Intellectual diversity: put a premium on wide-ranging knowledge.

• Author: Hardiman, Joseph R.
• Position: Putting In Place the Right Board for the 21st Century

WALK THE HALL leading to the boardroom of any long-lived corporation and you will see the evolution of the company and its board told in pictures. Compare today's increasingly diverse board with the framed yellowed pictures of men in white shirts and bow ties, and one difference will be immediately obvious: few, if any, women, and no minorities.

That wrong is being made right. Unseen, however, is another coming change that is almost as profound and no less sweeping -- the new intellectual diversity of the American corporate board.

The old-fashioned corporate board was often a friendly group of industry professionals, mostly from within the company, sprinkled with several trusted service providers and a few retired politicians or diplomats to lend prestige. The new corporate board is increasingly an interdisciplinary body that debates and hammers out policies.

Where the board was once rooted in the tradition of a given industry, it is now externally focused on the complex, increasingly global environment in which that industry must compete. Like pilots, these new board members may not know how to make airplanes, but they must be experts in flying through all kinds of weather.

This is why the structure of many new company boards, froth small start-ups to Fortune 500s, are focusing on wide-ranging knowledge, experience, and judgment. This is no less true of the National Association of Securities Dealers (NASD), the securities industry's largest self-regulatory organization where an historical shift in corporate governance has recently taken place.

The 1990s has seen a record level of investor participation in our nation's stock markets. With this participation has come a desire for greater policy input on market structure and regulation. Acting on recommendations made by a Select Committee chaired by former U.S. Senator Warren Rudman of New Hampshire, the NASD embarked on assembling a true "knowledge board." In April 1996...