Robert Pozen, Chairman of MFS Investment Management and a Senior Lecturer of Business Administration at Harvard Business School, published a post on the Harvard Law School Forum on Corporate Governance and Financial Regulation making the case for a new model for boards of complex global companies. In his piece, Pozen argues the merits of boards comprised of small groups of professional directors with enough relevant experience and sufficient time to hold management accountable. Though his post is aimed more directly at operating companies, it is relevant to all public companies.
Pozen argues that smaller boards made up of directors who view their board duties as their primary occupation and not a sideshow in their otherwise busy lives, make more effective decisions, and are able to apply relevant experience and commit more time to their oversight roles.
Mr. Pozen also bolsters his case by anticipating and answering potential critiques to his hypothesis, including:
- Professional directors with relevant experience are hard to find;
- Professional directors are too expensive;
- Professional directors will attract greater legal exposure because of their purported expertise;
- Boards of professional directors will be too involved, crossing from oversight into micromanagement.
The full text of Pozen's blog post is available at: http://blogs.law.harvard.edu/corpgov/2010/12/05/the-case-for-professional-boards/