Directors Should Expect Questions About “Overboarding”

Corporate board members may want to reexamine whether sitting on two or more boards is in their long-term best interest. An excerpt from a PJT Camberview memo printed in the blog this week suggests that large institutional investors such as Vanguard, BlackRock and Boston Partners are leading a push to restrict the number of boards directors can serve on by pulling re-election support from those who serve on two or more boards.

According to, the PJT Camberview memo uses stats from a June ISS Analytics report that showed a number of directors sitting on two or more boards “saw their support drop 25 or more percentage points on a year-over-year basis.” The memo then reasons that, “Tighter overboarding policies may become more prevalent in the coming years, with direct implications for board diversity, succession planning and the way that directors and companies manage and track their board commitments.”

By pulling support from directors sitting on two or more boards, these large institutional investors could be sending the message that they don’t trust that corporate directors can manage their workloads on their own, so they may need to use stricter overboarding policies to do it for them.

However, the pulling of support from directors serving on two or more boards could also simply mean that a deeper dive into the circumstances of each individual director is required to determine whether or not the pulling of support was justified due to a lack of performance.

While it remains to be seen just how aggressive investors are ultimately going to become when it comes to tightening overboarding policies, the extra attention drawn to this issue provides an opportunity for directors who currently are serving on two or more boards to do an honest self-assessment of their performance.

They need to determine whether or not they are contributing to increasing the value of each of the boards they sit on. If this year’s data from ISS Analytics is an indication of what’s to come, the likelihood that any director who sits on two or more boards is currently being evaluated by the big institutional investors is high.

By doing a self assessment of their performance now, directors give themselves an opportunity to create their own narrative about their ability to adequately serve each of the boards they sit on. In the assessment, they can go into great detail about the positive contributions they’ve made and explain why their performance would not be affected by any number of crises that might befall the companies they serve. By doing this, they would also be better prepared if any investor group were to threaten to pull support for their re-election to the board in the future.

Read more: Should CEOs Let Their C-Suite Serve On Outside Boards?