The Board Book.

• Author: Currie, Edward H.
• Position: Brief Article - Review

Published by AMACOM, New York, 320 pages, $35.00

SUSAN SHULTZ has undertaken a noble task in attempting to set down some of the more important considerations in creating, maintaining, or otherwise dealing with corporate boards. Her book is filled with a great deal of interesting anecdotal information on the importance of boards, who needs a board and why, statutory versus advisory boards, strategic recruiting, common mistakes in director selection, compensation, leadership issues, and director liability. Indeed, the appendix contains an important list of actions that require board approval -- a significant issue often overlooked and unappreciated by small and mid-sized corporations with strong CEOs.

In one of the most important chapters, "Information Flow," the author, who is president of an executive recruiting firm, emphasizes the importance of educating directors in order to keep them involved and informed on all aspects of a corporation's activities and challenges. This is important for all corporations and generally not fully appreciated by entrepreneurial CEOs. Consider that directors are often involved with multiple business ventures and interests outside the boardroom, and meet periodically, or in some cases aperiodically, to be updated on corporate matters.

Shultz emphasizes the importance of fully orchestrating board meetings by careful pre-meeting planning and presenting a well thought-out agenda. She underscores the importance of avoiding boardroom surprises such as learning about the loss of a major customer at a board meeting, sudden management changes, cash flow shortfalls, etc. However, some of her points are questionable -- i.e., scheduling board meetings a year in advance, holding unstructured meetings, sending directors out in company uniforms to interview customers, exposing directors to corporate investors and/or analysts. Such actions, if ever taken, must be carefully considered before invocation.

Which brings us to the central flaw in her treatise: the book suffers from the same malady that most management and corporate advice books suffer from. It offers a non-rigorous attempt to extract general theorems from specific, often anecdotal, examples and observations. For example, she advocates a number of board of director policies exemplified by practices at Bethlehem Steel, Pepsi Bottling, Bank of America, McDonald's, Firestone, Delta Airlines, Fluor, and Motorola. But she never explains how you scale such practices to...