Why I founded directors & boards.

• Author: Reed, Stanley Foster
• Position: ROAD TO XL * KEYNOTE

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...