Board members are supervising operations and overseeing executives (or are supposed to - many get ‘captured’ by management depending on the company), not running them.
One thing that is REALLY helpful when supervising highly complex operations like a large corporation is knowledge of how similar operations are run at a large number of other companies
It makes it easier to identify things like pointless ‘not invented here’ syndrome, or where a company is being very inefficient in an area because they don’t know of any alternatives.
It’s common for companies to hire in outside consulting firms or independent contractors who also work for a great many companies in an industry for the exact same reason. It’s a way of keeping on top of what the industry norms are so the company doesn’t fall behind and lose competitiveness.
Plenty of pros and cons there, but that is a big part of why.
The other reason is the board of directors works for the shareholders, and represents their interests.
Institutional shareholders hold shares in a lot of different companies, and if they have someone they know , trust, and are happy with performance wise, most would prefer to have them on the boards of as many companies as they think they have the expertise to oversee.
So you are saying it is GOOD if an employee is working two jobs because they are then exposed to more solutions and actually SAVE the company because they can reuse existing knowledge other companies have taken the time to develope? I like your thinking :)
If that’s what happens, everyone is fully informed, and they mind the NDA? Sure. That’s pretty much the definition of an (actual) software engineering contractor for instance.
That’s pretty much never what happens though if someone does it when applying for a full time salary position, and line managers know it, which is why you see people get worked up about it. People doing it try to convince themselves it’s not a scam, but it almost always is.
The folks doing this on boards, despite any hate and derision they are getting here, are often exceptionally talented, educated, and have a long list of references where they have been doing it before successfully. They were voted in with full visibility to their other board memberships, and while being open about it and any potential conflicts of interest. They’re just not software engineers. I have yet to meet one that didn’t work their asses off either, just not in the way you might recognize.
There can be (and is, of course) nepotism, cronyism, etc. that happens, same as anywhere, and the shareholders who vote that in get what they deserve as well in my experience. Sometimes it’s also as simple as ‘x owns this company, and wants y to takeover when they’re gone, so y sits on the board.’. Rare in public or widely held companies though.
Ownership has it’s privileges, and it’s costs after all.
One thing that is REALLY helpful when supervising highly complex operations like a large corporation is knowledge of how similar operations are run at a large number of other companies
It makes it easier to identify things like pointless ‘not invented here’ syndrome, or where a company is being very inefficient in an area because they don’t know of any alternatives.
It’s common for companies to hire in outside consulting firms or independent contractors who also work for a great many companies in an industry for the exact same reason. It’s a way of keeping on top of what the industry norms are so the company doesn’t fall behind and lose competitiveness.
Plenty of pros and cons there, but that is a big part of why.
The other reason is the board of directors works for the shareholders, and represents their interests.
Institutional shareholders hold shares in a lot of different companies, and if they have someone they know , trust, and are happy with performance wise, most would prefer to have them on the boards of as many companies as they think they have the expertise to oversee.