According to What Directors Think 2007, nearly one-quarter (23%) of the over 1,000 respondents to the sixth annual U.S. public company directors survey feel that a member of their board should be replaced.

Why:

*  The director does not have the skill set needed… 36%

*  The director is not engaged…………………………….  31%

*  The director comes to meetings unprepared…….. 18%

*  The director has been on the board too long…….  17%

The first three categories above should resonate equally with private company directors and certainly with venture capitalist directors.  I have maintained for many years in my corporate governance writings that the most common problems faced by boards cut across issues of revenue size and company maturity.

At their core, these are issues that relate to the mutual accountability of individuals who belong to small groups and the need to avoid systemic dysfunction in order to maximize the opportunity for positive corporate outcomes.

In fact, many of these issues are only exacerbated in VC-backed companies because emerging companies are resource-constrained and under severe pressure to execute over a shorter time frame than larger corporations which have greater resources at their disposal.

Related posts:

1. Most Public Company Boards Conduct Full-Board Evaluations and Find Them Effective
2. Working Group on Director Accountability Releases “A Simple Guide to the Basic Responsibilities of VC-Backed Company Directors”
3. Public Company Lessons for VC Directors on VC-InsideOut
4. What’s New in the Expanded “A Simple Guide to the Basic Responsibilities of VC-Backed Company Directors”?
5. Silicon Valley Public Company Governance Trends– SpencerStuart’s 2006 Board Index

This entry was posted on Tuesday, January 15th, 2008 at 9:00 am and is filed under Adult Education, Corporate Governance, Levensohn Venture Partners, VC Board Best Practices, Venture Board Governance White Papers, Venture Capital, Working Group on Director Accountability. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.