Autor: Alfredo Enrione – Director del Centro de Gobierno Corporativo y Sociedad
The press release practically writes itself: “Former President María González Joins TechCorp Board.” The market response is immediate—stock price jumps 3%, analyst coverage increases, and the company’s profile soars. Six months later, González has attended two of four board meetings, contributed little to strategic discussions, and spends most sessions responding to emails.
Welcome to Latin America’s most expensive governance theater: celebrity director recruitment.
The Prestige Premium
A 2023 study of 500 Latin American companies reveals a troubling pattern: boards with high-profile political or business celebrities underperform their peers by 8% over three-year periods. Yet companies continue paying premium fees for marquee names, confusing reputation with contribution.
The celebrity director phenomenon reflects a fundamental misunderstanding of governance value creation. Companies hire former presidents for their connections, ex-CEOs for their prestige, and famous entrepreneurs for their innovation credentials. What they often get instead are over-committed, under-engaged directors who treat board service as networking rather than governance.
The Attention Economy
The mathematics of celebrity director effectiveness are brutal. A former minister serving on eight boards cannot provide meaningful oversight to any single company. A renowned CEO managing their own firm plus six directorships has approximately four hours monthly per board—barely enough to read materials, let alone engage substantively.
Yet boards continue this expensive charade because celebrity directors solve the wrong problem. They enhance external perception while degrading internal governance. They attract media attention while distracting from strategic focus.
The Cultural Amplifier
Latin America’s relationship-based business culture amplifies the celebrity director trap. Having a former president on your board isn’t just about governance—it’s about social capital, regulatory access, and competitive signaling. This creates perverse incentives where boards optimize for external prestige rather than internal performance.
The result is what governance researchers call “board theater”—impressive cast, weak performance.
The Opportunity Cost
Perhaps most damaging is the opportunity cost. Every celebrity director represents a missed chance to recruit someone who would actually improve decision-making. Instead of the former finance minister who attends half the meetings, you could have the former CFO who asks tough questions about working capital management.
The irony is stark: companies sacrifice governance quality for governance optics, then wonder why their strategic execution lags competitors with less famous but more engaged boards.
The Performance Alternative
The highest-performing boards I study share a common characteristic: they hire for contribution, not recognition. These boards recruit directors based on specific expertise gaps, cultural fit, and demonstrated commitment to governance excellence.
Three principles guide their selection:
The Contribution Test: Every director must provide unique value that improves decision-making. Celebrity status doesn’t qualify unless accompanied by relevant expertise and genuine availability.
The Engagement Requirement: Directors who can’t commit meaningful time shouldn’t be recruited, regardless of their profile. Better an unknown director who prepares thoroughly than a celebrity who phones it in.
The Chemistry Factor: Board dynamics matter more than individual credentials. A less famous director who enhances group deliberation creates more value than a celebrity who dominates airtime without adding insight.
Reflection Questions for Your Nomination Committee:
- Do your directors attend because they’re committed to your company’s success, or because board service enhances their personal brand?
- When recruiting new directors, do you prioritize what they can contribute or who they can impress?
- How do you measure director value—by their external profile or their internal impact?
P.D. The best directors aren’t necessarily the most famous ones—they’re the ones who make everyone else better at being directors.
