The board as a portfolio: the right skill mix as a more essential component of board composition, and other predictions about the future of the boards.

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

The right skill mix as a more essential component of board composition, and other predictions about the future of boards.

THE PAST TWO DECADES have witnessed a revolution in the boardroom of the typical large American corporation. Boards today are more independent, more diverse, more subject to scrutiny and criticism, and more exposed to legal liability than ever before. The legal, social, and economic trends that fueled this revolution have not abated. To the contrary, these trends are gaining strength and are likely to assert even more profound influence on future boards than they have in the past.

Prediction, as we all know, is a dangerous art. Predicting the future of the American corporate board is particularly hazardous because a plethora of economic and legal forces can easily conspire to make even the most sober forecast -- when later viewed with the benefit of 20/20 hindsight -- seem a bit naive or foolish. Nonetheless, on the occasion of this anniversary volume, I am willing to venture way out on a limb to offer nine predictions about the future of the American board. I offer no value judgments as to whether these predictions suggest that we will be living in a better or worse world. Readers will, I suspect, be able to form their own judgments.

1. Boards Will Be Younger. This is an easy prediction because it's hard to imagine boards getting much older. The "youth movement" will be a side effect of the increasing importance of technology. Even companies that are not widely perceived as "high technology" firms depend critically on the successful application of technology for their survival. Ask Federal Express about the importance of computerized systems to their ability to deliver a simple package. Then multiply the implications from there across industries from automobiles to media. Modern technology is much more the domain of the young than the old. To put it mildly, the odds that a 40-year-old executive will understand something about the Internet and its implications are a good bit higher than the odds that a 60-year-old will have equivalent insight.

2. Boards Will Be More International. Just as technological mastery is becoming essential to corporate survival, the ability to produce and to market internationally is also becoming critical. A board that seeks to operate internationally when it is composed entirely of U.S. citizens who have had only minor opportunities to master foreign cultures and markets -- a fair...