The issue of director overboarding didn't arouse much interest until the financial crisis in 2008. It was a pivotal event that threw the entire corporate marketplace into an unprecedented tailspin. In the quest to figure out, ''How did we get here?'' virtually every issue came under scrutiny. In reevaluating the role of board directors, the issue of board director failure in the basic duty of oversight became a glaring question with few reasonable answers. Not surprisingly, some of the blame pointed to the lack of time and attention that board directors gave to their board seats. Once the issue was out in the open, it begged even more questions. Were corporations stretching board directors too thinly? Were the demands of work and home too much with their board commitments? Were they sitting on too many boards? How many are too many? How much time were board directors spending in board meetings? How much time were they spending on board business outside of board meetings? Was attentiveness a factor? If so, how can it be measured? Even once all those questions were answered, it generated new questions. Should the industry place a limit on how many boards a director should serve on? What is the number now and what should it be for optimal board attention? Is that question better left to the individual companies? Would putting a number on it be a help or a hindrance? Various organizations have given the issue of what they believe to be due diligence from their own perspectives in an attempt to influence a responsible redirection of governance. With all the opinions floating around and a few organizations taking a stronger stance on the matter, we currently have no firm regulations that speak to the issue of overboarding. In essence, we only have an unwritten expectation that boards will adopt policies that set forth reasonable board director commitments, along with some slight external pressure urging them not to press the issue too far. Perhaps what the industry hasn't considered closely enough is how we can utilize technology to create a well-informed picture of what board effectiveness and efficiency could look like if we could handpick every aspect of a board's needs to compose the most highly qualified board possible. What would board directorships look like if we could view what each individual board director could contribute to the board as far as time, talent, experience and expertise - and what the constellation of time, talent, experience and expertise of any combination of board directors would look like as a whole? Modern boards no longer have to overthink director overboarding. Board's should always be thinking about board composition and consider not only the talents and expertise that a board director brings to the boardroom, but also the impact of their other commitments, independence, network and previous track record.

The Industry's Influence on Director Overboarding

Where there aren't laws and regulations, there are other ways to exert pressure to enact change. The financial industry has offered up some action to curtail instances of blatant director overboarding. Asset manager Vanguard, has taken a firm position on the issue of director overboarding by setting a limit of four directorships in their proxy voting guidelines for board directors and a limit of one outside board directorship for a CEO. ISS advises against board directors who serve on more than five public company boards and more than two outside public boards for a CEO. Glass Lewis advises against executive officers who sit on more than two outside public company boards and non-executive board directors who sit on more than five public company boards. Glass Lewis permits TSX-V directors to serve on up to nine boards, and they make exceptions to the rule on a case-by-case basis. Blackrock and the U.K.'s Legal & General Investment Management (LGIM) consider voting against committee members and/or independent board directors who serve on an excess number of boards. The Business Roundtable released the Commonsense Principles of Corporate Governance 2.0 doesn't offer up a particular number of simultaneous board positions, favoring to emphasize director attentiveness - but that's more difficult to measure. They note that board directors with time constraints add some level of value to their boards.

Can We Put a Number on Board Director Service Hours?

Despite these actions, there has been no significant change in best practices for director overboarding. Overall, investors have preferred that companies set their own requirements for board service. In past years, board directors have spent an average of 210 hours in board service, according to the National Association of Corporate Directors (NACD). Since the 2008 financial crisis, board directors have increased their board service hours to 250 per year, with an average of 290 hours for the board chair.

What Is the Board Director Perspective on Overboarding?

Lois Scott, a board director for MBIA, the Chicago Stock Exchange, the Federal Home Loan Bank of Chicago and several nonprofit boards, is not alone in thinking that it's beneficial to companies when board directors sit on several boards. Scott acknowledges that her work on one board helps to inform her work on other boards. Other board directors have found and respect their own limitations on board service. Victor Arias is the senior client partner for Korn Ferry's CEO and Board Services practice and the global leader of diversity and inclusion. Arias believes that one board is all some board directors can and should handle - and that some talented, well-organized individuals may be able to manage four or five boards effectively. Cynthia Jamison is a seasoned board director of over 15 years. She recently joined the board of Darden Restaurants. Jamison now considers herself a full-time working board member and believes that four boards are a good number if that's what you do as a career. She also notes that more than two boards along with a full-time job is difficult to manage well. While the number of board service hours has increased, the pay has remained relatively the same at about $100,000 per year on the average, according to Korn Ferry. This suggests that money isn't necessarily a motivating factor.

Diligent Nominations Tool Is the Solution to Overthinking Director Overboarding

Now boards can pursue effective succession planning with the digital tool called Nominations, Diligent Corporation's solution to meaningful board composition that puts an end to the worry of overboarding forever. The issue of overboarding, along with issues like diversity and composition, can be a thing of the past when nomination and governance committees take advantage of technology that gives them access to data and analytics that lead to more effective board recruitment. The tool is a great way to evaluate your current board's matrix of strengths and weaknesses and direct you to leads to fill the gaps. Diligent Nominations gives succession planning committees access to information about board director candidates from over 5,500 companies across 24 global markets and 40 indexes. A simple search analyzes director interlocks by individual or by company and highlights overlapping directorships, seats on competing boards and seats on Financial Action Task Force (FATF)-listed companies. Diligent's Nomination & Governance application puts your board's recruitment efforts in the driver's seat. It gives you instant insight into your board's composition and benchmarks your board's composition and effectiveness against competitors as you search for executive and board director candidates. Get the inside scoop, including a detailed breakdown of contributing factors like gender, age, diversity, director interlocks and the controversial issue of overboarding. Your succession planning committee will save time with a shortcut to reaching illusive C-level executives. Explore over 125,000 biographies in detail and narrow down your search with granular filter options that include experience, demographics, region, sector and discipline. It's the modern way to access the largest-growing global governance data set to keep you updated with opportunities while reducing governance risks. Diligent Corporation knows the importance of having the right technology infrastructure in the boardroom and how it empowers boards with the necessary framework to meet governance challenges forthrightly. Modern governance is the practice of empowering leaders with technology, insights and processes to fuel good governance that organizations require to thrive and endure in today's fast-paced world. Innovative organizations will stay ahead by having the right information and data to help them identify risks, act on prime opportunities, and quickly turn knowledge into informative decisions. It's this kind of forward-thinking that made Diligent the market leader in modern governance. Diligent took the lead in security for board management governance software products. They continue to be backed by the world's leading security standards, with secure data centers located within your region or country. The Nominations tool factors adoptability and functionality and makes products that are available across every device and operating system. The programs are intuitive and easy to use. They're backed by one-to-one training sessions and 24/7/365 customer service to ensure that your board is fully prepared to operate at maximum efficiency. All products fully integrate under Governance Cloud, a highly secure electronic platform. The Diligent Nomination & Governance application is the most precise way to compose a board that's as focused and attentive as it is diverse. Concerns about overboarding could soon become a thing of the past.