Andrea Bonime-Blanc had earned a solid reputation as an international corporate lawyer at Cleary Gottlieb when she joined her first board of directors. It was an honor to have been asked, and she felt a kinship with the organization’s mission. She quickly accepted the offer, but over time learned that her decision was hasty.
“Looking back, the board had all the hallmarks of mediocre governance,” says Bonime-Blanc, who would later spend two decades as a C-Suite corporate executive at Bertelsmann, Verint, and PSEG, while simultaneously serving on a handful of other for-profit and nonprofit boards.
For one thing, the board was composed entirely of men twice her age, several of them retired. Some members worked hard while others coasted, just showing up, “if they did at all,” she says. “Whatever the chair and vice-chair wanted, it was rubberstamped. I didn’t know much about governance at the time, but it seemed odd that there were no minutes and no formal elections, just new members who would suddenly pop up from time to time, handpicked by the chair.”
While there were bylaws, no one looked at them, she adds. “Meetings had the appearance of a board discussion, but there wasn’t much, if any, governance infrastructure underneath.”
“As I understood more about effective board governance, I kept trying to resign but they wouldn’t let me,” she says. “Finally, I simply tendered my resignation. I just had to escape. The board was on a fast train to nowhere.”
Bad boards are nothing new, with some spectacular failures over the years (just type “worst corporate boards” into a search engine and take your pick). Looking back, many ill-fated board members blame their egos for overriding their better senses. As one director put it, “I was so honored to be asked, I forgot to do a reality check.”
Neglecting to perform due diligence into a board can result in the miserable experiences Bonime-Blanc endured, and far worse. Some directors have found it difficult to rub off the reputational tarnish of an in-the-news bad board, while others were ensnared in derivative shareholder class action litigation for allegedly failing their fiduciary duties. Had they dug beneath the surface, they might have discovered the harbingers of a bad board.
“Nobody willingly wants to join a bad board,” says Anna C. Catalano, an independent board director at several public companies and privately held corporations, including audit firm Willis Towers Watson and polymer manufacturer Kraton Corporation. “As a candidate, the only way for you to avoid this fate is due diligence.”