Since our 2015 report, Who Runs Silicon Valley: Board of Directors edition, Lonergan Partners has been thinking about the changing dynamic of Board seats in Silicon Valley. We’ve had the opportunity to work with many Boards on their composition and we recognize what elevates the superlative Board from the rest of the field.
Here are five questions I’d urge someone to ask before serving on a Silicon Valley board.
Are you willing to work really hard? The best Board Members are willing to invest substantial time and energy to make a useful contribution to their Board. While a Board might meet an average of six times a year, an effective Board Member is working with committees between meetings, is investing time to stay current on market trends, and immediately steps up when called upon to help.
Can you be helpful to the company through talent acquisition, partner development, and customer acquisition? The best Board Members are very well-connected and keep current in the industries they work in. The ability to introduce potential A players, potential customers, and new partners to a company is a huge advantage. Another time when this is valuable is during the hiring of a new CEO. Can you as a Board Member help introduce the board to statured executives?
Do you have an informed point of view? In the fast moving world of technology, CEOs need Board Members who are pragmatic and thought provoking. For example, we’ve seen a large uptick in the number of CIOs serving on Boards because they bring a stimulating point of view to the Board Room as buyers/investigators/users of new technology.
Courage to Act
Do you believe in taking action to remove poor leadership? Unfortunately, a lot of company value has been destroyed in the Valley by boards who took a “wait and see” approach to governance and allowed company management to fritter away massive shareholder value. While for the most part no one expects the new Board Member to immediately call for the CEO’s dismissal, once the Board Member is up to speed can s/he marshal the courage of their convictions to either demand great leadership, or demand a change?
What do you stand for (and as a result what will the company stand for)? Asking questions around culture is important at a Board level. For example, do you champion a meritocracy? If you do, then the top 20% of your company’s employees should get 80% of the bonuses. For anyone interested in this topic I strongly suggest you study Mike Maples thoughts on “Hot Teams” and how hot teams can massively out produce their competition. (Example: NASA landing on the moon before HP had invented the pocket calculator is an example of a hot team; the decision to go to the moon started at “the Board level.”)
Board service is not for the faint of heart. It is the rare executive who is prepared to answer these five questions in the affirmative.