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An effective advisory board, properly composed and structured, can provide non-binding but informed guidance and serve as a tremendous ally in the quest for superior corporate governance. This author, a lawyer with significant experience on boards of directors, offers a helpful blueprint for establishing an effective advisory board.

A board is often a snapshot of the organization: There are a lot of talented individuals, but the real challenge is getting them to work together, for the common good. These professors have developed five principles to enhance the process. The first principle? It starts at the top, with the chairman.

An alliance can be broken or underperforming, yet too many companies fail to see that their partnerships are just drifting or not producing. Recognizing that an alliance is broken and taking steps to mend the various relationships are vital if a company is to realize its expected ROI. This author has sound advice for maximizing the return from the substantial investment in an alliance.

Managing your company's goals in an alliance of 10 or more partners presents particular challenges. Managed properly, the constellation represents a real opportunity to win. Becoming part of an alliance constellation, like the airline industry's Star Alliance, can help a company compete and win. And while a constellation is, in some ways similar to a bi-lateral alliance, it also presents particular challenges. This author discusses these challenges, and some tactics that managers can use to make a constellation - and their own company's strategy - succeed.

Making the transition to Vertical Solutions Marketing is an appealing option for growing revenues. Managers would do well to read this article before choosing this option. Vertical Solutions Marketing is an appealing option for growth, especially in an era in which organization have already been pared to the bone. But managing the evolving tension between the company's old and new business structures and sharing and transferring resources among the solutions units must be done carefully if the move to VSR is to succeed. These authors suggest 11 best practices.

Enterprise-wide risk management contributes to better governance, yet despite the pressures, many companies are in no hurry to implement ERM. Despite pressures to do so, many companies have yet to implement practices for better risk management. Such practices, whether implementing Enterprise-wide Risk Management or putting better information in the hands of directors, greatly improve corporate governance, these authors discovered. Moreover, they make the risk manager's job much more important.

Well-designed incentives, more than checks and balances, will help reduce the information asymmetry between senior management and the board of directors. Information asymmetry may never be more pronounced than in the imbalance between managers and board members. Simply put, management knows more than the board. To level the playing field, the board can implement performance-based incentive systems. But as these authors point out, to what extent should boards integrate financial and non-financial measures of performance in corporate incentive plans?

Fix the audit committee -- make it stronger and more independent -- and you'll fix what's wrong with corporate governance. Not so, says this highly expert governance consultant. Audit committees are a strange invention. They are supposed to provide the independence that their master-the full board-does not provide, but their accountability is often unclear. So, how did this peculiar state of affairs come to be? And what are the chances of real change?

Independent directors are showing up on more and more boards, and organizations must recognize and meet those directors' needs for information. It is now generally acknowledged that most boards need more directors who are truly independent. But the very fact that new directors are independent implies that they are, unwittingly and to a certain extent, uninformed about the company and its business. Which is why the quality of the information they get from the company must be very high.

Change is imperative for organizations to maintain competitiveness in a dynamic environment. Yet despite various tries, the success rates for major organizational change efforts have been rather dismal. This article identifies the reasons that organizational change usually fails, demonstrates that the errors made in the change process are rooted in organizational behaviour, and argues that leaders have not recognized the importance of emotions in creating successful change. While ideas for leading change exist, there are too few decision-makers who are capable of translating the ideas and following the guidelines that lead to a concerted, well guided effort to lead change. The author argues that all change is individual change. Leaders have to lead other individuals and convince them to change. The article chronicles the importance of appealing to the heart in leading change. Because change is fundamentally about feelings, companies that want their workers to contribute with their heads and hearts have to accept that emotions are essential to the new management style. The article also examines eight ways in which leaders can motivate the heart. Leaders have to ensure that individuals are convinced of the need for change; select a team of people to advocate the need for change, get individuals to trust the team and inspire confidence in the ability for change; create a vision that is clear, creative and viable; communicate in a way that is simple, heartfelt, aligned with people's feelings and speaks to their anxieties; let individuals express how they feel; celebrate interim successes; be persistent in change efforts and lastly, ensure that changes form an integral part of the corporate behavioural pattern.

What could be more fundamental to management, or more difficult, than motivating people? After all, a manager, by definition, is someone who gets work done through others. But how? A typical recipe for motivation calls for a mixture of persuasion, encouragement, and compulsion. Yet the best leaders, we suspect, need no recipe: They get people to produce great results by appealing to their deepest drives, needs, and desires. And so we discovered when we asked a dozen of the world's top leaders to describe how they each met a daunting challenge in motivating an individual, team, or organization. Some of the leaders appeal to people's need for the rational and the orderly: Mattel's Robert Eckert emphasizes the reassuring power of delivering a consistent message, and HP's Carly Fiorina focuses on facing hard truths and setting step-by-step goals. Some, like celebrated oceanographer Robert Ballard, Pfizer CEO Hank McKinnell, and BP America president Ross Pillari, see the powerful motivating effects of asking people to rise to difficult challenges. Others focus more on the human spirit, appealing to the desire to do something, as BMW's Chris Bangle puts it, "rare, marvelous, and lasting." And quite a few inspire through example, as Dial chairman Herb Baum did when he donated $1,000 from his bonus to each of the company's 155 lowest paid people.

We live in a knowledge economy. The core assets of the modern business enterprise aren't its buildings, machinery, and real estate, but the intelligence, understanding, skills, and experience of its employees. Harnessing the capabilities and commitment of knowledge workers is arguably the central managerial challenge of our time. Unfortunately, it is a challenge that has not yet been met. Corporate ownership structures, governance systems, and incentive programs--despite the enlightened rhetoric of business leaders--remain firmly planted in the industrial age. In this article, the authors draw on history to lay out a model for a democratic business organization suited to the knowledge economy. The Athenian model of organizational democracy offers a window into how sizable groups of people can, in an atmosphere of dignity and trust, successfully govern themselves without resorting to a stifling bureaucracy. Such a system provides the synthesis of individual initiative and common cause that today's companies need to achieve if they're to realize the full power of their people and thrive in the knowledge economy.

Managers who motivate with incentives and the power of their vision and passion succeed only in energizing employees who want to be motivated. So how do you motivate intractable employees--the ones who never do what you want and also take up all your time? According to Nigel Nicholson, you can't: Individuals must motivate themselves. Instead of pushing solutions on problem employees, the manager should pull solutions out of them by creating circumstances in which the employees can channel their motivation toward achievable goals. That means addressing any obstacles--possibly even the manager's own demotivating style--that might be hindering the employees. Using detailed examples, Nicholson walks the reader through his method, pointing out potential pitfalls along the way. First, the manager creates a rich picture of the problem person. Second, the manager exercises flexibility and reframes goals so that the employee can meet them. Third, in a carefully staged, face-to-face conversation, the manager meets with the problem employee on neutral ground.

What's wrong with executive compensation, and what can we do about it? HBR and the University of Delaware's Center for Corporate Governance convened a roundtable of compensation experts last October on the university's campus in Newark, Delaware. The 12 panelists, from CEOs to investors, from the professionals who advise them to a chief justice who rules on their disputes, provided an extraordinary diversity of viewpoints. The panelists began by debating ways to align the interests of the senior executives with the long-term interests of the company. But the discussion expanded to cover broader questions of corporate governance and company values. It was a lively and wide-ranging discussion of one of business's most pressing issues.

It's a manager's perennial question: "How do I get an employee to do what I want?" The psychology of motivation is very complex, but the surest way of getting someone to do something is to deliver a kick in the pants--put bluntly, the KITA. Companies usually resort to positive KITAs, ranging from fringe benefits to employee counseling. But although a KITA might produce some change in behavior, it doesn't motivate. Frederick Herzberg, whose work influenced a generation of scholars and managers, likens motivation to an internal generator. An employee with an internal generator, he argues, needs no KITA. Achievement, recognition for achievement, the work itself, responsibility, and growth or advancement motivate people. The author cites research showing that those intrinsic factors are distinct from extrinsic, or KITA, elements that lead to job dissatisfaction. Jobs can be changed and enriched. Managers should focus on positions where people's attitudes are poor. The investment needed in industrial engineering is cost effective, and motivation will make a difference in performance.

What has long been recognized by teachers, physicians, and behavioral scientists holds true for management: One person's expectations shape another person's behavior. If a manager has high expectations, employees are likely to excel; if expectations are low, employees will likely respond with poor performance. In this HBR classic article from 1969, J. Sterling Livingston draws on numerous case studies and other research to demonstrate the importance of managerial expectations to individual and group performance. Consider the insurance executive who identified his six best agents and assigned them to his most capable manager. Not surprisingly, this group surpassed its already ambitious target. Equally unsurprising was what happened to a group of low producers assigned to the company's least capable manager. Their performance declined even further. But what happened to the group of average agents assigned to an average manager? That group increased its productivity by a higher percentage than the top group, because the manager refused to consider herself--or her agents--less capable than the superstars. And managers' beliefs about themselves influence how they view and treat their employees.

In this 1970 classic HBR article, Harry Levinson shares practical insights into the mysteries of motivation and takes a fresh look at the use and abuse of the most powerful tools for inspiring and guiding complex organizations. He argues that to motivate people successfully, management must focus on the question, "How do we meet both individual and organizational requirements?" When we make assumptions about individual motivations and increase pressure based on them, we ignore the fact that people work to meet their own psychological needs. Commitment must derive from the individual's wishes to support the organization's goals. Yet, the individual's desires are entirely absent from most performance measurement systems; managers assume that these desires are perfectly aligned with corporate goals and that if they're not, the individual should move on. Self-motivation occurs when individual needs and organizational requirements converge. Successful management systems begin with the employee's objectives. The manager's task is to understand the employee's needs and then, with the employee, assess how well the organization can meet them.

Nowadays, with organizations growing ever flatter and responsibility being pushed further down the ranks, admitting to a desire for power is a little out of fashion. But as the research in this 1976 classic HBR article shows, power is essential to good management. In fact, when it comes to managing big companies, the desire for power--that is, a manager's desire to have an impact, to be strong and influential--is more important than the need to get things done or the wish to be liked. The need to achieve, while important in small companies, actually becomes counterproductive in large, complex organizations, leading managers to try to do things themselves rather than spread tasks among many people. And managers who need to be liked tend to make exceptions for particular subordinates' needs, undermining morale. But seeking power is not the same as seeking glory. People who want power only to further their own careers, rather than the goals of the organization, tend to have subordinates who are loyal to them but not to the company, making them less effective on the whole. And wanting power is not the same as throwing it around. Correlations between employee morale and sales figures show that individuals who manage by fiat are less effective than those whose style is more democratic. As the many examples show, top executives can learn to tell who the good managers are likely to be and to train existing ones to be more effective. McKinsey Award Winner.

Unlike the traditional factors of production--land, labor, and capital--knowledge is a resource that can't be forced out of people. But creating and sharing knowledge is essential to fostering innovation, and it is the key challenge of the knowledge-based economy. To create a climate in which employees volunteer their creativity and expertise, managers need to look beyond the traditional tools at their disposal. They need to build trust. The authors studied the links among trust, idea sharing, and corporate performance for more than a decade. They explored why managers of local subsidiaries so often fail to share information with executives at headquarters, and they studied the dynamics of idea sharing in product development teams, joint ventures, supplier partnerships, and corporate transformations. They offer an explanation for why people resist change even when it would benefit them directly. In every case, the decisive factor is what the authors call "fair process"--fairness in the way that a company makes and executes decisions. The elements of fair process are simple: Engage people in decisions that directly affect them, explain why decisions are made the way they are, and clarify what will be expected of them after the changes are made.

Obstacles to high performance can be as profoundly demotivating on the shop floor as they are on the battlefield. And for high performers, factors they can't control can hinder their best work and may drive them to look elsewhere. The ones who stay behind may be the ones who don't care.