Apart from being quite amusing, this interview with the satirical co-author John Gillespie of “Money for Nothing: How the Failure of Corporate Boards is Ruining American Business and Costing Us Trillions” opened my eyes to a major problem in business and the irony that huge, successful companies are still using the inefficient, controversial, and often un-businesslike corporate model which includes advisory boards.
Also referred to as a “board of directors”, the corporate board is an assembly of elected or appointed individuals who oversee the activities of a specific company or organization. In for-profit companies, this board is responsible to the stakeholders, reviewing the broad policies of the company in order to ensure that it operates in the stakeholders’ best interest. The board is also responsible for appointing a chief executive (CEO) whom they believe will best run the company and adhere to its guiding principles.
In their book, John Gillespie and David Zweig slam the corporate board, portraying it as a farce. The fact that boards often include irresponsible individuals with no background in business displays an odd inconsistency in companies that built their fortunes and status on efficiency, commitment and hard-work. Organizational structures are in place to clarify responsibilities, provide a pathway for communication and ultimately maximize efficiency and productivity. The board of directors is thus an ironic component to the organizational structure as this group of top individuals that oversee all corporate activities are often the most unprofessional.
However, when one considers the bigger picture, as Gillespie points out, its not actually that ironic. The board of directors is often appointed by the company CEO, who in turn is kept in office by the board of directors. See the pictures becoming clearer? These CEOs staff their boards with supporters in order to guarantee the continuance of their power and salary.
This structure is in obvious need of an overhaul.
