The Wall Street Journal asked recently whether corporate executives are overboarded. In a report by research firm Equilar Inc., the Wall Street Journal reports that approximately 118 Fortune 1000 CEOs sit on at least three boards of other corporations, including there own. This “overboarding” purportedly overstresses CEOs and makes it truly difficult for the leaders to concentrate on their day jobs. Board positions last year required an average commitment of 228 hours, with pay exceeding $232,000 in 2010.
From the Wall Street Journal: "With stricter regulations and greater legal scrutiny increasing the time a board seat demands, certain investors are questioning the value of CEOs serving on multiple boards. Critics say many senior executives are too "overboarded" to do their jobs and monitor management elsewhere. 'Boards are facing unprecedented challenges, and we need CEOs to focus on their day job,' says Anne Simpson, head of corporate governance for the California Public Employees' Retirement System, the nation's biggest public pension fund. 'We do not like to see a CEO getting overloaded.'
In a related story, critics of Disney's recent move to elevate CEO Robert Iger to Chairman of the Board indicates that institutional shareholders are concerned with not only overstressing CEOs, but with concentrating too much power in one leader. Some Disney shareholder are aghast to see the Disney board return Iger to the same position that was held by Michael Eisner (CEO and Chair of the Board) when he entered into the infamous Michael Ovitz employment contract that led to so much pain for Disney and its shareholders.
After Disney announced its strategic decision to give Iger the additional role as chair, while also paying him over $31 million dollars for 2011, some of its shareholders cried foul, including Institutional Shareholder Services Inc. Disney nonetheless believes this move is in the company’s best interest. However, Institutional Shareholders Services issued a report disputing that combining so much power in Iger was in the shareholders’ best interest because, in 2004, the company decided to end this practice of dual responsibilities after the shareholders protested this structure, causing Michael Eisner to give up his chairmanship. ISS alleges this latest reversal compromises the independent board leadership.