Click here to download a pdf - Director Magazine

BOARD COMPOSITION: KNOWLEDGE VS INDEPENDENCEvaluable board members if they make a real effort to understand the business andare sufficiently self-confident to question what the managers are doing.SIZE OF THE BOARDMost companies prefer their boards to have around 9 to 11 members; boards withmore than 15 directors are thought to be hard to manage.SIZE OF BOARDS IN 2010 (LARGEST 150 FTSE COMPANIES)8 or fewer 27%9-11 51%12-14 18%15 or more 4%Source: 2010 UK Board Index, Spencer StuartThere is less agreement on what the balance should be between executives andnon-executives. Some argue that the presence of line or functional executives inaddition to the chief executive and finance director is pointless since such peoplecan never challenge their boss. Others believe that a mixed board – say four orfive executives and six or seven outsiders – makes for a more cohesive group andgives the NEDs a better feel for the company’s operations.There may be a danger, if the latter course is followed, that the social bondsbetween insiders and outsiders will become too close, and the NEDs will find ithard to play an effective monitoring role. But in this, as in most other aspects ofboard effectiveness, the precise composition of the board – the number of femaledirectors, the presence or absence of people with a non-business background,even its size – is less important than the character and motivation of the peoplewho sit round the table, and the quality of leadership from the chairman.KEY ACTIONS FOR BOARD MEMBERS■ Regularly monitor the chairman/CEO relationship – is it working, do thetwo people fully understand each other’s role and responsibilities?■ Reflect on the character of board discussions – are the right issues being51