the shareholders, whose function is therefore «not to protect shareholders per se, but to protect the enterprise-specific investments of all the members of the corporate ‘team’, including shareholders, managers, rank and file employees, and possibly other groups, such as creditors» ([8]). This approach is intended to enable the board to mediate among different stakeholders. This in effect creates the prerequisite for systematizing openings to issues related to corporate social responsibility. It is precisely this model that seems to have found a foothold in the mentioned Business Roundtable breakthrough.

A decisive reaction to the model, which puts in the hands of the board competencies as much in monitoring the CEO’s conduct as in making strategic choices, moves from the observation that the composition of the board itself does not allow for the disengagement of the latter for reasons of skills, available time and information. This leads to the proposal of a “conflict primacy model”, in which the board should be called in only in those areas where conflicts of interest with the CEO may arise [i.e., performance review, audit, appointments and compensation, on a permanent basis, and, occasionally, takeovers, related party relations, and derivative suit ([9])] so as to enhance the independence of board members where it is needed, and with the additional clarification that the CEO himself should not even have voting rights in the board ([10]). But this model, like its predecessors, offers no special specifications on the point of board information and how to ensure it.

Interesting ideas from this point of view are offered instead by those who hypothesize importing a new model, defined as “Board 3.0”, into the reality of listed companies. For its formulation, cues are drawn from the experience accumulated in the private equity sector to identify operational and functional paradigms suitable for giving effectiveness to the activity of participation of board members, other than the CEO, in the elaboration of company strategies without being rubber stamping the decisions of the CEO himself ([11]). This is a response to the problems underlying even the conflict primacy model but not reductive, as in the latter, but proactive. The goal would be to bring to the board – alongside the independent directors (the “2.0 directors” typical of the monitoring board) – new “3.0 directors”, as members of a new committee (the Strategy Review Committee), also remunerated on the basis of performance (e.g., a long-term stock-based compensation) and professionally equipped to do so effectively. The 3.0 directors in this specific role should also be supported by a Strategic Analysis Office [by others already referred to as the Board Suite ([12])], as a function of acquiring suitable elements to enable an autonomous ability to evaluate and measure the CEO’s strategic choices. It is thus intended to put the board – through its ad hoc committee, adequately supported by an equally ad hoc internal structure – in a position to carry out that in-depth strategic assessment; the same as that which, in private equity, is carried out by the investor (the sponsor) before and in view of the investment. The profile of increased costs is not minimized, but the advantages of the model – proposed, precisely as an option – are highlighted, represented by the greater appeal that investment in such a characterized company offers, e.g., to institutional investors.

Now, the models summarily referred to all have in common the consideration of the centrality of the CEO (and indeed none question it), even though the systems or remedies for containing its power are different. Similarly common, albeit in different accents, is the observation that the reporting of members of the governing body is not direct but is «secondhand» ([13]), even to the point of asserting the existence of a «knowledge deficit» ([14]) or «board informational capture» ([15]). As well as recognizing that the substantive quality of board information can be seriously compromised by the timing and quantity of documentation made available ([16]).

In response to these critical issues, several remedies have been proposed. Interesting is the aforementioned solution aimed at equipping the board with structures and expertise – the Board Suite supporting a board committee focused on strategy review – that would make it an informed interlocutor and capable discussant vis-à-vis the CEO in matters of strategy selection and review, if one is willing not to be swayed by the proverbial observation that «a camel is a horse designed by committee» ([17]).

There also interesting ideas regarding in particular the conditions for improving the flow of information functional to the monitoring of the conduct of the company by the non-executive component of the board. It should be borne in mind that it is precisely this aspect of monitoring, rather than that one relating to strategies, that assumes particular importance from the point of view of liability, which affects the performance of acts that are prejudicial not already those that are less profitable than others, even if abstractly possible downstream of different strategic choices (having otherwise to deny the existence of the Business Judgement Rule).

For this point of view, the hypothesis of establishing a Board Suite comes to the fore again, which could be used in order to support an activity of collecting but also organizing the information material provided by the CEO and his staff (together with that produced by the system of internal audit) to the board as well as, where appropriate, to the intermediate articulation represented by the existing board committees. But such a structure could also be the promoter of instances of further study that directors without delegated powers could appropriate and then forward to the delegated bodies.

Pursuing the same goal ([18]), to be considered positively also in a perspective of adoption by less complex companies, are the UK Code of Corporate Governance and especially the Guidance on Board Effectiveness, which enhance the figure of the company secretary ([19]), the former giving him an “advice” function in favor of all directors ([20]), while the latter, which devotes a special section to the secretary, provides that, albeit under the direction of the chairman, «the company secretary’s responsibilities include ensuring good information flows within the board and its committees and between senior management and non-executive directors, as well as facilitating induction, arranging board training and assisting with professional development as required» ([21]).

It seems clear that such a figure could actually improve the functionality of the board by offering itself as a hinge between CEOs and directors without delegated powers but also between the latter and the chairman. In effect, it is a corporate function, which can then be organized, according to the needs of each company, to coincide with an individual person or with a structure (the secretariat) at the head of which is the secretary. In short, the basic idea is to put a (more or less structured) insider in the service of (director) outsiders.

Other insights concern other practices aimed at improving the environmental/behavioral component of board functioning so as to enhance the phenomena of “back channel” or “side conversation” ([22]). By such are meant interactions between directors on the sidelines or otherwise outside board meetings, which certainly can improve the climate of board discussion and likely help nonexecutive directors overcome the natural reluctance to interject and ask questions, even understandable when they are newcomers to a board that has previously consolidated mutual acquaintance of members. Similar purposes are served by the UK Corporate Governance Code’s provision for meetings sponsored by the senior independent director, attended only by non-executive directors, or meetings sponsored by the chairman but still without the participation of executive directors ([23]).

Thus, these are pragmatic solutions aimed at improving the psychological situation of the director without executive powers when interacting with the chairman, the CEO, and the board as a whole. The suitability of such practices to affect the manner and timing of the formulation of investigative requests is evident, but this, of course, cannot offer additional and different powers than those with which each director is endowed.

Finally, there are proposals that mark the irruption of digitization even of boards of directors with the aim of increasing efficiency in addressing information flows to directors, such as, for example, that of establishing online portal boards, which would allow precisely direct online access of individual directors ([24]). These are organizational tools that are already available even to non-major corporate entities, judging by the offering of numerous such products, some of which are specifically aimed at boards of directors of small and medium-sized companies ([25]).

These tools, which are in effect software, may limit themselves to replacing the sending of paper documents or e-mails with attachments, to evolve into tools to support remote meetings until they become essentially permanent data rooms suitable for permanently representing the information base on which directors without proxies can and must rely, and thus not only with reference to pre-council information. Additional digital tools for monitoring and alerting on the progress of the most diverse aspects of social life could then also be grafted onto these supports of board interaction, which in the future could also affect the profile of the very continuity of monitoring. But as the possible portal board models vary, the structural question of who should feed them, how they should be fed, and what responsibility rests on those whose duty it is to feed them remains intact. And this profile leads back to the specific issue of information powers. Digital information and networking (using the Internet, intranet and other forms of electronic communication) are tools that can create new opportunities and improve the efficiency of decision-making but do not change the substance of the powers and duties of those involved: delegated bodies and the chairman, on the one hand, and directors without delegated powers, on the other. What must therefore be avoided is to give rise to a sophisticated and organized form of digital “additive censorship” ([26]): a room or rooms in which thousands of documents are stacked (even if sorted into folders) and a site in which thousands of links are piled (even if organized according to thematic and/or temporal criteria), have the same aptitude to inform, that is, very little or none. The portal board cannot be used as a ploy to pretend to inform by hiding information, i.e., merely opening digital big game hunting in the dark. So its use will have to be accompanied by internal regulations that still allow the structural issues mentioned earlier to come into focus and allocate responsibilities.

Further evolutionary profile, to which only a mention can be made, is that which contemplates the integration of artificial intelligence (AI) into the board’s decision-making process, i.e., with evaluations made by machines equipped precisely with AI ([27]). Hence, a “mixed human-machine board”, i.e., a “fused board,” including “AI directors,” is foreshadowed, even to the point of imagining “Algorithmic Entities” and “Leaderless Entities,” but these hypotheses, even when desirable, would imply a consequent radical rethinking of the corporate phenomenon itself as we know it ([28]), on which, however, it seems premature to engage in positive law discourse.

From the congeries of proposals and suggestions developed in the Anglo-American legal literature, it appears that the monitoring board is not entirely outdated but deserves to be reconsidered. Above all, in one respect: independence can no longer be regarded as the sole characteristic of directors without delegated powers and thus as a condition in itself for ensuring that the board functions at its best. The profile of directors’ information comes, therefore, to the fore. The trait that is most distinctly perceived is that of the hoped-for evolution of the consideration of independence as a status toward independence as an operational condition of the director, i.e., in which he or she acts independently, having been informed in an equally independent manner ([29]). But fundamentally, from a structural point of view, the landing place is still Eisenberg’s: information flows of internal controls not intermediated by the CEO, the architecture of which must be defined by the board so as to ensure the quality of information ([30]). In the absence of such an approach, even the recommendation set forth in the COSO Internal Control – Integrated Framework ([31]), Principle No. 2 — concerning the exercise of the board’s oversight responsibility — according to which «The board of directors demonstrates independence from management and exercises oversight of the development and performance of internal control», risks remaining a mere programmatic statement, devoid of any practical effectiveness, or, at best, becoming the object of purely rhetorical efforts by boards to demonstrate the existence of such independence from management and CEO that, in the absence of independent sources of information (not filtered by the CEO and his team), is very difficult to achieve.

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([1]) Legal literature on the concept of corporate governance is really broad, but given that regulatory environments and legal systems have been found to determine differences in corporate governance in different contexts (see M. Wright, S. Pruthi, A. Lockett (2005). International venture capital research: From cross-country comparisons to crossing borders. International Journal of Management Reviews, Vol. 7, Issue 3, pp. 135 ss., in particular p. 140; R. V Aguilera – M. Ruiz Castillo, Toward an updated corporate governance framework: Fundamentals, disruptions, and future research. Business Research Quarterly, Vol. 28, Issue 2, April 2025, https://journals.sagepub.com/doi/epub/10.1177/23409444251320399), for the purposes of this paper it seems sufficient to refer to the concept outlined in Organization for Economic Co-operation and Development. (2023). G20/OECD principles of corporate governance. (https://www.oecd.org/en/publications/2023/09/g20-oecd-principles-of-corporate-governance-2023_60836fcb.html), p. 6, where is assumed that «Corporate governance involves a set of relationships between a company’s management, board, shareholders and stakeholders. Corporate governance also provides the structure and systems through which the company is directed and its objectives are set, and the means of attaining those objectives and monitoring performance are determined.», with the clarification that only the part relating to internal relations between bodies and, in particular, the CEO and the board relating the flow of information will be considered here.

It should be noted that the examination of economic theories — which, albeit relevant, may serve as a framework for addressing the relationship between the CEO and the board, such as those focusing on six perspectives: agency, resource dependence, upper echelons, stewardship, social network, and institutional theory — falls outside the scope of the present inquiry. For an overview of these theories, see B.K. Boyd, K.T. Haynes, F. Zona, (2011), Dimensions of CEO-Board Relations. Journal of Management Studies, Vol. 48, Issue 8, pp. 1892-1923 (https://doi.org/10.1111/j.1467-6486.2010.00943.x).

([2]) The Shareholder primacy model based on agency theory emerged as a dominant perspective in the 1980s, driven by the rise of agency theory (formulated by W.H. Meckling – M.C. Jensen, Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, Vol. 3 (1976), pp. 305 ff.). «This theoretical framework emphasized shareholder value maximization as the principal objective of corporate governance» as argued by R. V Aguilera – M. Ruiz Castillo (note 1).

([3]) The Business Roundtable in an association established in U.S. of America in 1972, attended by CEOs of the largest American companies (which in 2018 collectively employ 15 million people and generate revenues of more than USD 7 trillion), that since 1978 has periodically published the «Principles of Corporate Governance», whose new «Statement on the Purpose of a Corporation» (in https://opportunity.businessroundtable. org/wp-content/uploads/2020/08/BRT-Statement-on-the-Purpose-of-a-Corporation-August-2020-1.pdf) which was adopted on August 19, 2019 and signed, as of that date, by 181 members. The specific commitments enunciated in the statement between the two quoted propositions in the text are:

«- Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.

– Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.

– Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.

– Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.

– Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders».

For an assessment of the influence that CEOs of large public companies also explain on U.S. policy see A. Cohen – M. Hazan – R. Tallarita – D. Weiss, The Politics of CEOs, in J. Legal Analysis, vol. 11 (2019), Issue 1, pp. 1 ff. On the new statement of the Business Roundtable see J.M. Lipshaw, The False Dichotomy of Corporate Governance Platitudes (July 29, 2020), in Journal of Corporation Law, Vol. 46, Issue 2, pp. 345 ff. (https://ssrn.com/abstract=3660450), who downplays its significance by noting that «the business judgment rule, which is an actual rule of decision, justifies almost any allocation of corporate surplus having an articulable connection to the best interest of the enterprise, and subsumes platitudes like the SWMP [i.e. shareholder wealth maximization principle], posing as rules of law» (ibidem, pp. 349-350) ; in response and for critical considerations, see S.M. Bainbridge – W.D. Warren, Making Sense of The Business Roundtable’s Reversal on Corporate Purpose, in UCLA Law School – Law & Economics Research Paper No. 20-03 (https://lowellmilkeninstitute.law.ucla.edu/wp-content/uploads/2020/08/), which points out that the Business Roundtable cannot change the law and then «the law of corporate purpose remains that directors have an obligation to put shareholder interests ahead of those of other stakeholders and pursue long-term sustainable profits for those shareholders» (p. 4). In a similarly critical sense, for the unnecessary dichotomous shareholder/stakeholder simplification, states J.M. Lipshaw in the article mentioned above (The False Dichotomy of Corporate Governance Platitudes). It has to be underlined that the research of L. Bebchuk – R. Tallarita. Was the Business Roundtable statement on corporate purpose mostly for show?—(1) Evidence from lack of board approval. Harvard Law School Forum on Corporate Governance. (2020, August 12) (https://corpgov.law.harvard.edu/2020/08/12/was-the-business-roundtable-statement-on-corporate-purpose-mostly-for-show-1-evidence-from-lack-of-board-approval/), reveals that the vast majority of signatory firms did not have their boards approve joining the statement, and only a few companies had formally modified their corporate governance documents to reflect a commitment to broader stakeholder interests.

However, on December 2019, the World Economic Forum released the “Davos Manifesto 2020” introducing the concept of «stakeholder capitalism» which emphasized the importance of stakeholder responsibility in corporate governance in the fourth industrial revolution (https://www.weforum.org/stories/2019/12/davos-manifesto-2020-the-universal-purpose-of-a-company-in-the-fourth-industrial-revolution/).

([4]) For a brief but dense summary of the reasons for and timing of this transition as well as its limitations manifested over time, see R.J. Gilson – J.N. Gordon, Board 3.0. An Introduction, in The Business Lawyer, vol. 74 (2019), pp. 351 ff. With a clear exposition U. Rodriduez, A Conflict Primacy Model of the Public Board, in Univ. Ill. L. Rev., 2013, pp. 1051 ff., p. 1060, states that «board monitoring meant monitoring the CEO»; Rodriguez refers to the fact that the monitoring board and its independence were incorporated into law, taking into account the chronological sequence in which «[r]eacting to the Enron and WorldCom scandals, the Sarbanes-Oxley Act of 2002 effectively required an independent audit committee, and (at the SEC’s behest) the New York Stock Exchange (NYSE) and NASDAQ each required listing firms to have a majority independent board, and independent nomination and compensation committees. Even before Sarbanes-Oxley, however, best practices dictated that boards move toward ever-greater board independence. Formalizing what was by then a de facto requirement, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 mandated that publicly traded companies have independent compensation committees». This normative context also allows for an understanding of the directions along which the academic debate developed, which is briefly given later in the text.

([5]) S.M. Bainbridge, Director Primacy: The Means and Ends of Corporate Governance, in Northw. U. L. Rev., vol. 97 (2003), p. 560, so that it is precisely being other than shareholders that justifies the centrality of the board, within a framework supported by the law, the Author concludes that «[t]he statute thus recognizes that the board of directors hires capital, not vice-versa» (ibidem, p. 574), and this leads him to oppose the hardening, in terms of rights and voice, of the position of shareholders [on this point in particular see Id., Director Primacy and Shareholder Disempowerment, in Harvard L. Rev., vol. 119 (2006), pp. 1735 ff.]. The same Author [Id., Corporate Governance after the Financial Crisis, Oxford, Oxford University Press, 2012, p. 53] the same author however acknowledges that the credit (or blame) for the modern understanding of the role of the board should be attributed to M. Eisenberg (ibidem, p. 53)]. The statement that a firm is a nexus of contracts was originally made by M.C. Jensen – W.H. Meckling, The Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure, in J. Financial Economics, vol. 3 (1976), pp. 305 ff., in part. pp. 310-311. For criticism of this theory see M.A. Eisenberg, The Conception That the Corporation is a Nexus of Contracts, and the Dual Nature of the Firm, in J. Corporation L., vol. 24 (1998), pp. 819 ff., and exactly pp. 827 ff.

([6]) S.M. Bainbridge – M.T. Henderson, Outsourcing the Board: How Board Service Provider Can Improve Corporate Governance, Cambridge University Press, 2018, in part. pp. 7-8. Criticizes this solution F. Stevelman – S.C. Haan, Board Governance for the Twenty-First Century, in The Business Lawyer, vol. 74 (2019), pp. 329 ff., where in particular concern is expressed about the emergence of, among other things, risks to competition (pp. 335-336) and, in any case, concentration of managerial power in the hands of BSPs (p. 337); R.J. Gilson – J.N. Gordon (note 3), pp. 364-365, are concerned about further «agency problems» between the company and BSP.

([7]) L.A. Bebchuk, The Case for Increasing Shareholder Power, in Harv. L. Rev., vol. 118 (2005), pp. 833 ff., in part. p. 835; Id., The Myth That Insulating Boards Serves Long-Term Value, in Columbia L. Rev., vol. 113 (2013), pp. 1637 ff.

([8]) M.M. Blair – L.A. Stout, A Team Production Theory of Corporate Law, in Virginia L. Rev., vol. 85 (1999), pp. 247 ff., exactly pp. 280 and 253. In this regard, see the statement by M.A. Eisenberg (nota 395), p. 833, to the effect that, on closer inspection, in Blair and Stout’s approach, «the nexus of contracts conception is connected in a fundamental way, not to shareholder primacy, but to a communitarian conception of the corporation in which all groups with an interest in the corporation are put on an equal footing». The team production model is then reproposed by A. Kaufman – E. Englander, A team production model of corporate governance, in The Academy of Management Executive, vol. 19 (2005), n. 3, pp. 9 ff., who, in accordance with this model, have developed criteria for the desirable composition of the board that lead to the opportunity to give representation on the board to executives, who can bring the specific professional expertise of the sector, and to employees, bearers of the specific and concentrated risk associated with their jobs and related remuneration, so as to leave the audit, nomination and compensation committees to the independent directors (ibidem, pp. 18-19). In favor of pluralism of relevant interests but from the perspective of English law see B. Choudhury – M. Petrin, Corporate Duties to the Public, Cambridge: Cambridge University Press, 2019, in part. pp. 39 ff.

([9]) According to the definition offered by the Cornell University’s Legal Information Institute – LII (in https://www.law.cornell.edu/wex/shareholder_derivative_suit) «A shareholder derivative suit is a lawsuit brought by a shareholder on behalf of a corporation. Generally, a shareholder can only sue on behalf of a corporation when the corporation has a valid cause of action, but has refused to use it. This often happens when the defendant in the suit is someone close to the company, like a director or a corporate officer.  If the suit is successful, the proceeds go to the corporation, not to the shareholder who brought the suit».

([10]) U. Rodridues, A Conflict Primacy Model of The Public Board, Univ. Ill.L. Rev., vol. 2013, No. 3, pp. 1051 ff.

([11]) R.J. Gilson – J.N. Gordon (note 3), pp. 358 ff. (in particular p. 359, note 16, for further bibliographical references). Indeed, well before academia, suggestions in this regard have been developed by practitioners: see in this regard A. Beroutsos, A Freeman. C.F. Kehoe, What public companies can learn from private equity, in Mc Kinsey on Finance, n. 22, Winter 2007, pp. 1 ff., where, with regard to non-executive directors, they note that they «have no research staff, no budgets to hire external support, and access only to data that management supply» (therein, p. 2) and then «may simply lack the necessary information» (ibidem, p. 4).

([12]) Così K. Kastiel – Y. Nili, “Captured Boards”: The Rise of “Super Directors” and the Case of Board Suite, in Wisc. L. Rev., 2017, n. 1, pp. 1 ss., in particular pp. 7 and 32 ff., who also pose the problem of the degree of autonomy of the members of this structure, who – according to the Authors – it would be desirable for them to be hired by the board even if paid by the company, without excluding shareholder intervention regarding their remuneration (therein, p. 35).

([13]) This expression is used by K.A. Alces, Beyond the Board of Directors, 46 Wake Forest L. Rev., vol. 46 (2011), pp. 783 ff., p. 783. For the similar observation, among many, see: M.A. Eisenberg (nota 232), pp. 244 ff.; L.E. Mitchell, Structural Holes, CEOs, and Informational Monopolies: The missing Link in Corporate Governance, in Brook. L. Rev., vol. 70 (2005), n. 4, pp. 1313 ff., in part. p. 1349 where, particularly sensitized by the Enron and WorldCom scandals, he notes that «only the CEO is in a position to control and manipulate information flows to the board. This leaves the CEO in an enormously powerful position, with every incentive to present information to the board in a light that is most favorable to him» and adds that boards without non-independent directors accentuate the CEOs power because, in the absence of others having relationships with the structure (a desirable situation in the case of the monitoring board), they reinforce the monopoly of information (ibidem, pp. 1348 ff.); R.J. Gilson – J.N. Gordon (note 3), p. 357;

([14]) L.M. Fairfax, The Uneasy Case for the Inside Director, in Iowa L. Rev., vol. 96 (2010), pp. 127 ff., a p. 165.

([15]) K. Kastiel – Y. Nili (note 11), pp. 5 ff.

([16]) Laconically, N. Sharpe, The Cosmetic Independence Of Corporate Boards, Seattle U. L. Rev., vol. 34 (2011), pp. 1435 ff., a p.1454, he notes how it is recurrent for administrators to obtain information shortly before the meeting meetings and the material is often voluminous and poorly organized, so that the «[d]irectors receive information packets prepared by the CEO or by the executives who work for her; directors rarely have channels outside of the CEO for information gathering. If executive management’s vision of the company is flawed, the board’s information will share the same flaws». Conf. U. Rodriduez (note 3), pp. 1061-1062.

([17]) This statement is said to have been uttered by Sir Alec Issigonis, who designed the iconic «Mini» car in 1959.

([18]) This is admitted by the same K. Kastiel – Y. Nili (note 11), p. 35, justifying the alternative by the circumstance that «the U.S. presents a different governance structure».

([19]) The Code, which is the “update” of the so-called Cadbury Code and in the current version approved in July 2018, is prepared by the Financial Reporting Council – FRC (https://www.frc.org.uk/getattachment/88bd8c45-50ea-4841-95b0-d2f4f48069a2/2018-UK-Corporate-Governance-Code-FINAL.pdf) and is “joined,” for what is of interest here, by the aforementioned Guidance on Board Effectiveness, explanatory of the principles and provisions contained in the Code as well as, for the benefit of audit committees, by the Guidance on Audit Committees and the Best Practice guide to Audit Tendering (also available at https://www.frc.org.uk/). It is worth mentioning that in the United Kingdom, at the legislative level, the Company Act of 2006, in Part 12 (headed “Company secretaries”), requires the appointment of a secretary only for public companies (section 271), not instead for private companies (section 270), unlike the Company Act of 1985, which instead required the appointment for both categories of companies. Section 273(2)(a) provides professional requirements for the secretary while no governance skills are specified.

([20]) In fact, in the Code Principle “I” («The board, supported by the company secretary, should ensure that it has the policies, processes, information, time and resources it needs in order to function effectively and efficiently») is followed by Provision 16, which states that «All directors should have access to the advice of the company secretary, who is responsible for advising the board on all governance matters. Both the appointment and removal of the company secretary should be a matter for the whole board». The importance of the role of the secretary is underlined by the plenum’s competence in appointing and removing the secretary, as well as by its inclusion in senior management, for which succession plans are recommended (Principle “J” and note 4).

([21]) This is stated in § 81 of the Guidance on Board Effectiveness, which in § 83 also recommends that «It is the responsibility of the company secretary to ensure that directors, especially non-executive directors, have access to independent professional advice at the company’s expense where they judge it necessary to discharge their responsibilities as directors of the company […]» and in § 85 that «The company secretary’s effectiveness can be enhanced by building relationships of mutual trust with the chair, the senior independent director and the non-executive directors, while maintaining the confidence of executive director colleagues». Please note that in the following § 113, among the elements relevant for the purposes of the periodic assessment of the board, the following are indicated: «quality and timing of papers and presentations to the board» (10th bullet point) and «effectiveness of the company secretary/secretariat» (13th bullet point).

([22]) H.K. Gardner – R. Peterson, Back Channels in the Boardroom, in Harvard Business Rev., Sept.-Oct. 2019 (in https://store.hbr.org/product/).

([23]) This is what Provisions 12 and 13 of the Code recommend, respectively. The Guidance on Board Effectiveness, with regard to meetings held on the initiative of the chair with directors without delegated powers, clarifies in § 61 that these take place «in order to facilitate a full and frank airing of views».

([24]) For the portal board proposal, see R.J. Thomas – M. Schrage – J.B. Bellin – G. Marcotte, How Boards Can Be Better — a Manifesto, in MIT Sloan Management Rev., vol. 50 (2009), no. 2, pp. 72-73, who also advocate the use of «interactive, mobile and social networking»  to convey control dashboards and scoreboards, i.e., tools for the graphical visualization of trends (such as heat maps) and particularly suitable for signaling alerts for critical circumstances or those that deserve attention, based on metrics that the board has previously identified. Portal boards are also mentioned by K. Kastiel – Y. Nili (note 11), p. 10. For a broader perspective, in which forms of open communication are called upon to generate a new ecosystem of relationships not only within the company and its decision-making process but also in its external relations, particularly with shareholders and other stakeholders, see M. Fenwick – J.S. McCahery – E.P.M. Vermeulen, The End of ‘Corporate Governance: Hello ‘Platform’ Governance, in European Bus. Organization L. Rev., 2019, issue 1, pp. 171 ff., in particular pp. 187 ff.

The US market already offers a multitude of software products that meet a wide range of needs, to the extent that there are websites that describe, test, and rank these products, such as «Portal Board» (https://board-room.org/ accessed August 28, 2025).

([25]) To get an idea of the breadth of this offering see the web site https://www.capterra.it/directory/30899/board-management/software (accessed August 28, 2025).

([26]) This is a translation of the expression “censura additiva” coined by U. Eco, Sette anni di desiderio, Milano, Bompiani, 1983, p. 129 ff., in which the notion of censorship is lucidly recalled even when the information is precisely placed side by side (but the same applies a fortiori when diluted and buried in between) with others, so as to bring about a censorial effect far more insidious than exclusionary censorship, since additive censorship is achieved by hiding, through addition, the act of hiding.

([27]) There is no commonly accepted definition of AI, but in this context it refers to «the science and engineering of making intelligent machines, especially intelligent computer programs»: J. McCarthy, What is AI? / Basic Questions, in http://jmc.stanford.edu/artificial-intelligence/ what-is-ai/index.html. In the European Union the Regulation (EU) 2024/1689 of 13 June 2024 (the Artificial Intelligence Act), provides this definition: «‘AI system’ means a machine-based system that is designed to operate with varying levels of autonomy and that may exhibit adaptiveness after deployment, and that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments». It’s important to point out that the purpose of AI Act is to «improve the functioning of the internal market by laying down a uniform legal framework in particular for the development, the placing on the market, the putting into service and the use of artificial intelligence systems (AI systems) in the Union, in accordance with Union values, to promote the uptake of human centric and trustworthy artificial intelligence (AI) while ensuring a high level of protection of health, safety, fundamental rights as enshrined in the Charter of Fundamental Rights of the European Union (the ‘Charter’), including democracy, the rule of law and environmental protection, to protect against the harmful effects of AI systems in the Union, and to support innovation.»

([28]) See M. Petrin, Corporate Management in the Age of AI, Columbia Business L. Rev., vol. 2019, Issue 3, pp. 965 ff., who state that: «the step from AI generating and suggesting expert decisions for the managers (which in some areas in already common today) to AI making these decision in hardly insumountable» (ibidem, p. 968). The same Author, on the assumption that an «AI director» is capable of replicating the decision-making process of a group of natural persons — even accounting for the benefits of diversity (ibidem, pp. 1002-1003) — goes so far as to envisage the personification of AI algorithms, leading to a corporate structure in which human directors would no longer exist (ibidem, pp. 1022 ff.). The above leads D. Tapscott – A. Tapscott, Bolckchain Revolution: how the technology behind bitcoin is changing money, business and the world, New York, Penguin, 2016, p. 127, to predict that «a corporation without executives, only shareholders, money and software. Code and algorithms could replace a layer of representatives (i.e., the executive board), with shareholders exerting control over that code» giving rise to «Distributed Autonomouses Enterprises». For reasons that should lead us to temper enthusiasm for the excesses of this robot-oriented future, see L. Enriquez – D.A. Zetzche, Corporate Technologies and the Tech Nirvana Fallacy, European Corporate Governance Institute (ECGI) – Law Working paper, n. 457, 2019.

([29]) Here, we can only briefly mention the issue of why independence should be reconsidered as a distinctive feature of the non-delegated component of the board, so that the optimum would be for all board members, except for the CEO, were independent, while also taking into account the argument that the role of insider directors should also be valued for the contribution they can make to the awareness and information of the administrative body. In this regard, we note § 85, last sentence, of the FRC – Guidance on Board Effectiveness, which observes with regard to executive directors that «[t]hey are in a unique position between the executive and the board, and well placed to take responsibility for concerns raised by the workforce about conduct, financial improprieties or other matters». Perhaps the time has come to consider outdated the notion that a board in which the CEO is faced with a group of directors entirely without delegated powers allows the former’s power to be reduced.

([30]) M.A. Eisenberg, The board of Directors and Internal Control, Cardozo L. Rev., vol. 19 (1997), pp. 246 ff., who also considers skepticism as a possible alternative approach to overcoming information asymmetries, but considers it possible «only when the person who supplies the relevant information has a known monotonic agenda» concluding, quite understandably, that «only when the person who supplies the relevant information has a known monotonic agenda» (ibid., p. 246).

([31]) Reference is made to the set of principles (so called COSO Framework) developed in 1992 by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and updated in 2013. COSO is an independent private organization established in 1985 by the leading American accounting and internal auditing organizations. The COSO Internal Control – Integrated Framework (2013) is published by COSO and accessible at https://www.coso.org/ and along the Enterprise Risk Management – Integrated Framework (so called COSO ERM) in one of the most important standard for the architecture of the corporation’s internal control in a broad sense.

Giuseppe Desiderio is associate professor of Economic Law at Università Parthenope of Naples