Board of Directors System Is Out of Date

In the past, it was necessary to put up with the board of directors system because of the lack of technology to involve investors. While times have changed and technology has caught up with the needs of the process, the board of directors system has failed to change to take advantage of these new opportunities. Certain aspects of the current system made sense as recently as 10 years ago, before the Internet granted the average shareholder access to immediate decisions. It doesn't make sense any longer.

Given the benefits of new communication technology, it seems reasonable that the system be revised so decisions concerning executive compensation, board membership, as well as mergers and acquisitions, be made immediately accessible to investors. Change would need to be radical. As a suggestion, it might be time to remove term limits from board seats, to reduce board size to eight members and to allow anyone (or any group) with 12.5% of the stock access to one board seat to ensure full representation of shareholder desires.

The current problems stemming from the board of directors system demand solutions similar to those offered here. What is required is a revision that creates direct linkage between shareholder representation and board representation. Whatever is done to revise the system, we must first acknowledge that the current system of the board of directors has failed and, as a result, corporate incompetence and greed has been allowed to flourish.