ABSTRACT
This chapter examines the political mechanisms of corporate governance: how the essential policy decision-making processes fit together and operate. The board of directors is the fulcrum of corporate governance, the critical nexus in which the fortunes of the company are decided. In maturity, the board represents the source of values and objectives that will sustain the vigour of the company. In the United States, directors' duties are generally governed by the laws of the state the company is incorporated in, and there is no direct federal codification of directors' duties. In the UK, directors' duties are largely embedded in the common law established over time, with some statutory interpretative overlay. There was certainly good reason for a dramatic change in board behaviour, since whatever may have gone before, the most spectacular case of a passive board was undoubtedly Enron, with the most appalling consequences.
