In the scramble to design a new regulatory architecture, more should be said about reforming the requirements for corporate boards. No matter how sophisticated the new regulatory regime is, creative minds and egos will find ways round it. Boards with teeth are the final rampart against managerial folly and egos that run amok.

Looking at what has happened to the world’s largest financial institutions, two differences distinguish the boards of the better performers: a significant number of board members with industry expertise, or a governance structure, that prevented the emergence of an entrenched, dominant CEO or chairperson.