But many CEOs resign some or all of their board seats when taking on new challenges. According to Spencer Stuart research, there has been a nearly 50% decline in active CEOs serving on boards in the last 10 years and currently less than half of CEOs serve on any outside board.
To address how a CEO may view outside board membership versus how the board and shareholders may view it, many boards today actively limit CEO participation on outside boards (to none or one) as a condition of employment. If Whitman only works the average amount of hours for directors (according to the National Association of Corporate Directors), her outside board service takes up over 51 hours a month. Shareholders will have to decide if three outside boards is too many for a sitting CEO in a company whose stock price has still not fully recovered from the self-induced shocks that have occurred while she was sitting on HP's board.
Lead director Rajiv Gupta, chairman of Avantor Performance Materials and senior advisor to New Mountain Capital, sits on the HP board plus the boards of Delphi Automotive (DLPH), Tyco, The Vanguard Group "and several private companies." Pat Russo, who heads the compensation committee, sits on five boards including HP.
Maybe shareholders will decide to send a message on pay and board elections this year. If they don't, maybe next year, we'll just see more of the same.
Eleanor Bloxham is CEO of The Value Alliance and Corporate Governance Alliance (http://thevaluealliance.com/), a board advisory firm.
