In this new article: "How Netflix Redesigned Board Meetings," Stanford Rock Center for Corporate Governance David Larcker and Brian Tayan highlight two unique governance practices at Netflix that aim to significantly enhance directors' access to and understanding of key company information pertinent to their oversight responsibilities without inappropriately infringing on management's turf.
One practice - "Governance by Walking About" - entails attendance (but not interference or participation) by one or more directors at various, ordinary-course management meetings - monthly top management staff meetings; quarterly, broader management pool staff meetings; and quarterly business review gatherings of the top 500 employees. The article notes:
One director describes the benefit of attending management meetings: "You see a different level of dynamic of the executive team. You really see how different individuals contribute, you see their expertise, you see the voice that they have around the table, and you see the dynamic with the CEO. You see how the topics that have been discussed, resolved, and reported on in a board meeting actually got processed."
The other practice - "A New Way to Write Board Memos" - describes directors' active engagement with an iterative, online memo prepared and shared by the 90 top executives a few days before each board meeting addressing business performance, industry trends, competitive developments, and other strategic and organizational issues, which enables directors to drill down for greater detail on particular topics and ask questions and receive responses from management within the memo.
According to the article, these governance practices reportedly bolster director confidence in management and result in more efficient board meetings, among other benefits.