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      • NEW REGULATORY PROVISIONS RELATED TO INDEPENDENT DIRECTORS
      • ESG & ITS IMPORTANCE FROM THE POINT OF VIEW OF BOARD MEETING
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How many Boards are too many?

How many Boards are too many?

By MMB ADMIN
Calendar

Oct 04 th 2022

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Once a director establishes himself on one board, certainly looking at the work done and experience gained, other companies will also approach him to serve their boards. This is definitely an overwhelming sight for new directors aiming to serve multiple boards however, does that director know that how many boards should he consider? Is saying a yes to all the opportunities a good idea or a balanced decision keeping in view the capacity should be taken?

These are some important grounds that one must assess before saying a blind yes to the offers. Of course, the decision will depend upon the personal and professional considerations of directors. Yet, assessing the amount of time to be dedicated to each board and other such factors is must.

Section 165(1) of the Companies Act, 2013 states that a person can hold the office of director simultaneously in 20 companies. The number of 20 companies includes the office of alternate directorship. However, the maximum number of public companies in which a person can be a director simultaneously is 10. But still the question remains the same – how many boards are too many? And how many boards should a person actually consider?

Experts say that one of the important issues that time constraints cause is the inability for over boarded directors to squeeze in last-minute emergency board meetings. Any number of things could surface that would justify scheduling an emergency meeting, like enterprise risk management or increasing shareholder engagement activities etc. Overall, over boarding puts undue constraints on board directors' time. The result of directors spreading themselves too thin is that they can't give adequate time to the board or discharge their duties properly.

Let us understand the two most important factors that shall affect the decision of directors while choosing appropriate boards for themselves:

  • Time Commitment: Research reveal that these days directors spend from 200 to 300 hours per year on each board they serve. The said figure includes regular board and committee meetings as well as its preparation time. In addition, the occasional need for special board or committee meetings to deal with crises or unusual events, and directors serving on multiple boards may find themselves squeezed for time to adequately prepare for meetings.

 

  • Conflict of Interest: Conflict of interest at the board level can affect ethics by distorting decision making and undermining credibility. Directors bear a fiduciary duty of loyalty to their stakeholders. The duty requires directors and officers to avoid conflicts between the interests of the corporation and any opposing interests - not just the director’s personal interests, but also on the interests related to their other boards.

Therefore, considering the aforementioned while choosing your boards as per your capacity is the need of the hour. Experts say that that one board is all some directors can handle, but that some talented, well-organized individuals might be able to manage four or even five boards effectively if that is their full-time career. For directors who are also employed at a full-time job, more than two boards would be very difficult to manage well. Here are a few questions that would help you take appropriate decision while selecting boards:

  • How much time do you currently spend on your board work? Factor in board meetings, committee meetings, preparation time, and time spent researching or educating yourself. Are you able to consistently dedicate the required time?
  • What are the peak times for your current board work, and do they conflict with the schedule of the board you are considering?
  • Will you be able to meet your boards’ expectations at the time of crisis?
  • Is becoming a director your priority or do you consider it as a side job?
  • What other time commitments do you have? Factor in work as well as personal timings. Don’t forget time for yourself – activities, leisure, health and wellness. Do you find yourself sacrificing these commitments so you can complete your board work?
  • Analyze conflicts of interest between your current board / job / employment etc. and the boards you are considering to join.

For more details connect with us on info@mentormyboard.com.

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Category

  • All
  • Boardrooms
  • BOARDROOMS
  • Independent Directors
  • Role of Board
  • Mindset Shifts of Boards
  • Independent Directors and Promoters
  • Sustainability / ESG
  • business implication
  • employee exits
  • COMMITTEE MEETINGS
  • Union Budget
  • Independent Director
  • Grow with Governance
  • Grow with Governance
  • INDEPENDENT DIRECTOR
  • Entrepreneurial Board
  • ESG & ITS IMPORTANCE
  • leadership coaching
  • Change Management
  • Advisory Boards
  • Boards
  • Boardroom
  • Brand Yourself as a Leader of the Company
  • Kindness
  • Are you hesitant to speak in the Boardroom!
  • Governance & ESG
  • Directors
  • Independent Directors
  • Corporate Governance
  • Leader development
  • Gratitude, Purpose
  • decision making
  • Systematic Investment Plans in Emotional Intelligence
  • Corporate Governance
  • The Board’s Role in ESG!
  • Balance Boards
  • Agility and Compassion
  • Governance and Board
  • Diversity and Inclusion
  • Directors,Promoter Directors
  • Board Members, Directors and Independent Directors
  • Board and Senior Management
  • New Directors
  • Cyber Insurance
  • Salary Increment
  • Economy Growth
  • Human Resources
  • Generating Wealth Beyond Money
  • Agile Mindset for Leadership
  • Aspiring Independent Directors
  • Board Leadership
  • Corporate Governance & Women on Boards
  • BOARD MEMBER
  • SME
  • WOMEN DIRECTOR
  • BOARD MEMBERS

Archive

  • 2021
    • April (3)
      • Will you drive your vehicle without a dashboard?
      • Are you making SIPs to improve your Emotional Intelligence
      • Corporate Governance needs a Moral Compass – Ethics in Indian Boardrooms!
    • August (9)
      • Grow with Governance: ESG is the umbrella for CSR, says Vedanta's Roma Balwani
      • Grow with Governance: PadUp Ventures' Rajat Jain Demystifies Correlation of Governance and Economic Growth
      • Grow with Governance: Family governance impacts the culture of a family-run business, says Equations Advisors' Mita Dixit
      • Entrepreneurial Board
      • NEW REGULATORY PROVISIONS RELATED TO INDEPENDENT DIRECTORS
      • ESG & ITS IMPORTANCE FROM THE POINT OF VIEW OF BOARD MEETING
      • Start early, don't wait till retirement to become an Independent Director, says Increate Value Advisors' Milind Sarwate
      • The winding road of leadership coaching in the post-pandemic era
      • Challenges of Organizational Culture Change
    • February (4)
      • Re-examination of Purpose by the Boards in Post -Pandemic Era
      • What Makes Great Boards Great! Performance Evaluation by Boards and Role of Independent Directors
      • Promoter Director – Time to become Custodian of Governance!
      • Diversity and Inclusion – The Board Perspective!
    • January (2)
      • New Directors - Have you done your due diligence
      • Cyber Security Insurance and Boards
    • July (7)
      • Why Advisory Boards Are Important for Indian Business Corporates?
      • Grow with Governance: ESG essential to repair the damage economic activities caused to the earth, says CA Shailesh Haribhakti
      • Top 10 areas to contribute in Boards as Independent Directors
      • Top 10 Questions to Ask in Boardrooms!
      • Essential HOWs of Boardroom!
      • Kindness is key
      • How to Brand Yourself as a Leader of the Company?
    • June (6)
      • Leading from the Boardroom
      • Are you hesitant to speak in the Boardroom!
      • The Neem Project a Leadership case study
      • Directors Liability in India
      • Why do promoters need Independent Directors?
      • Corporate Governance Deviation – Infosys Case Study
    • March (4)
      • Board Refreshment: Finding the Right Balance for your Board!
      • HR Governance and Board – How Important Is It?
      • Agility and Compassion: Two Pillars for Boards in the Post Pandemic Era!
      • Modernizing Governance: The Board’s Role in ESG!
    • May (3)
      • Restructuring appraisals in 2021 – Gratitude, Purpose & Meritocracy
      • How do you make your personal Brand?
      • Leadership Coaching: How does it help Leaders
    • October (2)
      • Are Independent Director’s required on the Board?
      • 'Ethics & Governance' lesson should start from school, says Federal Bank's Independent Director, Sankarshan Basu
    • September (3)
      • Grow with Governance: As an Independent Director ensure your voice is heard, says Apurva Purohit
      • Grow with Governance: Push for ESG agenda; pool CSR funds to maximise impact, says Ranganath NK, former MD of Grundfos Pumps
      • Grow with Governance: Boards should prepare companies for different risks, says National Insurance Academy's G Srinivasan
  • 2020
    • August (4)
      • WOMEN DIRECTOR-An Emerge
      • ARE YOUR BOARD MEMBERS SAVVY WITH FINANCIAL TERMS AND EXCEL IN FINANCIAL LITERACY QUOTIENT AS PER COMPANIES ACT 2013 MANDATES.
      • BOARD MEMBER SELECTION- A TASK OF PERFECTION
      • SME IPO – AN OPPORTUNITY TO CAPITALIZE YOUR BUSINESS
    • December (3)
      • Good or bad, Salary Increments always cause a heartburn among employees
      • Is Economic Progress Enough?
      • Emotional Intelligence
    • November (3)
      • Generating Wealth Beyond Money
      • "Agile Mindset for Leadership"
      • Tips for Aspiring Independent Directors
    • September (3)
      • Independent Director
      • Lean Thinking Boards
      • Corporate Governance & Women on Boards
  • 2022
    • August (1)
      • Liability of Independent Directors – An Important Aspect of Corporate Governance
    • February (4)
      • A Hero's Farewell: How to handle employee exits with dignity
      • Green Bonds: An Instrument for Financing a Sustainable Future
      • Tool for effectiveness of Board Committees - Ask Right Questions
      • Russia-Ukraine war and India’s Business Implication
    • July (2)
      • Stagnation or Evolution – Mindset Shifts of Boards when Company sees Stagnated Growth
      • Risk Assessment and Minimization Procedures – Role of Board
    • March (2)
      • A study on Sustainability Report of Container Shipping Companies.
      • India and The ESG impact of Crypto Currencies
    • May (1)
      • Independent Directors liability under GST
    • November (1)
      • Workplace Sexual Harassment and the Role of Board
    • October (2)
      • How many Boards are too many?
      • Women in Indian Boardrooms Vs Diversity = Inversely Proportionate
    • September (2)
      • Organizing for the Future – Important keys to becoming future ready
      • Are you ready to serve on the Board?