From a corporate governance perspective, it's unclear what works best in terms of board composition. The conventional wisdom is that independent directors should predominate, especially on audit and compensation committees, and perhaps even nominating committees. Many agree the CEO should not also serve as chairman.

There's also a budding movement underway, according to the New York Times, to add more operational experience to the board. It notes the freshly reconstituted Goldman Sachs board, which includes Lakshmi Mittal, the head of the global steel maker Arcelor Mittal; H. Lee Scott, former CEO of Wal-Mart; and James  Schiro, former CEO of Zurich Financial Services.

It makes sense to add people who have run companies before. That these CEOs agreed to the director job is just as impressive, as the directorships are not the cakewalk they once were.

Unfortunately, operational experience is no guarantee of success. The board can never run the company for the managers. And operational experience may not necessarily translate into good director qualities. It may be that a firebrand VC investor or a consultant will be more adept at gently stepping on toes to get the information he or she needs to effectively monitor the company.

That said, operational experience cannot hurt. "The boards of Bank of America, Citigroup, Morgan Stanley and Goldman may be more focused these days on risk and compensation, but their directors largely have similar backgrounds. Adding two or three board members with more diverse backgrounds could spur more critical thinking--a type of introspection that was absent before the crisis."

For more:
- here's the article

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