How Much is Too Much? The Balancing Act of Chair and Non-Executive Director Roles

The question of how many chair or non-executive director roles an individual can effectively manage has become a topic of intense debate over previous years.

The Balance of Responsibilities

Research from Henley Business School suggested a cap of four board-level positions. Andrew Kakabadse, a professor at the school, emphasises that three to four roles are the maximum to adequately address underlying issues. However, in practice, individuals often hold far more positions, with up to 13 directorships in the United States and 14 in South Africa not being uncommon. I, myself, have seen the CVs of high profile non-executives who hold in excess of this and in some cases have referred to their ability to "Send a proxy". Amazing (in the negative).

The Challenges of Overcommitment

The case of Sir John Peace, who chaired three FTSE 100 companies and faced multiple shareholder rebellions, exemplified the difficulties of juggling numerous high-level commitments. Most of my peers would recommend two chairman roles in quoted companies, often citing the need for time to "handle crises".

Increasing Complexity

It seems that non-executive positions have become more burdensome due to the complex and dynamic nature of modern day business. The diverse macroeconomic and political impacts on companies demand more from board members than possibly ever before. As I cast my mind back to "Covid times", my own time was in much more demand from the various boards I advised and the issues were far and wide - from financing to furlough.

The Limits of Awareness

It is certainly true that non-executives in larger, more complex businesses (opposed to SMEs) may not be fully aware of everything happening across the organisation. This lack of comprehensive awareness will obviously raise questions about the feasibility of effectively managing multiple roles.

Self-Assessment and Limitation

Patrick Gallagher, formerly president of BT Europe, was quoted in The Times suggesting he limits himself to four board positions, stressing the importance of measured commitment and flexibility to adapt to changing circumstances. Sir Roger Carr, chairman of BAE Systems, emphasises individual responsibility in assessing the ability to manage various roles. He advocates for a thoughtful assessment of both standard and variable time commitments.

The debate over the appropriate number of chair and non-executive director roles an individual can effectively manage underscores a broader discussion about corporate governance in today's business environment.

While there is no one-size-fits-all answer, the consensus leans towards a cautious approach, prioritising quality and depth of engagement over quantity of roles.