Why U.S. Corporate Boards Don’t Include Workers
&quot;A board of three is ideal. Your board should never exceed five people, unless your company is publicly held. (Government regulations effectively mandate that public companies have larger boards—the average is nine members.) By far the worst you can do is to make your board extra large. When unsavvy observers see a nonprofit organization with dozens of people on its board, they think: “Look how many great people are committed to this organization! It must be extremely well run.” Actually, a huge board will exercise no effective oversight at all; it merely provides cover for whatever microdictator actually runs the organization. If you want that kind of free rein from your board, blow it up to giant size. If you want an effective board, keep it small.&quot;<p>— Peter Thiel<p>More board members may increase intransigence, <i>decrease</i> oversight (cover over who is <i>really</i> making the decisions and who is not), and turn US corps more bureaucratic.<p>Many totally rational worker ideals (keep comfy job) are often very opposed to a company&#x27;s ideals (upgrade technology, take new risks, automate) that may disrupt current workers in favor of fewer workers or different workers. Boards beholden to current workers may sacrifice a lot of progress to keep things comfy, at the expense of future workers and jobs.<p>I get why, as this article describes, it happens in Germany and is suggested for the US. But on the face of it that mandating board composition is probably not the best way to help workers in companies. There is probably some better way that throws less sand into gears, that involves fewer attempts to mortgage the future of a company for its present workers, etc. Obviously it &quot;works&quot; in germany, for some amount of &quot;works,&quot; but it should need no explanation that US companies as a whole are able to move faster, and in high tech, often with higher wages(!!) than in Germany.<p>Sorry that my perspective is dragging this in a tech centric, but everyone should ask themselves: Why <i>are</i> tech workers wages <i>so low</i> in Germany compared to the USA, if they have workers on the board? It seems unaddressed in this discussion so far, which I think is a great discussion to have. But lots of people so far are acting like its obvious that the German model will lead to higher worker salaries but its... not true already in Germany, for tech at least.