By Susan Greco
Even as more boards fill up with outsiders, some businesses just won't give up their
company directors. What do insiders bring to the boardroom that outsiders don't?
Jim Ringler, an independent director on the board of The Dow Chemical Company, the $40
billion chemical manufacturer in Midland, Michigan, says that directors at other companies look
at him strangely when the conversation turns to board insiders. Dow has five, on a board of 14.
"They look at me like, 'How'd you get away with that?' " Ringler says. He understands their
surprise. The other boards he sits on--NCR Corporation; Autoliv, Inc.; and FMC Technologies,
Inc., among others--don't have nearly so many insiders. "But it works in Dow's case," he says.
When you give insiders some autonomy, "it works damn wonderfully."
United Parcel Service, Inc., the Atlanta-based $36.6 billion package delivery business, has four
insiders on its nine-member board, including former chief executive Jim Kelly and three current
officers. Independent director Gary MacDougal cites the company's nearly century-old employee
ownership ethic as a chief reason, saying the board wants to be "respectful" to UPS's culture.
Last year Burlington Resources Inc., a $5.6 billion oil and gas producer in Houston, actually
added two company managers to its 15-member board--the chief operating officer and the chief
financial officer. Previously the only insider on the board was the CEO. "No boards I'm aware of
see bringing on insiders wholesale as a good thing," says Barbara Alexander, an independent
director at Burlington Resources. But adding one or two shouldn't be taboo either, she says.
Burlington Resources, UPS, and Dow are exceptions to the latest trend in corporate governance.
Edward Lawler III, who conducts research on boards at the Marshall School of Business at the
University of Southern California, says insiders are fast becoming "a disappearing breed." These
days, only one insider h