Team #5

Board members should not be allowed to sit on the boards of more than one
company

Introduction

This debate has the purpose of convincing the audience that board directors
should not be allowed to sit on the boards of more than one company.

A board of directors is a body of elected or appointed members who jointly oversee

the activities of a company or organization; they also are the representatives of the
stockholders to establish corporate management related policies and to make
decisions on major company issues. Such issues include the hiring/firing of
executives, dividend policies, options policies and executive compensation. It is
true that every public company must have a board of directors.

Taking the favor position in this case we will try to convince the audience that
board directors sitting in other boards its not the best idea by using the arguments:
As a company it may be risky, Directors can confuse works and Directors may not
have time enough for both works. Some people say that when a director sit in other
board he/she gains experiences of working, that the company can obtain benefits
like improving their market or associating with other companies to produce more
money. This is not all true because when a directors is spending time “learning
new skills or trying to associate with other directors” is really wasting time that can
be use in the company so this one doesn’t need to associate with other one to
improve their market or to produce more money.

Position in Favor
Board members should not be allowed to sit on the boards of more than one
company

Argument A: For the company it may be risky

A company should not allow its board members to sit on boards different than their
company, because it may have a great risk for them. If they accept that their board
members sit on several companies, the confidential information would no longer be
confidential and this could cause huge problems for the company.
The ideas could be stolen, because even if you know that the only persons
authorized to have this confidential information are the board members, some of
them can infiltrate these ideas in their others companies or maybe they can make
some mistakes and pass the information; so even if you know that the board
members are looking for the best for the company, you will not be sure of their
loyalty.
"We must all hang together, or assuredly we shall all hang separately!"
This is a quote said by Benjamin Franklin, and this explains that it takes a team to
build a succesful venture, and the company’s board of directors is the ultimate
team that accepts the responsibility of the company. So all the board members
should always be together, so in this way the company can keep going; if any of
the members go to the sit of more than one company, the relation between all the
members can be affected and this would affect enormously the company.
A board serves the company, because is the soul and conscience of the
enterprise; in consequence, is very important that all the members of the board
keep always together and with good relations among them.
Also is very important that the ideas and confidential information of the company
stay always inside the company. In this way, it’s more important that the board
members stay only in one company. This will protect the organization.
http://www.sfu.ca/~mvolker/biz/bod.htm
http://www.forbes.com/sites/ericjackson/2013/03/14/all-operating-executives-
should-never-serve-on-any-outside-boards/2/

B) Directors can confuse both works

1. Ideas between both companies can get in the director’s head
2. While trying to solve one problem s/he may say some strategies of the other
company
3. The director may get confuse with his or her work from the different companies,
due dates, etc.

Ideas between both companies can get in the directors head while working. The
director can be thinking in developing a new product and in the process of
generating new ideas he/she probably will confuse the ideas for one company with
the ideas of the other company, It is not the same to generate ideas for a company
that sales shampoos to generate ideas to one company that sales shoes. This
probably will result that the assignment that he or she has to do could not be
completed how it requires because the director can confuse the ideas of the both
jobs and he/she would do it in the wrong way.

The director may use strategies from the other company while trying to solve one
problem. If the director needs to do a new project or needs to develop a new
product he or she can use the strategies of the other company. In some cases this
can be a benefit for the company but if the companies have different market targets
probably the strategy of one company will not work in the other company.

The director may get confuse with his or her work form the different companies.
The director can be thinking how to solve one problem of the company or how to
finish one work and in the overthinking process he/she can confuse the work or the
ideas and start working with the work of the other company, it is not the same to do
a report of the profits of the company or to do a report of how to save money from
saving electricity. Other problem that can occur is that the director confuses the
due dates of the assignments, if one work is due the next day and the other one is
due the next week and he or she may get confuse and turn the dates around, so
he or she will work in the assignment that is due for the next week instead of work
in the assignment that is due the next day.
C) Time isn’t enough
1. Directors doesn’t have enough time to attend the board meetings.
2. It’s a huge time wasted preparing and attending to both duties.
3. Ethically you can’t prioritize any company.

The Board of Directors is the governing body for a company. All major decisions
will need to be ratified by the Board. You will need the Board's approval to sell your
company. You will need the Board's approval to hire or fire a CEO. You will need
the Board's approval to do a major acquisition. You will need the Board's approval
to do a major financing. On all matters of major strategic importance, the Board will
need to be engaged, involved, and supportive. Being a board member is a very
demanding job, one in which your time and ideas most be completely into the
company’s disposition. It requires of a lot of time spending, and this won’t be fully
accomplished by being part of more than one board of directors.

http://www.forbes.com/sites/ericjackson/2013/03/14/all-operating-executives-
should-never-serve-on-any-outside-boards/

Roxana Reyes
Gabriela Morales
Melissa Reyes
José Alejandro Terrazas