The scene unfolds countless times a year: founders, investors, and service providers gather at conferences to discuss salient issues for early stage, high growth companies. Panels and keynotes discuss innovation, growth strategies, team building, marketing, advertising, and fundraising, and the energy in the room is dynamic. Then it’s time for the inevitable panel about corporate boards, typically presided over by some of the lawyers whose firms are sponsoring the event. Founders and CEOs know these panels as the time to run down the street for some real coffee, catch up with friends in the hallway, check email, or do virtually anything else your phones will allow to divert your attention away from the discussion about boards of directors.
Having sat through an inordinate number of those rote, boring, impractical panels, I completely understand why myriad eyes collectively glaze over the moment there is any mention of the dreaded term “corporate governance.” As a former lawyer and institutional investor, it couldn’t be more clear to me that the business world has failed — 100 percent — when it comes to discussing with entrepreneurs how and why high performing boards are critically important to business success or failure. The cost of that failure can’t be overstated: less innovation and fewer American jobs.
Instructively, there is an enormous disconnect in the capital markets in this country when it comes to corporate governance; investors that manage trillions of dollars (e.g., BlackRock, CalPERS, et al.) are laser focused on boardroom efficacy, while entrepreneurs tend to view corporate governance as a necessary evil at best, or a form over substance waste of time at worst. Completely avoidable corporate governance failures continue to make headlines in the venture ecosystem, while Warren Buffett and Jamie Dimon implore companies of all sizes to prioritize effective oversight.
As is the case with most things in life, sunlight is the best disinfectant. What’s missing are brutally frank, relevant, practical, data driven discussions with crazy smart entrepreneurs about how and why boards matter so much. Put differently, a re-imagination of the board’s role in successful high growth companies:
- Corporate failures that are regularly in the news… are board failures
- Viewing board composition best practices from an investor’s perspective
- Dissecting real world examples of how/why better-governed companies make more money
- Analyzing case studies to see how the status quo often leads to fatal mistakes in high growth companies
- Examining what changes the Sand Hill Road continuum should consider
These are some of the takeaways that will be offered on January 18, 2017 when I host “Smarter Growth Really Starts in the Boardroom” at the Nasdaq Entrepreneurial Center in San Francisco. I look forward to seeing you there.