Corporate Governance and Role of CEO in Engineering Companies

Abstract

Although corporate governance has seldom been addressed in engineering management literature, it has an extremely critical role: The protection and creation of shareholder value by means of the appointment, development, and support of strong management. The intent of this research is to suggest some best practices regarding the modus operandi of the board of directors in relation to its interaction with the CEO and ability to obtain reliable and objective information outside of the senior management team. This study is done in light of the major metamorphoses that have taken place in corporations during the last 2 decades—mainly, the advent of shareholder activism. It applies to U.S. corporations that are already in existence or in the process of being formed. This research relies on 54 survey results and six structured interviews with individuals who have had significant experience in the corporate governance of U.S. civil engineering and diversified manufacturing companies.