Are Some Bank Directors Spread Too Thin?

In an ideal world a board member should devote ample time and attention to his or her company’s operations, with few outside distractions. That’s not always the case. Though institutional investors and proxy-advisory firms strongly advise public companies to discourage directors from sitting on too many boards simultaneously, companies often court the same business veterans and VIPs who find the fees and prestige attractive. The issue, which some corporate-governance experts call “overboarding,” permeates corporate America, including the banking sector. Citigroup, Wells Fargo and the $7.8 billion-asset FCB Financial Holdings in Weston, Fla., each have a sizable number of over boarders. Many directors “are, by and large, very smart and capable people,” said Ric Marshall, executive director of environmental, social and governance research at MSCI in Portland, Maine. “But how much can you do? Some are spreading themselves too thin.”