Peter Crow
  • Home
  • About
  • Musings
  • Research
  • Contact

On director effectiveness and "overboarding"

11/8/2013

0 Comments

 
How many directorships is it reasonable for any one director to hold at a given time? Recently, I met a gentleman at a function who introduced himself with the line, "I am a professional director, I sit on ten boards". Ten boards seems a lot. Is ten reasonable?

If we think what a commitment to ten boards looks like, the following picture emerges. If you assume that each board has a monthly meeting (of one day), and that directors spend one hour in preparation for each hour in the meeting, then a pool of ten boards means 20 days' effort each month. That's without allowing for committee meetings, crises, or any time to understand the company or the market within which it operates. This last factor (understanding the company and its markets) is crucial if a director expects to contribute to strategic discussions or assess proposals in any meaningful way.

On this analysis, directors with ten concurrent appointments are seriously "overboarded". They cannot hope to be effective. Think about it. You'd have enough trouble getting through the reading, let alone have time thinking, learning and assessing options. So, how many concurrent board appointments is reasonable? Experts suggest that a reasonable upper limit is four boards. Chairmen, with their heavier workloads, should limit themselves to three or possibly even two boards. 

While such reductions are likely to be contentious in some quarters, some serious benefits are likely. These include a larger pool of directors; a more diverse set of contributions; higher levels of engagement; and, crucially, better decisions (less groupthink). Overall, directors would have more time to govern well. The only downside I can see is the reaction from the very directors who wish to protect their positions and status. But that's probably a fight worth having, don't you think?
0 Comments



Leave a Reply.

    Search

    Musings

    Thoughts on corporate governance, strategy and the craft of board work; our place in the world; and, other things that catch my attention.

    Categories

    All
    Accountability
    Conferences
    Corporate Governance
    Decision Making
    Director Development
    Diversity
    Effectiveness
    Entrepreneur
    Ethics
    Family Business
    Governance
    Guest Post
    Language
    Leadership
    Management
    Performance
    Phd
    Readings
    Research
    Research Update
    Societal Wellbeing
    Speaking Engagements
    Strategy
    Sustainability
    Teaching
    Time Management
    Tough Questions
    Value Creation

    Archives

    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    December 2021
    November 2021
    July 2021
    June 2021
    March 2021
    February 2021
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    November 2019
    October 2019
    July 2019
    June 2019
    May 2019
    April 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    August 2018
    July 2018
    June 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012

Peter Crow PhD CMInstD

Company director | Board advisor
© COPYRIGHT 2001–23. TERMS OF USE & PRIVACY
Photos used under Creative Commons from ghfpii, BMiz, Michigan Municipal League (MML), Colby Stopa, MorboKat
  • Home
  • About
  • Musings
  • Research
  • Contact