Final answer:
The biggest complaint about boards of directors in their oversight of CEOs often concerns the board's independence and potential conflicts of interest that compromise their role in governance. The Lehman Brothers case exemplifies the consequences of these governance failures, such as a lack of accurate financial information for investors.
Step-by-step explanation:
The board of directors, elected by the shareholders, serves as a significant mechanism for corporate governance and oversight of top executives like the CEO. Issues with corporate governance can arise when there's a conflict of interest, such as when top executives have substantial influence over who is elected to the board, potentially compromising the board's independence. This can lead to the board prioritizing the interests of executives over the shareholders, which sometimes results in a focus on profits over employee satisfaction or a neglect of corporate social responsibility.
The case of Lehman Brothers highlights a situation where corporate governance failed in its role to provide accurate financial information to investors. The auditors and outside investors, like those who manage large mutual funds and pension funds, also play a critical role in corporate governance. However, their oversight is only as effective as the transparency and candidness of the information they receive from the company and its board.
In summary, for an organization's board of directors, the biggest complaints usually revolve around their oversight of the CEO and potential issues such as the lack of independence, focus on profit above employee satisfaction, lack of corporate social responsibility, and a possible lack of interest in company matters.