When making investment decisions, investors tend to give primacy to who the CEO is and who may be the successor, not to who sits on the company’s Board of Directors (the «Board»). Typically, the CEO is perceived as more determinative for company success than the Board or any of its members.
At the same time, who serves on the Board is far from inconsequential. First, in many jurisdictions the Boardplays a final or at least a critical role in selecting and dismissing the CEO. Wrong decisions here could lead to a low-achieving or even value-destroying CEO being chosen or tolerated.
Second, with the duty to provide oversight, the Board has to perform a daunting ongoing balancing act, often under shifting business conditions.