On a similar theme on Wednesday evening, I sat in briefly on a seminar run by Board Intelligence, one of the best of that breed of advisory organisation, where various people from business backgrounds talked about ways the running of our companies might be improved.
One of the observations was that boards become less and less effective as they get bigger, because beyond a certain size directors will assume someone else around the table knows what is going on, and therefore they do not feel the need to understand the issues themselves. The chances are then that no one understands.
Six is the optimum number and certainly no more than eight – which perhaps explains why, with about 30 people attending Cabinet meetings, we are so badly governed. It also explains, of course, why the big boards of banks were hopeless at understanding and controlling the risks in those businesses.
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