Boards are sometimes described as institutions designed to provide the CEO with advice.  To the extent they filled with knowledgeable people from different backgrounds, boards stand ready to counsel and assist CEOs in what can often be very challenging environments.

There may be some boards that play this role.  But boards that give advice can also fire the CEO.  CEOs wanting to retain their post have a rational incentive to "neutralize" the board.  This entails a preference not for directors who provide the best advice, but for those who will be the least likely to intervene in corporate affairs.  In short, directors are often picked not for their diverse perspective but for their "reliability."  This is discussed at some length in Essay: Neutralizing the Board of Directors and the Impact on Diversity. 

Picking reliable directors, however, is not without limits.  Most boards of public companies consist of independent directors.  Thus, to the extent the CEO prefers reliable directors, these individuals must be both reliable and independent.

What are some categories that meet both tests?  Friends of the CEO.  As we have noted, the definitions of director independence used by the stock exchanges do not require boards to screen for friendship.  To the extent boards contain directors who are friends of the CEO, they will presumably be less likely to intervene in the affairs of the company (something that can include firing the CEO).

Another category, however, are executive officers of other companies, particularly other CEOs.  A CEO of another company is likely to be less interested in intervention.  For one thing, he (and rarely she) does not want his/her own board to intervene.  The CEO as director probably takes that same philosophy to other boards where he/she sits as a director.  

These directors may be common but pressure is growing to make them a little less common.  According to an article in the WSJ, 118 "top officers of Fortune 1000 companies sit on at least three boards," including their own.  The actual analysis is here.  Some institutional investors think that this is too much and are pressuring some of them to reduce their commitments.  As the article noted:

Some investors are actively objecting to executives' multiple directorships. Calpers and the UAW Retiree Medical Benefits Trust, which manages about $53 billion in assets for retired auto workers, say they likely will oppose board re-elections at 2012 annual shareholder meetings of several dozen CEOs with more than one outside board seat.

Top executives may take these positions "to broaden their business perspective."  But they are also well paid.  "Among companies in the Standard & Poor's 500-stock index, average annual compensation for directors exceeded $232,000 in 2010, up 8% from $215,000 the year before, according to a 2011 study by recruiting firm Spencer Stuart."

The pressure is to prevent executive officers from taking too much time away from the primary company that they manage.  At the same time, however, the approach also makes it a little bit harder to ensure the reliability of the board.