ABSTRACT
This chapter explores the skew between the two models of corporate decision-making, considers the more prominent alternative models which have been suggested, and proposes a direction for reform. These models are received legal model and working model. The received legal model of the corporation, the board selects officers, sets policy, and generally manages the corporation's business. The working model, however, the board normally performs none of these functions. The skew between the legal and working models of management structure, and the resulting dysfunctions, it is not surprising that proposals for reform of the board have become a permanent part of the American corporate scene. In many corporations the executives go so far as to wholly deny the board—supposedly entrusted with supreme power over the corporation—access to certain categories of information. Instead, directors are almost wholly dependent for information either on the very executives whose performance the information is supposed to reflect, on accountants who are themselves dependent on those executives.
