Governance check

Use these questions to find out how a vendor is governed

Find out how a vendor is governed with these questions:

  • Does the company have a board-level governance committee? If so, how long ago was it established and when was the last time its charter was updated?

  • Does the board evaluate and grade the CEO? If so, how often? Who does the evaluation (a person or a committee)? Is it tied to compensation?

  • Who is on the board-level audit and compensation committees? What are their backgrounds?

  • What firms provide auditing and legal services, and how long have they been associated with the company?

  • How many independent directors are on the board, and who are they?

  • How is the stock performing and why, according to independent financial experts you trust?

  • Does the company expense stock options, and, if so, does it use the fair-value method? What effect on financials do stock options have, according to company reports?

  • What do peers say about the vendor?

Copyright © 2003 IDG Communications, Inc.

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