The Board Book: An Insider's Guide for Directors and Trustees

This is a very good book, and it is with a certain sense of reluctance that I rate it with only four stars instead of five. Mr. Bowen, a distinguished and highly experienced professional who has served on many for-profit and not-for-profit boards, does a commendable job of sharing his wisdom, insights, and recommendations in this thoughtful and important book. The one frustration that I found with the book is the manner in which it jumps back and forth between issues involving for-profit boards and not-for-profit boards. In jumping back and forth, I felt a bit like my train of thought was continually interrupted. Perhaps a good analogy to explain my sentiments might be the following: You enroll in a foreign language studies program with the hope of learning both French and Spanish only to find that both languages are being taught in the same class at the same time; an astute student will learn a great deal, perhaps, but it might be easier and more enjoyable to separate the lessons a bit more. That being said, let me share some observations as to why this book is so good (in spite of the shortcomings mentioned above): * The depth of Mr. Bowen's experience shines through on every page. This is a man who really knows what he is talking about, and he does an excellent job of sharing his valuable knowledge in a way that readers can easily understand and readily absorb. * His advice is not just scholarly or "ivory tower", but rather very practical. One can put down this book, head straight for the boardroom, and apply its lessons immediately. * Mr. Bowen captures the heart of many cultural, political, and related issues that impact the duties and responsibilities of those who serve as directors and trustees. Indeed, he goes far beyond simply sharing what he has seen and experienced: he offers interpretations and explanations for such trends, and thoughtfully weighs the pros and cons of many important issues. His discussion of the trends, as well as the benefits and potential drawbacks, of the move towards more non-executive chairmen of for-profit companies is one good example. Overall, the book is rich in useful suggestions and good advice; I could cite many more examples, but instead I suggest that you simply read the book if you have any serious interest in this topic. Indeed, this book should be required reading for any director of a public company, large privately owned company, or significant not-for-profit entity. One of the reasons that I like this book so much might be that I agree with so much of what it has to say. While I do not have experience on not-for-profit boards, I have served on about a dozen small company boards, mostly for private companies. Many issues that I have addressed as a board member are thoughtfully presented and articulately discussed in this book. I found the chapters on "Board Leadership," "Building the Board," and "Board Machinery" to be particularly helpful. Finally, the last chapter, entitled "The

THE BOARD BOOK: AN INSIDER'S GUIDE FOR DIRECTORS AND TRUSTEES tells directors how to guide organizations into the 21st century in a book for any new to board membership, as well as for those seeking the latest thinking on their organization and management. Drawing on over thirty years of experience with both for-profit and non-profit boards, it offers insights on ideal relationships between presidents and board members. Any business library needs this.

Power and accountability, personal and institutional relationships, profits and non-profits - all are examined as part of Bowen's analysis of the principal function of boards, CEO compensation, CEO evaluations, CEO transitions, and board mechanics (structure, meeting frequency). A properly functioning board provides checks and balances against abuse of power and foolishness, input of potential impacts on outside constituencies, review and approval of strategic direction, and assurance the the organization adheres to the organization's stated mission. One key decision involves deciding whether the CEO should also be Board chairman. Bowen points out that separate chairman and CEO roles allows the board to better exercise its key oversight responsibility and divides a heavy workload. Board size is another important decision. Experts find that for-profit boards smaller than 8 generally are inadequate, and larger than 16 are too large. Non-profit boards, however, tend to be larger because of the need to represent diversity of constituents. Foundation boards, on the other hand, average 12.5 members - smaller because they don't have to solicit donations. Two other important topics well addressed are board and CEO recruitment.

This is a remarkable and valuable book. Remarkable in the depth and intensity of its coverage of the subject, and valuable as a road map for directors and potential directors, not to mention CEOs who may be confounded by their relationship with their boards. Bowen was a Professor of Economics who became President of Princeton University, then of the Mellon Foundation, and later Ithaca Harbors. He has been on both sides--management and director--and has broad experience in both the non-profit and the for-profit worlds. His service on the boards of several pre-eminent U.S. companies, a few of which have gone through periods of challenge and adversity, has given him unique background and experience. We are fortunate that someone with his credentials has decided to tackle with such passion and insight the thorny and difficult issues that boards have to deal with. The approach is not that of an academic describing the structures and responsibilities of boards; rather Bowen comes with strong points of view on many of the most controversial issues. Readers (including this reviewer) are certain to disagree with some of his positions, but will have to give him high marks for fairly presenting the other side of most issues. CEOs who want the title of Chairman may not be happy, nor aging board members, not long serving board members, nor the retired CEO who just became Chairman. But each of these players will find the materials provocative and enlightening. What is also remarkable about this book is its underscoring how much has changed in the past 14 years in board matters. Bowen had previously authored a book on the same subject entitled "Inside the Board Room." The landscape today is barely recognizable from that of 1994. Not only has there been new legislation that encompasses and governs some board activities, but there have been as well dramatic changes in the mores of boards in the United States. Every large investor in a public company should seriously consider this book as an early Christmas present to each member of the board of directors of his company, with maybe a label of "Urgent" on the copies for the chair persons of the nominating committee and the compensation committee!

Although billed as a "how-to" book for members of governing boards of institutions both public and private, profit and non-profit - it is that - it is also much more than that. In spinning out its advice on how to discharge the complex of responsibilities that go with those positions William Bowen instructs the reader on what those responsibilities are, and in so doing, provides a deep analysis of the nature and functioning of the proper governance of so many institutions that have a deep, daily, and pervasive impact on our daily lives. It is a "must" for anyone who wants to understand a critical segment of the way our society is governed. Although appropriately "scholarly" and well-informed, it is accessible and easy to read. If it receives the attention it deserves, we will all be better off for it.