& Securities

We have previously covered how both ISS and Glass Lewis, citing an “explosion” in the time commitment needed for board service, have lowered from 6 to 5 the maximum number of public company directorships a director (other than the CEO) may have before being considered “overboarded” and thus subject to a negative vote recommendation under their respective policies. See our alert, Heads Up for the 2017 Proxy Season: ISS and Glass Lewis Update Their Voting Policies, available here.

In his new book, The Activist Director: Lessons from the Boardroom and the Future of the Corporation, Ira M. Millstein argues “[w]hen evaluating director candidates, it is essential to select directors who have time to do the job . . . Every board must determine what time commitment it requires from each director.”

A board must go beyond simply counting the number of other public company boards on which the candidate sits. In The Activist Director, Mr. Millstein offers examples of questions, to be adapted to the experience of the candidate and the needs of the company, which boards can put to director candidates, including:

• How much time do you typically spend on your other boards?
• How much time each month can you commit to this board?
• What are some examples of your having to set priorities and multi-task?
• How have you resolved scheduling conflicts in the past with your full-time job and the boards you serve on?
• What other obligations do you have?

Ira M. Millstein is a senior partner at Weil, and The Activist Director (Columbia University Press, 2016) is available on Amazon.com.