The board as a team.

• Author: Reed, Stanley Foster
• Position: Evaluating the think-alike directors - Putting In Place the Right Board for the 21st Century

Notes on the founding of DIRECTORS & BOARDS. A prime target of the new journal: the think-alike board.

AT THE BEGINNING of the 20th Century, a French pharmacist-turned-hypnotist-turned-self-motivationist, Emile Coue by name, believed that people would be happier and more productive if they could get to know and like themselves. And he persuaded millions of the French citoyens to stand in front of a mirror and repeat over and over, "Tous les jours, a tous les points de vue, je vais de mieux en mieux."

Coueism was soon exported to America and soon millions of Americans were persuaded to gaze back at themselves in the mirror and repeat: "Every day, in every way, I am getting better and better."

Good directors must know themselves and know what they are good at before they can provide good advice and effective guidance to management. Both individually and as a board, they must look at themselves and ask if they really are getting better and better. The answer is often no. But why?

Because good corporate governance comes from the joint efforts of directors with known abilities formed into a group with complementary talents. It does not come from groups of people brought together because they enjoy each other's company.

I came to this opinion back in the 1960s serving on the boards of a number of companies where board membership was the result of shared experience either on the golf course, in college, or in social congress. We directors all looked alike, dressed alike, talked alike, and enjoyed each other's company. And one after another, the companies got into trouble. Serious trouble. How come?

Because the boards were created for social purposes, not business purposes. They lacked diversity. They were think-alike boards. There were never arguments. On one board on which I served for 10 years, no one ever interrupted another board member. Never!

One board was composed entirely of members of the Young President's Organization. Another of engineers who had each started his own high-tech company. Another of all MBA/management consultants. Another of all members (except me) of the founding family.

Were any of those boards a "team"? We thought we were. Were we effective? No! We were like a baseball team of all pitchers!

While I didn't know then as much about management as I know now, I knew that those boards were ineffective. So I founded DIRECTORS & BOARDS those 20 years ago to help stakeholders create effective boards. One of my targets was the...