Not all directors are created equal: some deserve to be called great. Some are appallingly not so great ... and may act like bull elephants in rut.

• Author: Hindery, Leo, Jr.
• Position: IT (STILL

THERE ARE, of course, "great" directors (sadly, too few) and "not-so-great" directors (sadly, too many). There are even directors who are so rogue that they make clueless ones look preferable.

Those not-so-great directors are too often individuals either personally beholden to the CEOs or who have retired from their own careers and love the ongoing benefits and recognition. Whatever their motivations or justifications for sitting at the table, such directors can, as the evidence shows, often be appallingly uninformed about the businesses of the corporations they serve.

So, who are some great directors? Easily said, it is almost anyone who sits currently or who has ever sat on the General Electric board and, in recent years, on the Ford Motor Co. board. By contrast, you can suggest that all of the directors of WorldCom and Enron and, more recently, most of the directors of Yahoo and Hewlett-Packard were or are not-so-great directors. (See my column "It's Now Especially All About People," Fourth Quarter 2011, for further comments on the H-P board.)

As for WorldCom, almost all of its outside directors were individuals who had headed the companies that WorldCom had purchased. These individuals weren't particularly broadly experienced business people and they were all indebted to CEO Bernie Ebbers, who'd made them rich. So when Ebbers engaged in a series of accounting tricks to simulate a healthy WorldCom after the company's dazzling (driven by acquisitions) reve-nue growth finally hit the wall, the board was in no position to act responsibly.

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GE's governance principles, in the sharpest possible contrast, require that: a majority of directors be "independent"; committees circulate notes of their meetings to the full board as soon as they're available; nonemployee directors have, each year, at least three regularly scheduled meetings and make two regularly scheduled visits to GE businesses without management present; and the board establishes its own agenda.

Often on less stringent boards than GE's, and even on some of the most prominent ones in the country, there can be, as noted above, directors who act like bull elephants in rut. These individuals are so demanding and uninformed that they either forestall sound strategic initiatives or they endeavor to advance an ill-advised initiative that distracts the company from achieving the best possible long-term results for its shareholders.

Major case in point: In March 1999...