Strengthening the "PRO" in PROFESSIONAL DIRECTOR: Board service as a profession versus professional board service.

• Author: Minow, Nell
• Position: Reimagining the Board

Lord Boothby, a former Tory member of Parliament, described his experience as a corporate director to TIME magazine in 1962:"No effort of any kind is called for. You go to a meeting once a month, in a car supplied by the company. You look grave and sage. If you have five of them, it is total heaven, like having a permanent hot bath."

While much has changed, Boothby's description still feels apt in the minds of frustrated investors, especially as it applies to professional directors, who make serving on boards their primary obligation. Perhaps the stereotype is someone like Gerald Ford, who served on eight boards (five of which he also worked for as a paid consultant) following his presidency; professional directors tend to be retired CEOs or former high-ranking government officials. The Washington Post once reported that former Secretary of Defense Frank Carlucci averaged a board meeting a day, attending one by phone from his doctor's office. He served on more than 30 public and private and nonprofit boards but insisted that only half of them required serious attention, an assurance unlikely to give investors much comfort. The days of the 10-company director ended following the Enron and financial meltdown era reforms, but there are still people who make board service their primary professional commitment.

I generally assume that the minimum time commitment for board service is two to three days of research about trends and transactions and study of the company's strategy, audit, executive compensation, succession plans, investor relations, operational issues and risk management (including ESG) for every day of board or committee meetings. In the event of an emergency, that can quickly expand to full time. Best practice these days for a director without any full-time outside commitment is to sit on no more than three boards, five at the most, according to experts including a Diligent Insights report.

On one hand, those who support the idea of professional directors argue that these board members have the time to devote to their service, without the distractions of a full-time job, plus fewer conflicts of interest due to business connections.

On the other hand, those who think of professional directors more in the Lord Boothby image will reply that professional directors are not sufficiently involved in the day-to-day developments of the business world and that having no other income makes them reluctant to challenge management and risk...