The building of a board.

• Author: Housen, Charles
• Position: Finding directors and creating the structure for a corporate board - Reprint from Directors & Boards, Fall 1984 - Putting In Place the Right Board for the 21st Century

I SERVED on several outside boards and have found being an outside director was good for my ego -- but rather perfunctory. I haven't been required to do much and, as a consequence, have had trouble having an impact. As a result of this experience, when it came time for me to face the decision of whether to create a board of outside directors for my private manufacturing company, I knew I had better acknowledge whether I truly needed one.

There are certain breakthrough thresholds, and for me $100 million was it. The company was getting to the point where I couldn't control it totally myself. I needed help. My thoughts began to turn toward having a board of directors.

In addition to the growing size of the company, there were two other important considerations that forced me to realize I needed a board. The first was a need for objectivity. I needed someone to exchange ideas with, someone with no ax to grind who would help me direct the company forward. The second consideration was a need for continuity. For many people, and I was among them, when you hit the age of 50 something clicks. On my 50th birthday I said to my wife, "You know, I've finally reached middle age." And she said, "Who are you kidding? Who do you know that's 100?" You start to realize you're not immortal, that something could happen to you. A board of directors provides the possibility of continuity.

In light of my own experience serving on outside boards, I wanted a board that was really going to help me, so I designed a position that I call "director/consultant." For potential candidates, I initially thought about enlisting some fellow members of the Young Presidents Organization, in which I was actively involved. But these executives know me too well. I feared they wouldn't have the objectivity or be as constructive as they might be. For this same reason I didn't want any friends on the board, or other people who knew me, like my lawyer or accountant. My feeling was that a board should look at you as a chief executive officer and not as the guy they're playing tennis with on Monday.

I set three conditions: I insisted that the candidates not know me, that I not know them, and that they be active executives working in their companies at senior management levels. My senior vice presidents also interviewed the candidates, because I wanted them to pick directors who they would be willing to work with. I felt this was very important for my board to be successful, not so much...