Outsourcing the Board: How Board Service Providers Can Improve Corporate Governance

Description

In this groundbreaking work, Stephen M. Bainbridge and M. Todd Henderson change the conversation about corporate governance by examining the origins, roles, and performance of boards with a simple question in mind: why does the law require governance to be delivered through individual board members? While tracing the development of boards from quasi-political bodies through the current 'monitoring' role, the authors find the reasons for this requirement to be wanting. Instead, they propose that corporations be permitted to hire other business associations - known as 'Board Service Providers' or BSPs - to provide governance services. Just as corporations hire law firms, accounting firms, and consulting firms, so too should they be permitted to hire governance firms, a small change that will dramatically increase board accountability and enable governance to be delivered more efficiently. Outsourcing the Board should be read by academics, policymakers, and those within the corporations that will benefit from this change.

Stephen M. Bainbridge is the William D. Warren Distinguished Professor of Law at University of California, Los Angeles, School of Law, where he teaches courses in corporate law and governance. Bainbridge has written over a dozen books and a hundred law review articles. He is best known as the originator of the director primacy theory of corporate governance. In 2008, 2011, and 2012, he was named by the National Association of Corporate Directors as one of the 100 most influential people in the field of corporate governance. His blog, ProfessorBainbridge.com, has been named five times by ABA Journal as one of the Top 100 Law Blogs. M. Todd Henderson is the Michael J. Marks Professor of Law and Mark Claster Mamolen Research Scholar at the University of Chicago Law School. Henderson researches and teaches in a wide range of fields from corporate law to American Indian law. His work has appeared in leading law reviews and has been covered in The Wall Street Journal and The Economist, among other places. Henderson is a frequent commentator in the media and at conferences around the world on topics of corporate governance. He serves as a strategic advisor to several start-up companies.