Randomly Noted

You mae an excellent point that Board members need relevant experience and need to understand the business and the industry. There were (and still are) Board members in Financial Institutions who were (or are) CEO’s of Entertainment companies and I doubt they had any clue about the complex financial instruments and the risks the institutions were taking. In the end the shareholders suffered becuase they elected these board members.

I completely agree with this article. Some of these guys let their ego get the best of them, thinking nothing can stand in their way and there is nothing they can’t accomplish. To the detriment of both companies, the one which hires the CEO and the one which hires him as a board member, he cannot do both things to the best of his ability.

On the other hand, I understand it is extremely beneficial to have someone of that background of your board, helping oversight of the company and having insightful thoughts and ideas.

But I feel that a former CEO would be able to give a greater effort and both parties would benefit greater.

What board do you sit on? It makes perfect sense for CEO’s to sit on the boards of similar companies. It is not an accident that they are the CEO of a successful company. They are asked to be a board member to bring that talent to other companies. If I’m looking for a new director, I would look first at successful CEO’s with winning strategies and strong vision and the willpower to make the vision a reality. Apple took advantage of the talent of Dr. Scmidt for as long as they could, and now its time to part ways. That does not mean that the last three years were a waste of time, or that some evil has now been narrowly averted. Its business, and good business is results driven, and Apple and Google have had outstanding results the last 3 years. I’d say it was a mutually beneficial partnership.

i respectfully disagree with Neal Lipschultz on his point that currently serving CEOs should not serve on any Boards.

As a recruiter of Directors for over 20 years, (and former Director of a public company) i believe that the Apple/Google situation is simply an “outlier” and should not be greeted by such a radical notion as advanced by Mr. Lipschultz.

Historically, current CEOs have made the best directors due to their broad understanding of strategy, finance, and global markets. Current CEOs have also rightfully argued that they have become better CEOs of their own Companies by being exposed to other Boards and their strategies and management practices.

And, current CEOs are just that….CURRENT. We have witnessed a dramatic decline in the number of active CEOs in Boardrooms over the past 5 years at the same time that governance experts are arguing for more directors who have the skill sets that can only be gained by running a public Company.

Let’s not shoot mice with AK47′s.

Dennis Carey, Senior Partner, Korn Ferry

While in agreement that obvious conflicts of interest must be avoided, i find such a fundamentalist approach to barring CEOs from being outside board members excessive.

As a generality it would be preferable to avoid wrriting yet more rules. Rather increase the information available to shareholders (and hence competitors) and also make shareholders stand up to their ownership responsibilities.

What nonsense! Total crapola! A CEO needs to be able to lead, build a strong team, and be able to multi-task. That in no way precludes them from serving on someone else’s board. If they are a truly great leader, they can do more than one thing at a time! Who better to sit on a board than another strong CEO – thus able to make valuable contributions, as well as learn from others so that the experience also serves to enhance his own company.

[...] of Apple’s board? I read an interesting post yesterday by Neal Lipschutz on Dow Jones’ Random Notes blog arguing that Apple’s board has a fundamental problem: It has too many current [...]

[...] of the rest of Apple’s board? I read an interesting post yesterday by Neal Lipschutz on Dow Jones’ Random Notes blog arguing that Apple’s board has a fundamental problem: It has too many current [...]