Board 3.0: What the Private-Equity Governance Model Can Offer Public Companies

This article makes the case for a new model for public company boards, one that we are calling Board 3.0. Today's dominant public board model, here called Board 2.0, is best understood as the outcome of a now mature organizational experiment that, after its start some 40 years ago, succeeded in replacing a prior organizational form that had fallen short. Board 2.0, which we also refer to as the "monitoring board," is dominated by part-time "independent" directors who are nevertheless heavily dependent on company management for information and are reliant on and influenced by stock market prices as the primary measure of managerial performance.