Why director over-boarding matters

Although is no standard definition of over-boarding, this is becoming critical for two reasons. The first is that the board’s responsibilities are increasing. This has to do both with the increasing complexity of businesses, and directors are expected to focus on a wider set of issues -- digital transformation, cybersecurity threats, sustainability, and corporate social responsibility. And for directors on committees, particularly the audit committee, with its constantly burgeoning agenda, the time spent is only going up. And second, as mutual funds and other institutional investors step up on stewardship, governance risk becomes critical and, with it, the quality of the board, for which over-boarding is a central issue. This means that expectations regarding the maximum number of boards a director may sit on are set to change.

To read our blog ‘When less is more’, click here.