Once upon a time, serving as a corporate board director was a prestigious thing. Today, thanks to the intense burdens of monitoring and governance we’ve piled onto boards generally and independent directors specifically, board service is more like a pain in the backside. And now some clever academics have tried to quantify precisely how much that pain costs corporate operations.
Their paper, “The Cost of Intense Board Meetings,” explores the proper balance of boards’ two primary duties: monitoring corporate behavior, and providing strategic advice. As a whole, boards must find the right mixture of monitoring and advising—but our governance revolution of the last decade has focused almost entirely on the monitoring. That, in turn, has put too much pressure on boards’ monitoring committees (audit, compensation, and nominating and governance) and the independent directors now required to serve on those panels.
