ONE MORE TIME.  WHAT IS THE VALUE PROPOSITION FOR A

STRONG BOARD DOMINATED BY OUTSIDERS?

Put the legal requirements for a Board to one side for a moment.  Put Sarbanes Oxley to one side for a moment.

From a business perspective, why do you need competent Boards dominated by strong outsiders?

The argument goes like this:

    1.  Good CEOs are champions. Champions are bred to have hubris.  If they did not have believe in themselves, they would not be aggressive CEOs.

    2.  In the absence of a strong counterveiling force, some CEO Champtions will rigidily hold on to a once successful business model that ought to be thrown away.  In the absence of a strong counterveiling force, some CEO Champions will foolishly rush into M&A activities that defy both logic and statistical probability.

    3.  This strong counterviling force is called the Board of Directors.

For a summary of a Stanford University study that supports this perspective, please click HERE.