"Board doctors" charge up to $250,000 to come into company board rooms, provide in-depth assessments and encourage directors to make tough decisions they may otherwise avoid on their own.
The Wall Street Journal reports approximately 19 percent of the largest public U.S. companies hired an outsider to evaluate their boards in 2013 — a 17 percent leap since 2010. Those numbers come from Spencer Stuart, an executive search firm. In five years, up to 35 percent of major companies could be putting "board doctors" to use. Financial and banking firms were some of the first to start making calls for checkups.
These advisors come from a range of backgrounds and include executive recruiters, leadership coaches, lawyers, academics and governance consultants. More professions are getting into the field, which can charge between $25,000 and $250,000 for an assessment.
The intents or results of checkups vary. Some boards want the outside advisors to identify their weakest members before others do, while others need to reduce the information overload board members may experience due to 800-page briefings distributed before meetings. Some boards want the "doctors" to weigh in on strategic matters, such as how much directors should prod executives to consider a takeover.
And some boards just want the consultant to make it easier to cut dead weight. After all, 36 percent of directors think someone one their board should be replaced, but they identify directors' discomfort in doing so as the biggest obstacle, according to PwC research cited by WSJ.
The WSJ report mentions one director who played Sudoku during board meetings for six years straight. Executives complained to the outside advisor, saying they felt a lack of respect. When this was communicated the board chairman, he or she addressed the behavior, and the Sudoku-playing board member decided not to stand for re-election.