The Board Game

Debate swirls on how many board directorships are enough

Critics say too many can sap energy, weaken challenges to executives

Jonathan Miller, former AOL chief, served on the boards of eight publicly traded companies as of last month.
Caroline Sinno/New York Media Festival
Jonathan Miller, former AOL chief, served on the boards of eight publicly traded companies as of last month.

Third in an occasional series.

Former AOL Inc. chief Jonathan F. Miller joined so many corporate boards that even he has had trouble keeping track of them all.

Miller recalls attending the annual shareholder meeting for advertising giant Interpublic Group of Cos. in Midtown Manhattan, and skipping the annual meeting for European entertainment network RTL Group in Luxembourg. As for those five other annual meetings last spring of publicly traded companies where he was a director in California, New York, and Massachusetts?

“I would have to check,” he said.


It’s little wonder why Miller has trouble remembering.

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As of last month, he was on the boards of eight publicly traded companies in six cities that collectively hold more than 100 meetings a year. Those positions are expected to pay him well over $1 million this year. Miller also sat on 11 other boards of privately held and nonprofit enterprises, while holding down a day job as a partner in a Norwood venture capital company. And then there’s his second job advising a private equity firm in London.

“I don’t idle well,” said Miller, 59, adding that he still found time to practice tai chi each morning.

Situations like Miller’s are fueling a simmering debate across corporate America: How many public boards are too many for one person to handle?

Sitting on too many boards can make it difficult for directors to fully prepare for meetings and challenge senior management, say watchdog groups who advocate for limits to board membership.


“I find it very hard to believe that anyone could adequately serve on that many boards,” said Nell Minow, vice chair of ValueEdge Advisors LLC, a Portland, Maine, firm that advises major shareholders. “No one has that much energy and attention.”

Miller initially insisted he was able to juggle all his board meetings successfully. But after The Boston Globe pointed out that he was violating the policies of three companies that limit the number of boards its directors can serve on, Miller resigned from several of the boards and turned to a crisis communications specialist to field further questions last month. Miller said he is now “in full compliance with any relevant company guidelines.”

Miller’s heavy schedule is not unique in the world of board directorships.

One of the country’s largest shareholder advisory services, Institutional Shareholder Services, found that more than 230 corporate directors across the country serve on at least five publicly traded boards. Former Wisconsin governor Tommy G. Thompson is on six public boards. Former Glaxo Holdings chief Ernest Mario was on seven, including Marlborough-based Boston Scientific Corp., though he left one board this year.

The issue matters because board members play an important role overseeing most of the country’s largest and most significant companies. Directors are the ones charged with hiring and firing the chief executive, helping to oversee the long-term strategy of the firm, and keeping an eye on senior management.


In a pair of stories earlier this month, the Globe found that boards remain dominated by white men, despite pressure to add more women and minorities. Meanwhile, director pay has skyrocketed over the past 15 years, with some directors now earning more than $1 million for a single board.

‘The relevant questions are and should be: Are the members of the board fully prepared, constructive, and actively engaged?’

Many business officials justified the executive-style pay packages by arguing that the jobs have becoming more time-consuming. But the Globe found many directors have joined so many boards that some watchdogs worry they can’t handle all their duties — a problem sometimes called “overboarding.”

Complaints about overboarding have come up before. Many companies and watchdog groups adopted restrictions on the number of boards that directors could serve years ago after revelations that some executives served on more than a dozen boards. Former defense secretary Frank C. Carlucci, for instance, served on 14 boards in 1996.

But the issue never went away. Some shareholders and watchdogs say the old limits are now too generous because shareholders expect more from directors. And directors now have to deal with more regulations, including Sarbanes-Oxley, a law that expanded board responsibilities, and the Dodd-Frank law, which overhauled federal oversight of financial institutions.

The National Association of Corporate Directors reported that directors of publicly traded companies now spend an average of 248 hours per year on each board they serve on, up from about 156 hours per year in 2003.

Plus, watchdogs insist directors can’t pack their schedules too tightly because they never know when a company will get into trouble and need to call emergency meetings.

“The biggest factor is the time commitment,” said Peter Gleason, president of the National Association of Corporate Directors. “If you’re on two boards and one has a hostile takeover going on, you’re going to spend a tremendous amount of time with the company in a hostile takeover situation and the other board will be sitting there saying, ‘Why can’t you come to the meetings?’”

Gleason said the organization’s two-decade-old recommended limits on how many boards a director can juggle — up to six for board members without a full-time job — are outdated.

“Now those numbers are high by many peoples’ standards,” Gleason said.

Two of the nation’s biggest shareholder advisory services — Institutional Shareholder Services and Glass Lewis — both recently lowered the maximum number of boards a director can serve on from six to five.

Though the guidelines don’t have the force of law, they can have a huge impact on companies because many shareholders rely on advice from Institutional Shareholder Services and Glass Lewis when deciding how to vote in board elections.

Many shareholders wanted even stricter limits. In a survey of large investors, nearly half of respondents urged Institutional Shareholder Services to lower the limit to three or four boards. Even many companies are uncomfortable with someone serving on five or more boards.

“Our clients get really anxious when someone’s on three boards and wants to add a fourth board,” said George L. Davis Jr., of Egon Zehnder, an executive search firm that helps recruit directors.

But some business groups and advocates pushed back, publicly telling Institutional Shareholder Services the decision should be left to individual directors and companies.

“The relevant questions are and should be: Are the members of the board fully prepared, constructive, and actively engaged?” Kerry E. Berchem, a New York corporate attorney, told the Globe.

About half of companies have enacted limits on their own. But firms disagree about where to draw the line.

J.M. Smucker Co. generally bars directors from serving on more than three boards, Verizon Communications Inc. puts the limit at four, Raytheon Co. at five and Biogen Inc. at six. Others, such as Staples Inc. and Thermo Fisher Scientific Inc., have no hard limit at all. “We prefer the flexibility to review each situation on merit,” said Thermo Fisher spokesman Ron O’Brien.

Yet even when companies do enact numerical limits, the Globe found they often make exceptions or ignore their own rules.

Former EMC Corp. executive John R. Egan sits on five boards, including EMC, even though the Hopkinton technology company says “generally no director should be a member of more than three public company boards.” Egan earned a total of $1.6 million from his board positions last year. EMC declined to comment.

And Thompson, the former Wisconsin governor and US secretary of health and human services, serves on six boards, even though the corporate governance guidelines for one of the firms, Centene Corp., says no director may serve on more than five.

Centene spokeswoman Marcela Manjarrez Hawn said the St. Louis health care company’s limit is a “guideline, not a rule.” She also said Thompson is retired and plans to reduce the number of boards he sits on by the end of the month. Last year, Thompson earned a total of $1.5 million in compensation from his public board work.

It’s easy to understand why so many companies would want to attract a former governor or experienced executive like Miller, the former AOL chief who was on eight boards. They bring a wealth of experience and prestige to the companies they serve.

Miller, a graduate of Brookline High School and Harvard University, has accumulated deep experience overseeing both major digital operations and working in venture capital, giving him a window into emerging technologies.

“Jonathan Miller really is a star in the digital media world,” said Tom Leighton, chief executive of Cambridge-based Akamai Technologies Inc., which elected Miller to its board in July.

Over the course of his career, Miller helped launch a British version of Nickelodeon while working for Viacom, oversaw the e-commerce of Barry Diller’s media empire, repositioned AOL from a subscription Internet service to a free Website, and ran News Corp.’s digital media group.

Today, Miller serves as a partner at Advancit Capital, a venture capital firm based in Norwood, which Miller said is the equivalent of two-thirds of a full-time job. He also advises a second investment company, Greater Pacific Capital.

But Miller is on so many corporate boards that even he struggles to keep track of them all. In addition to the eight publicly traded companies, Miller initially said he thought he sat on the boards of “three or four” privately held companies. His public relations representative, Nancy Sterling, eventually acknowledged he actually sat on seven private boards, as of last month, though he has since whittled that number down to four, most of them related to his job. He also resigned two of his four nonprofit board posts after the Globe asked about them.

Still, Miller initially suggested it was no problem serving on so many public boards.

He said he worked with the companies and fellow directors to schedule meetings so they don’t conflict with one another. And he insisted that much of the work is clustered at the end of quarters. “This is what happens every quarter, so you can plan for it,” he said.

In 2014, when Miller was on fewer boards, all four US boards indicated that he attended at least 75 percent of the meetings by phone or in person. Miller’s spokeswoman said he believes he also attended at least 75 percent of the meetings this year.

“I believe I have made substantial and valuable contributions to each of the boards I served on,” Miller said in a statement.

But even one of Miller’s fellow board members said there are limits to how many boards one person can handle because of the amount of work involved.

“I think anybody who serves on more than four or five boards couldn’t do it, even if you’re retired,” said Lawrence K. Fish, chairman of the board for book publisher Houghton Mifflin Harcourt Co., one of the eight boards Miller joined.

Fish, the former chief executive of Citizens Financial Group Inc., said the Houghton board temporarily gave Miller permission to serve on six boards — one more than the company’s policy normally allows — because he promised to step down from one of the other boards by the end of the year. But Fish said he had no idea Miller was actually on eight public boards. “I am surprised to hear that,” Fish said.

The Globe also discovered Miller violated the rules for two other companies, Interpublic Group and Shutterstock Inc., which bar directors from serving on more than five or six boards, respectively.

Shortly after the Globe asked Miller about the situation early last month, Miller resigned from the boards of Houghton Mifflin, RTL, and Shutterstock. Miller said in a statement he would have stepped off some of the boards earlier, but was distracted by spinal surgery.

“For some time I intended to adjust my board memberships,” he said in a statement. “Unfortunately, a spinal condition, surgery in the spring of 2015, and a difficult recovery delayed this process.”

The statement did not address Miller’s decision to join three new boards this year and run for reelection for others.

Six companies Miller served also failed to list all the boards he was on, in apparent violation of federal securities rules. That made it difficult for shareholders and their advocates to see how busy he was when deciding whether to approve his nomination as a director in five ballot contests last spring.

Two of the firms, j2 Global Inc. and AMC Networks Inc., declined to comment on the omission. A third, TripAdvisor, said it was “an oversight on our part.” But three other companies implied Miller neglected to tell them about all the affiliations. Houghton Mifflin, Interpublic, and Shutterstock said they disclosed all of Miller’s board work they knew about. Interpublic even said it gave Miller an opportunity to review its securities filing in advance.

Glass Lewis and Institutional Shareholder Services probably would have recommended that shareholders vote against Miller’s reelection to five boards last spring had they known he was on more boards than their guidelines permitted.

Miller eventually apologized for any omissions to the companies he served. “While my public board service has been a matter of public record, I am sorry that there were certain instances where the companies did not receive complete information from me,” he said.

Todd Wallack can be reached at [email protected]. Follow him on Twitter @twallack. Sacha Pfeiffer can be reached at [email protected]. Follow her on Twitter @SachaPfeiffer.