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In This Deep Crisis, Directors Are on Hyperdrive

Ah, the good old days. If you were a director, it meant that maybe every few months, you'd get together with management or with fellow directors on various committees, such as audit or compensation, and, of course, it would be bad form if you didn't bother showing up for the annual meeting.

Not today. The financial crisis has put board meetings on hyperdrive. Facing the worst economic downturn since the Great Depression, directors are insisting on more meetings, sometimes weekly, with their CFOs and other members of management.

They are having to educate themselves on exotic financial instruments such as synthetic bonds, collaterized debt obligations and credit default swaps. They need to know about liquidity levels, debt maturities, capital spending and foreign exchange. All of this is in addition to basic tasks, such as keeping track of everyday market and economic news.

Demands for information have become insatiable, giving pause to the idea of whether directors are now swamped in too much detail rather than too little as seems to be the historic case.

Some side effects include that directors are serving on far fewer boards because of time demands and far fewer CEOs of one firm have the time to serve on the board of another.

Whatever, it's suddenly a Brave New World.

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