Final answer:
Today's boards of directors are being urged to enhance communication within the organization to improve corporate governance and stakeholder decision-making. This includes better oversight and transparency to ensure the company's operations align with shareholder interests.
Step-by-step explanation:
Today's boards of directors are increasingly being encouraged to go beyond traditional roles such as raising money and promoting the organization. Alongside these tasks, they are exhorted to increase communication levels between the board and the rest of the organization. This emphasis on communication stems from the need for better corporate governance, ensuring that the firm operates in the best interest of the shareholders. The board serves as the first line of oversight for top executives, a fundamental part of corporate governance that, when coupled with external audits and the influence of significant investors like pension funds or mutual funds, helps in maintaining the integrity and effectiveness of the organization.
Improving communication within the organization may help address concerns that stem from the fact that top executives often have substantial influence over board member selection, which can potentially lead to conflicts of interest or a lack of accountability. Effective communication strategies can support the transparency and flow of information necessary for informed decision-making by all stakeholders, including the shareholders who may not have the personal incentive or resources to nominate alternative board members.