During my investment career I have always been perplexed by the make-up of most firm’s Board of Directors, from my coverage of U.S. stocks to global Stocks, from small cap to mega cap companies, from the buy side to the sell side. I have seen it all, and I have almost universally been disappointed. I have seen a medical doctor sit on the board of one the largest railroads in the U.S., management from top customers sitting on compensation committees, and active Fortune 100 CEO’s that also held three board of director positions. But like most investors, I have just noted the poor board make-up, and included it in the mosaic of information I use to make investment decision, because in reality most board memberships are poorly filled and there was little as investor I could do about it. Unfortunately, I did not think about it much, I did not ask why boards were so poorly filled.
The chairman’s presentation at Diligent’s (DIL –NZX) 2013 AGM (June 23rd) included the following brief statement under the heading Strengthened Internal Controls: “The Board is currently undertaking a review of corporate governance matters with the assistance of an outside consultant, including with respect to the desired skill sets for the Board, share administration and other internal processes related to corporate governance.”