Corporate > AG Deal Diary > If You Want Something Done Right, Ask a Busy Person
29 Aug '13

The effectiveness of a member of a board of directors should not be measured, directly or indirectly, on the basis of the number of boards on which one sits.  Who among us does not recognize that having too much time on one’s hands is just that?  For most of us, the busier we are, the better we are.
 
And yet, shareholder advisory services, the SEC, and the NYSE and NASDAQ listing rules all deem or imply that there is a set number of assignments that a director may take before the law of diminishing returns kicks in.  Do these regulators also require seven to eight hours of sleep, three healthy meals and two snacks a day and at least 30 minutes of exercise four times a week? No.

Paternalistic rules that limit the number of board seats per person do not make boards better.  I have witnessed professional directors who sit on 10 or more boards at a time and are fully prepared and knowledgeable regarding the company, the industry and overall macro trends, and still provide clear, concise and additive oversight. I have also seen one-board participants who strive to stay awake or are otherwise distracted.
 
Efficiency and time management should be embraced, not discouraged.  Perhaps a board member’s aptitude is better measured by the outside world via a personality test… or even his or her horoscope.  The numbers of boards is not a relevant or useful tool.