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Age Limits Are Arbitrary

Age Limits Are Arbitrary
(c) Copyright 2006 by Gerald Czarnecki - All Rights reserved

In a recent article in BussinessWeek, writer Peter Burrows
interviewed the CEO of Network Appliance, Daniel
Warmenhoven. He shared his views on the current state of
corporate governance, the consequences of SOX and his
opinion that to set a 70-year age limit for directors is not
a good practice. Dan Valentine, the highly respected venture
capitalist who was an early investor in Apple, is now over
70 and due to his age will not stay on as a director at
Cisco. He is also on the board of directors at Network
Application, and there the age issue is not an issue at all
according to Warmenhoven:

“The only public board he’ll remain on is NetApp. Why would
you want to get rid of someone with his talent and
experience? If he was senile, that would be one thing. But
he’s still one of the sharpest minds you could ever meet,
and he has been through every kind of circumstance you could
imagine, three or four times and lived through them.”
http://www.forbes.com/home/columnists/2005/07/27/
warmenhoven-opinion-regulatoin-cz_dw_0726compliance.html

I concur with Warmhoven that age should not determine
retirement as much as the question of whether there is still
a “fire in the belly”. Unfortunately, the hidden reason for
most board policies on age or term limits is not related to
the core belief that people should leave based on those
criteria. More often that not, the real reason is that the
board finds it difficult and unpleasant to fire an
individual who really has become unproductive. If boards had
effective evaluation processes for each director, it is much
more likely that these limits would be viewed as
undesirable.


About the Author: Gerry Czarnecki promotes excellence in leadership through
activities as an author, public speaker & consultant. He
also trains boards of directors in corporate governance best
practices. For leadership books & programs go to
www.the-czar.com; for his business consulting & governance
training visit www.deltennium.com




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