Cast of characters: have special expertise? The spotlight may not be for you.

AuthorKaback, Hoffer
PositionQUIDDITIES

WHAT IS IDEAL board composition? To use theatrical metaphors: How many characters should the playwright create and with what attributes? What actors should be cast? Should an accomplished actor accept a role in this play?

From the viewpoint of the executive search fraternity, the "gold standard" for a director prospect was and is that he be a serving (or recently retired) CEO. The desire for such worthies has, however, bumped up against the twin realities that 1) boards today are telling, not asking, their CEOs to limit outside directorships, and 2) the putative prospects are themselves warier of the potential for financial and/or reputational liability and are less eager to be on outside boards.

A broad template of the mix of characters to be written and cast for many boards would look something like this: As many CEOs (active or retired), CFOs, and heads of operating units of large companies as possible, especially those with international operating experience, and with a premium on those knowledgeable about the company's industry. Leaven these with, say, a retired partner of a major accounting firm, a retired (better, active) partner of a big investment banking firm, and a current SVP-marketing of a large company in a related industry. Secondarily, consider a B-school professor or maybe an economist. Depending on the company's line of business, seriously consider, too, an ex-senator and an ex-U.S. ambassador to a country where the company does business

Writing in this journal 10 years ago, T.J. Rodgers, CEO of Cypress Semiconductor, disdained such casting. He maintained instead that a Cypress director needed to have experience as CEO of a technology company, expertise regarding semiconductors, or management experience in a company that buys semiconductors ("A Letter to a Shareholder," Summer 1996).

Many would reject Rodgers' rejection. Consider the theme of my column "Putting the Dalai Lama on the Audit Committee" (Spring 1999), which contrasted audit committee service, for which heavy-duty technical sophistication should be required, with service on the board in general: "To be a good director of an oil or toy company, you need not be a petroleum engineer or a toy designer or marketer." Rodgers' approach is too exclusive.

Filling board seats with those who supply knowledge and experience in discrete areas would seem to have substantial surface appeal. If on the board are an investment banker, a marketing whiz, a manufacturing efficiency...

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