Wednesday, May 13, 2009

Well, the evidence is growing. In an e-newsletter some time ago I mentioned, based on growing research on team performance, that boards are downsizing and that the ideal size is probably under ten. The latest (May 2009) Harvard Business Review has a wonderful interview with J. Richard Hackman, Edgar Pierce Professor of Social and Organizational Psychology at Harvard, and recognized expert on team performance. He starts the interview by pointing out how difficult it is to opimize team (including board) performance. Usually teams underperform their potential - often disasterously. Later in the interview he points out several fallacies about teams, one of which is the bigger the team, the better. After discussing what goes wrong in larger teams he say his rule of thumb is "no double digits." Bingo! A governing board is a team with a product to create - wise decisions and policies, and team performance principles apply. Further it has several strikes against it going in, infrequent time together, little opportunity to build trust and relationships, etc. Why further damage the performance with size?
As I said, the evidence is growing and becoming virtually a consensus. Keep board size (or committee, or team, or any body intended for creating a product - a plan, decisions, etc.) under ten. Other evidence has suggested that performance actually peaks around six! I've seen excellent boards in the five to six range. Furthermore, they hold each other accountable more effectively, stick to their word better, deal with mavericks or dysfunctional members more effectively, and they can, when a board, and using the right governance process, represent a diverse ownership just as well or better than a large body.