Do celebrity board members help a company? Surprisingly, recent research suggests that celebrity board appointments can add as much as 2% to the price of a company's stock. But what celebrity has time to deal with the serious business of corporate meetings and shareholder angst?
Following the failure of corporate boards to act during the financial crisis, the SEC warned companies about hiring board members just for name recognition alone. Famous people who fill board seats are now expected to be more than glamorous trinkets -- they are expected to understand their business and ensure that it fulfills its mission.
In an environment where corporations are being sued for losing shareholder value, the value of high-profile board members is starting to be determined more in terms of leadership or expertise in a particular area than in their public notoriety. While their initial appointment might give the stock a quick boost, their ability to do their job often leads to more sustained increases in profits.
Some celebrities have made excellent board members. "Many people with varied backgrounds can be good directors if they do the work and spend the time and ask the right questions," says Annalisa Barrett, Senior Research Associate for The Corporate Library. Here are eight well-known individuals from different backgrounds currently sitting on corporate boards:
Deepak Chopra, MD, author and lecturer
Board: Men's Wearhouse (MW)
As a prolific author with over 50 books and more than 100, audio and video titles which have sold more than 20 million copies world wide, Deepak Chopra can certainly help any corporation "get religion" in many of their business practices. Chopra's use of religious and spiritual teachings to get the most out of individuals can improve leadership, discipline, confidence and personal productivity among executives. And having such a spiritual figure to deliver a little prayer for profits now and then couldn't hurt either.
Julius Erving II, Hall of Fame basketball player
Fusion Telecommunications (FSNN)
After winning an NBA title with the Philadelphia 76ers and thrilling fans with high-flying slam dunks, Julius Erving II has proven he has more than just basketball skills by forging a successful private investment firm, The Erving Group. His ability to pick winning investments, such as his ownership stake in the Philadelphia Coca-Cola Bottling Company, would be welcome on any board. Erving is currently on the board of Internet voice and data solutions provider Fusion Telecommunications, and he has sat on the boards of a number of other companies, including Saks Inc. (SKS), WilTel Communications Group and Darden Restaurants (DRI).
Al Gore, former Vice President of the United States
Board: Apple (AAPL)
His unquestioned leadership in advancing new technologies and fighting for environmental causes makes Al Gore a powerful and influential member of the board. The former U.S. Vice President was a member of the National Security Council, chairman of the Space, Science and Technology subcommittee in Congress, and is a recognized expert on nuclear arms control and national defense. Having the negotiating skills required to serve is impressive, but Gore is not without his creative side. His remarkable film An Inconvenient Truth, which won Academy Awards for best documentary and best original song, show that he is capable of using more than one medium to get a point across.
Wayne M. Rogers, former actor
Vishay Intertechnology Inc. (VSH)
You wouldn't expect a fun-loving practical joker like Dr. Trapper John McIntyre from the 1970s TV sitcom M.A.S.H. to make it on a corporate board, but actor Wayne M. Rogers, who played that role, now plays a very different one on the board of semiconductor manufacturer Vishay Intertechnology. Rogers has evolved from an actor to a stock commentator and analyst, and now runs his own investment management firm, Wayne M. Rogers & Co. His knowledge of market trends, investment strategy and company analysis could help a company avoid financial mishaps.
Garry L. Maddox, former professional baseball player
Board: The Federal Reserve Bank of Philadelphia
Winning eight Gold Glove awards as a center fielder for the San Francisco Giants and Philadelphia Phillies proved Garry Maddox was one of the best in baseball. Now he's proving to be one of the best in business as CEO of A. Pomerantz & Co., an office furniture store, and president of World Wide Concessions Inc. His knowledge of what makes small businesses thrive and grow makes him an effective member of any corporate board.
Priscilla Presley, actress, author
Board: CKX, Inc. (CKXE)
Understanding what it takes to keep a brand thriving is a strength Priscilla Presley brings to a board of directors. While it's not surprising that the chairperson of Elvis Presley Enterprises has proven her business savvy by turning Graceland into a multimillion dollar tourist attraction for her parent company/business partner, Presley is doing more than extending the legacy of her famous husband Elvis. She also adds star power and marketing skill to CKX's other properties, which include American Idol, Do You Think You Can Dance and an 80% interest in licensing rights to the name and likeness of Muhammad Ali.
Lynn Swann, Hall of Fame wide receiver
Board: HJ Heinz (HNZ), Hershey Entertainment and Resorts, Harrah's Entertainment, Transdel Pharmaceuticals (TDLP)
The ability to exude the leadership and toughness it takes to win four Super Bowl rings in the National Football League is no doubt a compelling factor in any corporation's decision to enlist Lynn Swan onto its board. The Hall of Fame wide receiver of the Pittsburgh Steelers has scored many victories in business since leaving the game, enjoying a 29 year career as a successful broadcast analyst for ABC Sports, creating his own consulting and marketing firm, Swann Inc., and currently serving as managing director of Diamond Edge Capital Partners, a New York finance company. Who says jocks aren't smart.
Nancy Lopez Knight, Ladies Professional Golf Association Hall of Famer
Board: J.M. Smucker (SJM)
Bringing the same concentration and poise it takes to sink a 60 foot putt to solving corporate challenges is the type of contribution golf Hall of Famer Nancy Lopez Knight can make to any board. The president of Nancy Lopez Enterprises also co-founded the Nancy Lopez Golf brand of women's golf clubs and accessories, capitalizing on her success at winning 48 career titles, including three majors, on the Ladies Professional Golf Association tour.