Outside Directors in Private Companies

By Valerio Giannini

One of the benefits of private companies is that compared to public companies they are pretty
much left alone. So, why would a private company want to add outsiders to their board of
directors?

The simplest answers are a) outside directors can be a low cost, low risk but valuable resource;
and b) outside directors are on your side, unlike numerous outsiders to whom even a private
company must answer, e.g. the IRS, OSHA, banks and insurance companies, not to mention
the EPA, FTC, FDA, etc.).

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