In August, the Stanford School of Business released a survey with executive search firm Heidrick & Struggles on the effectiveness of active CEOS serving on outside boards of directors. The study touts strong evidence that CEOs are not better qualified than other board members and that CEO personalities can get in the way of board activities. But, don’t take all of the findings for face value.
The survey results were as follows:
- 87 percent said active CEOs are too busy with their own companies to serve as directors
- 33 percent said active CEOs are “too bossy/used to having their own way”
- 79 percent that active CEOs are not more qualified for board positions than other members
Though these numbers seem strongly conclusive on the subject, the composition of the study shows how these results are skewed. Of the respondents, only 15 percent are current CEOs. That leaves 85 percent of respondents as non-CEO board members. It does not seem likely that a non-CEO board member is going to describe himself as less-qualified as a CEO board member. In fact, the survey says that 77 percent of respondents think that strategic expertise makes CEOs attractive candidates for board positions; and 74 percent think operational expertise makes CEOs attractive for board positions. These are very strong numbers that aren’t listed in the survey recap.
And, some of the negative questions are more leading than the positive questions. When asking what makes CEOs attractive candidates, the potential answers are: strategic expertise, risk management expertise, operational expertise, experience responding to crisis or failure, leadership qualities, extensive personal and/or professional networks.
When asking what makes CEOs unattractive candidates, however, the answer choices contain a more negative bias: too busy with their company to be effective directors, too interested in networking/promoting their own company to be effective directors, too bossy/used to having their own way, not good collaborators.
So, although the numbers seem strongly against CEO board membership, the study needs to be taken with a grain of salt. Board positions are highly sought after, and CEOs have highly sought after experience!