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From Chapter 1

This is what happens when a corporate giant collapses and dies.

All eyes are on the CEO, who has gone without sleep for several days while desperately scrambling to pull a rabbit out of an empty hat. Staffers, lawyers, advisors, accountants, and consultants scurry around the company headquarters with news and rumors: the stock price fell 20 percent in the last hour, another of the private equity firms considering a bid has pulled out, stock traders are passing on obscene jokes about the company's impending death, the sovereign wealth fund that agreed to put in $1 billion last fall is screaming at the CFO, hedge fund shorts are whispering that the commercial paper dealers won't renew the debt tomorrow, the Treasury and the Fed aren't returning the CEO's calls about bailout money, six satellite trucks—no, seven now—are parked in front of the building, and reporters with camera crews are ambushing any passing employee for sound bites about the prospects of losing their jobs.

Chaos.

In the midst of this, the board of directors the supposedly well-informed, responsible, experienced, accountable group of leaders elected by the shareholders, who are legally and ethically required to protect the thousands of people who own the company are ... where? You would expect to them to be at the center of the action, but they are merely spectators with great seats. Some huddle together over a computer screen in a corner of the boardroom, watching cable news feeds and stock market reports that amplify the company's death rattles around the world; others sit beside a speakerphone, giving updates to board colleagues who couldn't make it in person. Meetings are scheduled, canceled, and rescheduled as the directors wait, hoping for good news but anticipating the worst.

The atmosphere is a little like that of a family waiting room outside an intensive care unit-a quiet, intense churning of dread and resignation. There will be some reminiscing about how well things seemed to be going not so long ago, some private recriminations about questions never asked or risks poorly understood, a general feeling of helplessness, a touch of anger at the senior executives for letting it come to this, and anticipation of the embarrassment they'll feel when people whisper about them at the club. Surprisingly, though, there's not a lot of fear. Few of the directors are likely to have a significant part of their wealth tied up in the company; legal precedents and insurance policies insulate them from personal liability…..

So they sit and wait-the board of directors of this giant company, who were charged with steering it along the road to profit and prosperity. In the middle of the biggest crisis in the life of the company, they are essentially backseat passengers. The controls, which they never truly used, are of no help as the company hurtles over a cliff, taking with it the directors' reputations and the shareholders' money. What they are waiting for is the dull thud signaling the end: a final meeting with the lawyers and investment bankers, and at last, the formality of signing the corporate death certificate s bankruptcy filing, a forced sale for cents on the dollar, or a government takeover that wipes out the shareholders. The CEO and the lawyers, as usual, will tell the directors what they must do.

From Chapter 3

According to an Air Force fact sheet, the F-22A Raptor fighter jet provides "an exponential leap in war-fighting capabilities that cannot be matched by any known or projected fighter aircraft." Retired General Richard Myers could be thought of in virtually the same way—as a new class of board member with the ability to stealthily navigate the corridors of government at high speed. He can deliver maximum impact on strategic and tactical missions, projecting Northrop Grumman power in the public, private, and military sectors of society. He also projects United Technologies power. And Aon Corporation power. And Deere & Co. power. He sits on all four boards.

From Chapter 8

Create a new class of public directors: Federally mandated reforms that open the board nominating process will necessarily create a demand for new director candidates. Who will they be? Narrow special-interest nominees likely won' get enough institutional support to win. Nor would they be ideal directors. Candidates drawn from the traditional inner-circle pools promise no meaningful change. We need a new kind of full-time director '"super directors," if you will. When he was the head of the SEC in the 1930s, William O. Douglas, the future Supreme Court justice, said that American business would benefit from a cadre of designated "public directors," who would comprise a minority on boards.

In 1991, professors Ronald Gilson and Reinier Kraakman of Stanford and Harvard law schools respectively, suggested that institutional investors should establish a nonprofit organization that could identify individuals who could become professional directors and who would serve on up to six boards at a time."

In 2003 , James Fanto, a Brooklyn Law School professor, picked up the thread when he called for a government entity that would create a pool of potential directors from diverse backgrounds. Corporations would be required to put three candidates (or a third of board whichever, was greater) from the pool on the ballot for plurality election, dropping an equivalent number of incumbents. One or more would also would serve on each of the major committees. This new class of super directors would undergo extensive training to cover the deficits current directors show in industry knowledge, financial and accounting skills, and the dvnamics of groups. They would be "professional" in the sense that they would be extensively trained in all the requisite skills.

Companies might even be required over time to add a majority of directors with such training. They might serve on two or three boards at once and receive a higher rate of pay than other directors because of their training and the higher level of contribution they would bring. They could make a good, though not extravagant, living, while working full-time.

Experience show that the addition of even a small number of such directors to boards could function like a trim tab on an aircraft rudder: a small change in one component can fundamentally alter the direction of the entire enterprise.