Wanted: Board Members

So, do you think you’d have to be crazy to respond to the classified ad on this page, or what? Does the risk/reward ratio of the job make you suspect that it’s not worth doing?

Does the ad bring to mind recent television images of high-profile executives being led out of a courthouse in handcuffs? Perhaps it reminds you of recent headlines about those executives paying millions in fines out of their personal funds? Do you think maybe this is why more and more experienced executives are deciding to sit on the sidelines and opt out of board service?

There seems little doubt that a litigious environment and stricter regulation under the Sarbanes-Oxley Act are scaring people away from serving as corporate directors—just at a time when the role of the board of directors is more important than ever before.

The concept of directors—rather than executive management—serving as trustees for shareholders and other stakeholders is the foundation of the American free-enterprise system. Way back in 1932, Adolf A. Berle and Gardiner C. Means wrote "The Modern Corporation and Private Property," in which they observed that dispersion of equity ownership separated ownership from control. So, it’s not exactly a new idea.

What’s changed is the nature of the job. Serving on the board of directors in those days, and until recently, was mostly a social engagement. The CEO or board chairman invited a few golf and drinking buddies to serve as board members and give a bit of casual advice at quarterly meetings. That changed, as shareholders became more assertive in the 1970s, and even more so in the ’80s. The Sarbanes-Oxley Act of 2002 has taken scrutiny of corporate governance to a whole new level.

Governance is not something to be taken lightly at all; it is a grave responsibility with serious consequences for uninformed or reckless decisions. (Oops, there I go again, reminding you of that risk/reward thing.) That’s exactly why I’m urging the experienced "gray hairs" like myself out there to step up to the plate. Businesses in our communities need our guidance and wisdom more than ever before, and it concerns me that the quality of boards of directors may diminish or erode if we can’t attract the cream of the crop to sit around the table with us.