The W$J reports:
Independent board members typically provide oversight and monitoring of a company, while managers run operations. But when a crisis erupts, as at New Century, such directors increasingly are assuming a more hands-on role. Stronger governance standards adopted following corporate scandals -- and the prospect that directors could be held personally liable -- reinforce the trend. ... As a result, "the line between directors and managers is getting a little more blurry than what it has been," says David Larcker, a professor at Stanford University's Graduate School of Business.
Lots of useful anecdotal examples follow. None of this should come as a surprise to students of corporate governance, of course. As I explained in Why a Board? Group Decisionmaking in Corporate Governance, the board of directors is "a production team whose product consists of a unique combination of advice giving, on-going supervision, and crisis management." Hence, as Don Langevoort put it: "Absent some sort of crisis, outside members see their value largely in terms of constructive advice, giving insiders the benefit of an expert external perspective on the company’s uncertain world." In a crisis situation, however, the board must become more active. It must determine whether the crisis is the fault of senior management or the result of an exogenous shock. If the latter, the board must serve as a 24/7 monitoring and advising body to senior management. If the former, the board must depose incumbent senior management and move forward.