11/25/96 TABLE: New Expectations for Directors

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New Expectations for Directors

The National Association of Corporate Directors has issued new guidelines for enhancing the professionalism of board members. The key recommendations are that directors should:
-- Become active participants and decision makers in the boardroom, not merely passive advisers.
-- Budget at least four full 40-hour weeks of service for every board on which they serve.
-- Limit board memberships. Senior executives should sit on no more than three boards, including their own. Retired executives or professional directors should serve on no more than six.
-- Consider limits on length of service on a board to 10 to 15 years to allow room for new directors with fresh ideas.
-- Immerse themselves in both the company's business and its industry while staying in touch with senior management.
-- Know how to read a balance sheet and an income statement and understand the use of financial ratios.
-- Own a significant equity position in the company.

-- Submit a resignation upon retirement, a change in employer, or a change in professional responsibilities.
DATA: NATIONAL ASSOCIATION OF CORPORATE DIRECTORS

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