Peter Crow
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Outsource the board? I don't think so.

5/9/2014

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The contentious topic of board performance seems to be getting more and more attention in the popular press. The attention is great, because boards are responsible for company performance, in accordance with the wishes of owners, and they need to be held accountable. However, not all of the discussion is helpful. For example, this provocative article appeared in the Economist recently. While the article was well-written, the proposal it contained—to outsource the board—was irksome. I remember tweeting about it at the time.

The board is a proxy for absentee owners, to represent their interests. Why any owner (shareholder) would allow a board to (re)outsource what is, in effect, an arrangement that is already outsourced is beyond me. If the board is not delivering the results the owners want it should be replaced, not outsourced. Thankfully, an influential commentator has provided this rejoinder to Schumpter's article, and in so doing reintroduced some much needed balance and a modicum of sensibility.

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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
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