The Board View: Directors Must Balance All Interests

Barbara Hackman Franklin, the 29th U.S. secretary of commerce and international business consultant, believes that shareholder activism has grown in recent years, and that its presence has changed the normal interrelationship between investors, boards, and management. She cites hedge fund activists as an influence on other investors. Franklin also notes that focusing on the short term has caused some boards of directors to neglect core responsibilities, including succession planning and optimizing communication to shareholders. She stresses the importance of having a balanced scorecard for evaluating corporate performance, as this prevents overemphasizing any single measure to the detriment of the company.