I’m
assuming the reader is running a small or medium size business, but
the following advice can apply to the biggest companies.
Many
corporations are guilty of using friends, relations and acquaintances
to fill open spots on the board. But ability is strongly needed.
The
board of directors has the actual legal responsibility for the proper
function of the corporation. Moreover, each director has joint and
several liability for any sins of omission or commission, in this
pursuit. That means he or she can be sued individually for neglect of
responsibility of the entire board, in the event of any board errors or
conceived fraud by board members. In other words, the board member with
the deepest pockets or most to lose may get the brunt of a lawsuit.
Do
you choose by race, by gender, or by culture? Definitely not, but these
days, societal pressure and anti-discrimination laws may, and do enter
into consideration. To the detriment of many corporations who still
discriminate by quotas despite laws on the books.
Most
important, business experience ought to be the number one requirement
for board membership. However, that too often gets short shrift. (See
the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at
twitter.)
Monday, February 11, 2013
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