Can a director sit on multiple boards?

by Dan Byrne on Dec 9, 2022

Sitting on multiple boards

Can a company director sit on multiple boards? The answer is yes. Should someone sit on multiple boards? The answer is, it depends.

There are some dos and don’ts around this behaviour. The number of boards you sit on depends on several external factors, including your free time, your role on each board, and the companies you serve. 

Why do people sit on multiple boards?

Supply, demand, and availability. 

Board members are natural experts in their field. The number of companies looking for this expertise will usually outweigh the number of ideal candidates. 

Whether it’s cybersecurity, PR, HR, ESG or just plain governance, a candidate could easily get approached by three companies at once. There’s no rule which says they can’t accept them all.

The benefits of sitting on multiple boards

We can split this into benefits for the director and the organisation.

For the director:

  • They can expand their horizons, uniquely offering their expertise with each company. This is especially true if the companies vary in size and industry. Here is where true personal growth will occur. 
  • They have more extensive networks of colleagues. 
  • Balancing multiple roles, they will undoubtedly learn the essentials of time management at the board level.

For the company:

  • The company has a director who is experienced and active across the industry. This often translates to up-to-date, informed advice regarding essential business decisions. 
  • The company has valuable insights from other markets – things that they could incorporate into their strategy.

Should I sit on multiple boards?

As you’ve seen above, there are advantages. And sitting on multiple boards is long-time industry practice, so if you did it, you wouldn’t be the first. 

Ultimately though, the answer can only be ‘yes’ as long as you don’t risk your own well-being or that of the company.

Dangers of sitting on multiple boards: overboarding

Sitting on various boards, you should ask yourself this: how many is too many?

Over-boarding’, as it’s often called, is when the number of boards becomes too much of a burden for the director to offer significant expertise. 

It’s a gripe for many companies and investors because they know they’re not getting a director’s full attention.

For example, BlackRock – the world’s largest investor – has specifically issued guidance against over-boarding because they don’t want the director stretched too thin. 

Here are some signs that you’re over-boarding:

  • Your colleagues have a lot of criticism about your capacity or level of engagement.
  • You find you can’t catch a break.
  • You’re unable to free up time during a board emergency.

Dangers of sitting on multiple boards: conflict of interest

What happens when you want to sit on two boards belonging to competitor companies?

Legally, nothing is preventing you from doing this. But it will rarely be allowed.

Companies will not want a director who advises and crafts strategy for a competitor. So, in any normal circumstances, you would simply not qualify as a candidate for that second board. 

If, however, you’re on two boards and begin to suspect a conflict of interest in this way, flag it at once. As a director, it’s your job to flag any conflicts of interest, and the chair will decide what to do.

In summary

Sitting on multiple boards can be a positive experience, but only if you do it correctly. 

Accept directorships that complement your career path and still leave you with a manageable diary. Avoid directorships that overload your diary or cause a conflict of interest.

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Diploma in Corporate Governance

Enhance your career as a director. Develop the practical knowledge, insight and global mindset to be a great board director.

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