Boards Aren’t the Right Way to Monitor Companies

One of the barriers that we identify and discuss at the director level is outside job demands. Consider that many directors who sit on boards hold senior management positions at other firms, and some sit on the boards of multiple companies. For example, Marijn Dekkers, who served as the CEO of Bayer, is also the chair of Unilever, an independent director on GE’s board, president of the German Chemical Industry Association, and vice president of the Federation of German Industry. Many directors have similarly demanding positions at firms other than the one they serve as a director. Given the large demands placed on these individuals, how do they have enough time to vigilantly protect shareholder interests?