Track 1 - Managing Transactions, Cash and Talent
Thursday, 11/12, 11:30 a.m. - Why Your Board of Directors Matters Now More Than Ever
Moderator:
- William Holodnak, President and CEO, J. Robert Scott
Panelists:
- Alison Winter, Co-Founder and Co-Chair of WomenCorporateDirectors and Board Member
- Thomas Wajnert, Board Member, Reynolds American
- Rob Scott, Vice President Global Account Sales, Enterprise Sales, Alliances, Sales Operations and Halo Sales, Hewlett-Packard Company, HP ProCurve Networking
- Jeff Andrews, Atlas Venture Boston
Assembling a board with the right skills is a critical step on the path to corporate growth. For early-stage companies, key skills include industry contacts, familiarity with best practices in corporate governance, and technical knowledge that helps generate earn revenue. For later stage companies, expertise in financial controls can be helpful, as can an understanding of the venture capital industry.
What should companies do to attract the best board members? First, ask what type of members you want, and cast a wide net, looking beyond your immediate network. Second, establish a compensation plan with a vesting schedule and annual meetings; this makes it easier to change your board if need be. Third, try to get people with reputations that will create a halo effect for your whole organization, making it easier to attract other strong board members and accomplish additional business goals.
Board members today expect transparency in more areas of your business. They are particularly interested in ensuring alignment of pay and performance. The expectation is that a company's performance will be compared not just with its industry peers, but with that of companies in the broader market.
At the same time, regulators want to limit board's decision-making discretion in this area. “You need the best talent, and to get it, you have to pay them,” said Alison Winter, Co-Founder and Co-Chair of Women Corporate Directors. In some industries, especially financial services, government pay czars have made this difficult or impossible, but Winter s aid that boards can play a role in lobbying to loosen certain restrictions.
Once you've assembled your board, “Don't think too much about what the board wants,” said Jeff Andrews of Atlas Venture Boston. Although you want to rely on your board's advice, remember that you're leading the company. Boards want to know that you'll do whatever it takes to help the company grow. If they sense that you're looking to them for overall strategic direction, they may start to question your leadership.
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