Tuesday, September 2, 2014

Smaller Boards Get Bigger Returns

When Harrison Coerver and Mary Byers suggested (in Race for Relevance) that association boards shrink to five members, most in the association community exploded with a multitude of negative comments.

Not possible was the common cry.

The book reported that Harvard’s Richard Hackman (among others) said groups of six or seven are most effective at decision making.

Now comes reinforcing research for the concept of downsizing association and nonprofit boards:

In a recent story headlined Smaller Boards Get Bigger Returns. Companies With Fewer Directors Tend to Outperform Their Peers, New Study Shows, the Wall Street Journal shared two key points:
  • “Size counts, especially for boards of the biggest U.S. businesses.”
  • “Companies with fewer board members reap considerably greater rewards for their investors, according to a new study by governance researchers GMI Ratings prepared for The Wall Street Journal. Small boards at major corporations foster deeper debates and more nimble decision-making, directors, recruiters and researchers said.”
What do you think?

Are you moving your boards toward a more strategic and governable size?

No comments:

Post a Comment