The Economics Of Boards Of Directors

April 7, 2014 in Daily Bulletin

Those who sit on a company’s board of directors are expected to provide guidance about big strategic questions. Jason Karaian took a look at some of the studies done on effective boards:

  • Being a non-executive director is a nice job. For about $250,000 all you have to do is attend eight meetings a year – although you are responsible for a lot of the company’s steps (and missteps.)
  • The average board of directors has nine individuals on it.
  • The companies that perform the best generally replace a director, on average, once a year.
  • This means that an individual sitting on the board should stick around for about nine years and then move on.
  • According to one study 35% of board members feel that one of their colleagues should be booted from the board.

Read more about the board of directors, what it does, how it should effectively be managed, and find links to the studies here.

Source: Quartz