Apple CEO Tim Cook is looking to expand his company's board of directors, according to a report from The Wall Street Journal. Citing unnamed sources, the paper said that Mr. Cook is "actively seeking new directors" to add to the eight-member board, a remarkably small board for a company as large as Apple.
Shopping for Apple
Apple's board has also been quite stable. Hand-picked by the late Steve Jobs, four members have been served for more than ten years. Two of them—former Intuit CEO Bill "Coach" Campbell and current chairman and CEO of J. Crew Group Millard Drexler—have been there since shortly after Steve Jobs returned to Apple in the late 1990s.
Mr. Jobs picked his board members for both what they could bring to Apple and because he knew they would support him. As Apple grew to become larger and larger and larger, however, the board didn't grow with it.
For instance:
- American car company Ford had global revenues of US$147 billion in 2013. That company has 16 members of its board.
- IBM had revenue of $100 billion in 2013. It's board of directors has 12 members.
- Berkshire Hathaway had global revenues of $95 billion in 2013. Counting rock star chairman Warren Buffet, it has 14 board members.
- Microsoft has revenues of $77.7 billion in 2013. It has ten board members.
- Even Google, a company known for being set up to do exactly and only what founders Larry Page and Sergey Brin want, has ten board members. Its annual revenues for 2013 clocked in at $56 billion.
- Apple, the biggest of them all, had revenue of $171 billion in 2013, and the company has eight directors on its board.
Under Steve Jobs, this was as much about focus as it was control, but Apple has grown considerably since his last year of life, when he was quite ill. He was famous for keeping Apple as small as possible, and for keeping the company focused on as few things as possible.
In an in-depth profile of the many ways Apple has changed under Mr. Cook, The Wall Street Journal said this has been changing. Tim Cook has been open to letting more products and ideas receive attention. The article quoted unnamed sources who had both positive and negative things to say about this, but the reality is that Apple is so big, and makes so much money, the company has no choice but broaden its focus.
With that comes an expanded board. Boards of directors are supposed to serve as oversight for a company's executive leadership. Their job is to look after the interests of the shareholders and protect those shareholders from the excesses of its executives and potential mistakes. They advise the CEO, and they often bring diverse backgrounds and skill sets to that job of advising.
In Silicon Valley, CEOs often have more control over their boards than the other way around. This is especially true for companies like Apple that are led by visionaries. Steve Jobs's board was there to help him, not control him, and keeping it small was all part of that process.
With great power comes great responsibility, however, and Mr. Cook is apparently ready to expand the team whose job it is to advise him. The Journal's didn't specify how many members Mr. Cook intended to add or what skill sets he was looking for.
If I were a betting man—please note that I am a betting man—I would put my money on Mr. Cook using an expansion to bring more diversity to the board. Not just in terms of sex and race, but in terms of background. I would expect to see industries other than technology represented, including fashion, music, and TV/movies. Energy is a possibility, too.
It's fashion and culture, however, that I most expect to see added to the board. Mr. Cook has been adding culturally-aware executives to Apple for the past two years, and I think the board of directors will see a similar push.
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