The feat of the master: it's time the job of director demanded a formal education

Chief Executive, The, Jan-Feb, 2004 by Joe Queenan

Several years ago, Alan Ehrenhalt wrote a fine book called The United States of Ambition. In it, he argued that congressmen, as opposed to senators, work extremely hard at their jobs, in part because the pay is so good. Most members of the House come from regions of the country where a representative's salary is a hefty chunk of change, more than they could earn in most other lines of work. Given this powerful economic incentive, congressmen labor to stay in office and generally do a good job serving their constituencies.

It seems to me the time has come when the position of director on a corporate board should be a professional occupation. That is, enterprising universities should begin to offer a master's program for board directorship to train dedicated young people for a career of serving on corporate boards. As presently constituted, many boards are stocked with former politicians, aging golf buddies and retired executives whose time has come and gone. In recent days, boards have been accused of everything from excessive chumminess to incompetence to outright collusion with unethical senior executives. Board members have been targeted in shareholder lawsuits alleging that they failed to take up the cudgels to prevent unscrupulous CEOs from pillaging their companies.

All these problems could be eliminated if at least some of the board members were "professionals" whose advisory services constituted their sole source of income. They would be accredited; they would be licensed; their activities would be monitored by a professional review committee; they would be required to adhere to a strict code of ethics. They would devote their entire lives to serving on boards where their input would be valued, their honesty unchallenged, their ability to avoid compromising professional situations unparalleled. Naturally, they would be paid a lot of money.

Purists, fussbudgets and naysayers may object that the whole point of being a board member is to be an old salt who has sailed the high seas of finance and has loads of experience. But this is only partially true. Celebrity directors--and this would include many if not most politicians--often have little intimate knowledge of the industries they become involved with. Many directors are yes-men and rubber-stamp guys. Some are outright clowns. By contrast, a professional director would be required to major in a particular field--pharmaceuticals, aeronautics, entertainment and so on--and would spend his entire career laboring in that segment. These directors would be aggressive in sorting out suspected corporate malfeasance and would not pull any punches when debating issues affecting the future of the commercial enterprise. Serving as an independent director would be the only horse they had in the race. They would be beholden to no one.

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Obviously, a freshly minted Master of Board Directorship would not immediately join a Fortune 500 board. Like rookie football players, the neophyte would be brought along slowly, first serving on the board of some marginal enterprise listed in the pink sheets. After a period of seasoning, he would move up to a small company listed on Nasdaq. In due course, after years as an adviser and watchdog, he would be ready to move up to one of the major corporations.

Because the Master of Board Directorship would have no direct experience as a senior executive, he would have to acquire his battle scars vicariously. Most of the knowledge could be obtained by studying vast databases containing advice from famous captains of industry. The rest he could learn by donning a virtual reality helmet that would insert him into a parallel universe of corporate intrigue. What the Master of Board Directorship lacks in direct experience he would more than make up for with his unassailable ethical excellence and refusal to be swayed by personal friendships. He would be paid not simply to be a director, but to be an active director. That would be a first at some companies.

This proposal may be an unusual one. But something drastic is needed to allay the public's suspicion that some boards are asleep at the wheel. A Master of Board Directorship would be a boon to the economy, a boon to universities and a boon to society in general. In the wake of recent corporate disasters, this great nation could do with a good boon.