The Best in Boardroom Intelligence

Originally posted in the Directorship on September 1, 2008.

From The Bible to biography, the editors of Directorship spent part of the summer distilling the essence of printed wisdom into a collection of classic works that we believe are as useful in the boardroom as they are in the study. First, the absolutes that no library would be complete without: Sun Tzu’s The Art of War, The Bible, and the complete works of the boardroom bard, Shakespeare.

In its own timeless way, each work provides useful insights into the logistical, ethical, and emotional complexities of leadership. And if you want to glean insights into the mysteries of human nature, Shakespeare has no equal. For instance, want to know when the Bard predicts the credit crisis will end? “Tomorrow, tomorrow, and tomorrow.” And what the regulators are reminding us of now: “All that glisters is not gold.” Finally, the verdict on boards and management: “Lord, what fools these mortals be!” But there are other works that our editors also deemed to be eminently worthy of consideration.

Reminiscences of a Stock Operator by Edwin Lefevre (1923) is the fictionalized biography of Jesse Livermore, a manipulator who was perhaps the original rogue trader and who operated in the wild days at the turn of the 19th century before regulation. Lefevre was among the first business writers to combine a riveting story with a lifetime of practical business and market lessons.

The Intelligent Investor: A Book of Practical Counsel by Benjamin Graham (1949). Warren Buffett called it “by far the best book on investing ever written.” We can’t do better than that.

The Great Crash of 1929 by John Kenneth Galbraith (1955) is as concise as it is insightful, and has never gone out of print. Why? “Every time it has been about to pass from print,” the late Galbraith himself wrote in 1997, “another speculative bubble…has stirred interest in the history of this, the great modern case of boom and collapse.”

The Effective Executive by Peter Drucker (1966). As Fortune magazine wrote in a 2005 “smartest books” list: “Before you can manage anyone else, you’ve got to learn to manage yourself. In this slim volume, Drucker tells you how.” The original management guru’s lessons are, like most of the works listed here, timeless.

The Go-Go Years: The Drama and Crashing Finale of Wall Street’s Bullish 60s by the late New Yorker writer John Brooks (1973) examines the 1960s mutualfund boom and is, to quote a cover testimonial provided by Galbraith, “a small classic in the history of financial insanity.”

In Search of Excellence by Thomas Peters and Robert H. Waterman (1982) is worth reading for the chance to consider what made some once-great firms disappear (Digital Equipment, Wang Labs) and others (GE, Wal-Mart) carry on.

Barbarians at the Gate: The Fall of RJR Nabisco by Bryan Burrough and John Helyar (1990) reads with all the suspense of a mystery and was praised in its time for having “all the stuff of great business journalism: skullduggery, cigars, trophy wives, and enough greed to sink Wall Street.” Made into a movie, it launched a new genre: the business thriller with CEOs cast as either imbeciles or bad guys.

“A big, hairy, audacious goal,” a phrase coined in Built to Last by James Collins and Jerry I. Porras (1994), also applies to the story. The writers research and find what makes great companies great and tell the success stories of such firms as Boeing, Deloitte & Touche, and Sony. Another nugget they dispense: be a clockmaker, not a timekeeper.

Here’s a question: Why read about Buffett when you can read Buffett? While the sage has never written a book, Lawrence Cunningham compiled the best of Buffett’s annual shareholder letters from 1976 to 1996 into The Essays of Warren Buffett: Lessons for Corporate America (1997). Take notes.

If there is to be just one memoir, make it Katherine Graham’s Personal History (1997). Thrust reluctantly by the death of her husband to the top of The Washington Post Co., she tells the story of how an immensely wealthy but sheltered, naive, shy, stay-at-home mom became the most powerful woman in American journalism. It is profound in the questions it raises about overcoming one’s perceived personal limitations. She’s surrounded by a superb cast of brilliant editors, friends, rogues, business leaders, and politicians.

The “tipping point” is when fads turn to trends. (Today it’s known as viral marketing.) Writer Malcolm Gladwell illustrates the phenomenon by showing us what best-selling novels, crime waves, and yawning have in common in The Tipping Point: How Little Things Can Make a Big Difference (2000).

Roger Lowenstein’s clear writing style serves readers well whether they’re reading his bio of Buffett; his most recent work, “As America Aged;” or his classic: When Genius Failed: The Rise and Fall of Long-Term Capital Management (2000).

Risk managers take note: Hedge-fund manager turned author Nassim Nicholas Taleb claims it’s impossible to understand or predict markets. In Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets he argues that it all comes down to luck. He continued the creed last year with The Black Swan, destined to become another modern classic.

Leading Quietly: An Unorthodox Guide to Doing the Right Thing by Joseph L. Badaracco (2002). “Finally,” one reviewer wrote, “an ethics book for people who live in the real world who want to ‘do the right thing’ and keep their job.

It’s been three years since Freakonomics by Stephen Dubner and Steven D. Levitt (2005) hit the best-seller’s list and drew eye-opening correlations— for instance, comparing the corporate hierarchy of McDonald’s to an inner-city drug gang (in both, the bosses make big money while legions of workers earn minimum wage or less)–while giving the normally staid field of economics some sizzle.

Nowhere is the adage about keeping your friends close and your enemies closer better illustrated than in Doris Kearns Goodwin’s Team of Rivals: The Political Genius of Abraham Lincoln (2005). Although not a business book per se, there is more to be learned about building an effective team from the 16th president than any modern how-to business book.

For pure inspiration: They Made America: Two Centuries of Innovation from the Steam Engine to the Search Engine by Harold Evans (2006) profiles 53 of the top innovators in history.

Even if a tome on corporate governance is something you thought only your nominating chair should read, you may find it well worth the time to read The New Corporate Governance in Theory and Practice by UCLA professor Stephen Bainbridge.

Finally, make time for Harvard professor Bill George, who created a sensation with Authentic Leadership (2003) and True North (2007) and has just published a third book: Finding Your True North: A Personal Guide. See, this isn’t just a book, it’s a program, and George will gladly steer you through.