Is Bigger Better?

When we are talking about corporate boards, maybe. In a recent study called “Corporate Board Attributes and Bankruptcy” by Harlan Platt and Marjorie Platt of Northeastern University, the authors suggest that boards that have members of different ages, members that are CEOs of other companies, members that start and end their board membership at different times, and an average of 9.96 members (rather than 8.89) are less likely to file for bankruptcy. So is bigger better, I would give a reserved yes.

Yes because I believe that each board member must contribute something to the strategic direction, financial health and ethical practices of the board and, by extension, the organization. Having 10 board members with 10 different perspectives is obviously better than having 9. My reservation is over having “dead weight” (excuse the frankness) on the board to fill quotas or to fill seats. There is also the much discussed issue of the ideal size of a group (answers vary from 5 to 12).

I would argue then that the answer to “Is Bigger Better?” in boardrooms and in other aspects of life, has more to do with quality than quantity.

I have been exploring the quota issue especially as it relates to diversity on boards. I have seen some excellent interviews by Lucy Marcus on this subject (see below). More on diversity in a later article.

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One thought on “Is Bigger Better?

  1. […] 1) Increased participation by women in decision making (at corporate level, in politics, buying decisions) (see my AmericaEconomia article in Spanish or my blog post on corporate governance) […]

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