... And a 'designated dissident'.

• Author: Whitworth, Ralph V.

Ed. Note: Ralph V. Whitworth is a founder, principal, and investment committee member of Relational Investors LLC, an investment fund specializing in strategic block investments. He has served on the boards of 11 public companies and is currently a director of Hewlett-Packard Co. He made the following observations in the article, "Dissidents, and Dissent, in the Boardroom" [Directors & Boards, Fourth Quarter 2004].

I have proposed that maybe all boards--even if they don't have a dissident should designate a "dissident--for the year." When someone comes to the board and asks the board to waive its ethics policy, this director would be responsible to say, "Wait a minute. Let's talk about this for a day instead of five minutes." When the CEO is under investigation for tax fraud and the board needs to decide whether that should be disclosed to shareholders, there is someone who says, "Okay, the general counsel recommends that we don't do that, but let's talk about it for a day." The idea is that a dissident is someone who is a bit of the devil's advocate.

Let me give you one example. After some negotiation, I went on a board of a large technology company. Our fund owned 10 percent of the company. The company had a lot of governance issues that it was facing. Shortly before I went on the board, the A company named the CFO as the new CEO. I think they wanted to get this appointment made and out of the way before I came on board.

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Before my first board meeting, we had, as often happens, a board dinner the...