Two New Members to Help Busy Board

Two new members have joined the Microsoft board of directors, bringing the total number of directors to 10. Former AT&T Vice Chairman Charles Noski and BMW Chairman Helmut Panke add geographic diversity and business experience and increase the ratio of outsiders to insiders, making it easier for the board to overrule the company’s executives to protect shareholder interests, if necessary. The additions cap a busy year for the board, which also established two new committees, evaluated and approved a major change to equity-based compensation, and ratified new standards of conduct for Microsoft employees.

Strengthening the Board

A board of directors is supposed to ensure that a company’s executives are acting in the best interests of its shareholders. Boards with a high ratio of outsiders (members who have no formal connection to the company outside board membership) to insiders are more likely to be an effective forum to discuss and evaluate executive decisions, rather than serving as a rubber stamp.