Board Members and CEOs: How Close Is Too Close?
The relationship needs both strong ties and flexibility.
Jake VanKersen: Imagine being able to hire the people that were responsible for putting your compensation package together. A company’s board of directors is meant to represent the shareholder's interest, but when the CEO is often the one that hires them, can they really be objective?
Kristoffer Inton: Based on our research, we’re skeptical that board members are as independent as they’re supposed to be. CEOs tend to play a heavy role in the selection of the board, which can lead to them selecting the candidates most sympathetic to their cause. Disagreeing with that same CEO might mean you won’t get invited to a board again.