US corporate boards 'are too large'

A business expert has claimed the size of the board at many US companies could harm their ability to make effective decisions.

Writing in the Wall Street Journal, senior lecturer at Harvard Business School Robert Pozen said large organisations need a new approach to boardroom structure to avoid the recurrence of "corporate governance debacles" such as the Enron scandal.

He pointed out that the average board size for S&P 500 firms was almost 11 in 2009.

Mr Pozen believes this number is too high because it can slow down decision-making processes and result in some members relying on others to take the lead on particular issues.

"Psychologists such as Harvard's Richard Hackman suggest that groups of six or seven are the most effective at decision-making," he commented.

Mr Pozen explained that groups of this size "are small enough for all members to take personal responsibility for the group's actions".

He also said the majority of board members should have experience in the company's main area of business, while also acknowledging the need for a "generalist" to provide perspective and an accounting specialist to lead the audit committee.

A recent study by The Corporate Library revealed a 1.6 per cent increase in total annual compensation for the chief executives of S&P 500 companies in 2009.