Board participation suffers when individuals join too many
A select group of today's top venture capitalists are nigh-ubiquitous at exciting and promising companies, serving on many different boards and guiding these businesses through their early stages. However, as The San Francisco Chronicle recently pointed out, such activity leads to "overboarding," in which a few people stretch themselves thin serving on too many boards at once, not having enough focus on any of them. (Aug. 26, Lee)
Board membership at today's growing public entities demands time and attention, and people who are trying to give the right level of commitment to upwards of 10 different organizations at once may have trouble performing their duties. This is why investor advisory firm Glass Lewis & Co. suggests that boards vote down any member serving with five or more companies simultaneously.
Today's Silicon Valley investment culture involves a constant hunt for promising new startups to advise. With any one of these companies potentially due for massive growth in the years ahead, venture capitalists are finding it hard to turn down board seats when available. Unfortunately, these firms are failing to receive the guidance they need due to their distracted investors being pulled in many different directions at once.
Subscribe to Return on Leadership to receive a bi-weekly round-up of the most provocative and important news and insights from leading business thinkers focused on the issues driving current-day strategy and board governance.