Attributed to Woody Allen, this myth clearly bears investigating. As we saw in Part I, the “showing up” factor is a powerful tool, flying in the face of mathematical modeling and elaborate market plans, and plenty of evidence backs it up.

Part I extolled the virtues of many hugely successful companies that appear to simply be there in the market. But, only a handful are so fortunate. Just showing up may create more problems than it solves. With all of the insider trading issues and ethical lapses of corporate giants, have you ever wondered what role their Boards played? Did the boards of General Motors (GM) and Toyota (TM) play a role in resolving their ethical dilemmas? If they played no role, then just showing up does not yield success. A report summarized in The New York Times implies that GM’s ignition switch problem was very complex and no clear resolution was available because of the length of the effort to solve the problem and the complexity of the analysis involved. The Board was not able to speed up a solution or organize a detailed fix. Thus having a Board – the showing up part of the myth – may not relate to achieving a solution at all.

Another piece in the Times indicated that the giant’s law team hid the facts. How could Board members claim to be ethical if dangerous conditions are hidden and they lack the capability to ferret out wrongdoing. Maybe 80% of failure is just showing up.

Other Boards have been exposed as do nothings or rubber stamps, never delving into problems or creating problems of their own. Microsoft (MSFT) and Yahoo (YHOO) have been accused of somnolence. Yahoo slipped from the top spot among search engines. Its situation is so bad, they do not even compete with Google (GOOG) , which far surpasses them in wealth, technical capability and market share. Didn’t the Board see this happening? And, didn’t they offer solutions?

Despite its massive money stash ($85 billion cash and short-term investments), Microsoft has stood on the sidelines on mobile technology. Of course, this may be by design. They do not need to take risk. However, the industry is swirling around them and they are not terribly active in some new areas of technology. One would expect that Board members would propose new initiatives and not merely show up and take no action. The recent addition of a wireless specialist, John Stanton, may change the character of the Board. The technology giant may leap forward in the mobile world.

On the other hand, Microsoft may be so late to the mobile world that it cannot scrape up much success. It may also be planning some kind of broader technology than anyone else is offering – mobile thinking? All right, the Myth Buster made that up, but someone must be thinking that way: A mobile device with the power of a desktop, the entertainment value of a television, the connectivity of a phone and – the ability to think. Whatever Microsoft may have in mind, its mobile appetite will be watched closely as new ideas are floated. Maybe, just maybe, they are moving in a new direction.

How to Spot a Dysfunctional Board

The Myth Buster wonders what causes a Board to be dysfunctional. Here are two characteristics. First is external dissension. The worst case was Hewlett Packard (HPQ) with public feuding and wire tapping. The second trait is a board that allows the company’s position to erode on their watch. Yahoo is the most egregious example. Bad results indicate dysfunction.

Board chemistry is difficult to manage. Think about what will happen at Microsoft. The new mobile expert may become a lightning rod as the lone defender of mobile technology in a company that has not launched major products in the field. His role may be to argue that mobile is worthwhile but the argument may not lead to action. Conversely, he may become the hero who moved the giant into the race. That will only happen if the members have that elusive quality of good chemistry.

Strategic Focus

Effective Boards should focus on strategic issues rather than day-to-day operations. Functional Boards resemble baseball managers. They make the big decisions but the players win or lose the game. If you look at the standard Board committees — Audit and Finance, Compensation and Leadership, Nominating and Corporate Governance – it is a wonder that any new ideas are launched. These committees sound like the showing up part of the myth.

An advocate of typical Board structure might point out that faulty quality or poor profits will show up in an audit. Yes, but the audit takes place after the fact. By the time the audit committee sees the problem, it may be too late. Many companies have an Executive Committee. The immediate problem is that such a committee, which may make the critical decisions, is a subset of a group that is already few in number. How would Microsoft really get into the mobile field if its mobile lone ranger is not on the Executive Committee? Even if he joins the select group, the decision will be controlled by a very small group.

Chemistry is also difficult in finding the right level of arguing. No arguing – the rubber stamp – is dangerous as is too much arguing. The interplay must be critical. Famous Board explosions – such as the removal of Steve Jobs at Apple (AAPL) – may be the right move from the Board’s point of view. At least the Board is struggling with decisions and fighting to hold down explosive personalities. In the long run, this outperforms a rubber stamp.

The Effects of the Rubber Stamp

The downside of merely showing up may be a rubber stamp – a miserable condition for a board. The Myth Buster has seen a few! Rubber stamps and liquor make a snug fit. In one case, the cocktail hour before the Board meeting always stretched into two or two and a half hours – in the president’s private bar. And, he had quite a collection. What looked like glasses of soda were tumblers of Scotch, single malt, of course. This led to two outcomes. They did an awful lot of talking at the meeting, but not about the topics on the agenda. They also had their rubber stamps ready for votes. To be fair to the merry group, several days after a meeting in which they could not determine if they had run in the red or the black months after the end of the fiscal year, the members sobered up and asked probing questions about their “fiduciary responsibility.”

This intriguing myth leaves one annoying concern. In last month’s edition, Mars was identified as the king of chocolate. And not one Snickers bar was sent to the Myth Buster to verify what was written. Budweiser Beer (BUD) sent no samples either. The nerve of some companies!

Everyone who shows up is not successful. Some show up and fall on their faces, such as those embroiled in ethical problems or those who vote Aye while the company’s fortunes slip away. This month saw the myth in a different light. Next month, the Myth Buster will continue the investigation into the intriguing myth: 80% of Success is Showing Up.

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Michael McTague, Ph.D. is Executive Vice President at Able Global Partners in New York, a private equity firm.