December 8, 2020
Over the years, I’ve had a list of nagging questions every time I’ve contemplated my board, but didn’t have anyone I could turn to who had deep, broad advice on this topic. Those questions were:
- How big should my board be at this stage?
- How many independent directors should I have?
- What is the right profile of an independent director?
- How many options should I give a board member?
- How do I find the best, diverse, talent for my board openings?
That’s why Bolster is excited to announce the launch of our first CEO tool: Board Benchmarking. This application (which is free!) is the first of a series of tools that we’re designing to help CEOs understand the performance, design, and impact of themselves, their executive teams, and their boards. The results of this first application will shed light on the independence, diversity, and compensation of private company boards that’s never been available on a broad basis before.
Why are we starting with Board Benchmarking?
- Increasing Board Diversity is top of mind right now…
…and that means CEOs need to have a handle on three things at the same time to get it right: appropriate board size/number of independent seats, a talent pipeline that is diverse and well vetted, and clear compensation guidelines for independent directors. Diverse employee populations and customer bases start with having a diverse board and a CEO (you!) who is attuned to the benefits of diversity at the top. The longer you wait to prioritize diversity in the boardroom, the harder it becomes to change the makeup of your board. Culture becomes entrenched, recruiting becomes driven by referrals, and before you know it, everyone in an organization looks and thinks a little bit the same way. By capturing data on the diversity and composition of startup boards, we hope to offer an industry-wide snapshot to help CEOs start to have what can often be tricky conversations with their VCs about board size and composition as early as possible. And by pairing that with Bolster’s unique marketplace for diverse and vetted Board-ready talent, we hope to help CEOs slay all three dragons (number of independent seats, talent pipeline, and comp guidelines) at the same time.
- Private company board composition is notoriously tricky to benchmark.
Unlike public companies, which are required to disclose the identities and compensation packages for their boards of directors, private board structure tends to remain…well, private! While this makes sense from a regulatory perspective, it often means private companies CEOs are taking a shot in the dark when it comes to things like when to add independent directors and how much to pay them. By aggregating and anonymizing thousands of data points across hundreds of private companies, we hope to (for the first time ever) provide CEOs with a very real, in-the-moment look at how their board today stacks up against others in similar cohorts.
- Filling an open board seat is a high-priority item for a CEO, and a tough one to get right.
It’s said that good choices come from good options. Early benchmarking results show that half of startup CEOs expect to fill an open board position within the next 12 months. Just as it’s critically important to get the right executives around your (well, now virtual) table, it’s equally, if not even more important to build a board that effectively supports you, your company, and your customers. Every month that goes by with a board vacancy is another month where you’re potentially leaving valuable introductions and perspectives on the table. We hope that by exposing these board searches across such a broad subset of companies, we’ll also empower CEOs to take immediate next steps to fill those vacancies — including help recruiting multiple board candidates directly from the Bolster network.
As we conduct this survey over the next month, we’ll provide greater visibility into the size, composition, diversity, and director compensation of private company boards. We’re also establishing robust pipeline partnerships to amplify board-ready talent from organizations with diverse membership of African American, Hispanic/Latinx, and women orgs. So for anyone interested in adding qualified diverse talent to their boards, we’ll be ready.
Participants who complete the survey will receive early access to your benchmark results and a comprehensive guide to building and managing your Board of Directors.
In early Q1, we’ll invite all participants of our Board Benchmarking survey to log in to Bolster and view their results interactively. CEOs will be able to see how their own boards stack up compared to others in the VC portfolio network or other cohorts. VC partners will be able to see patterns across the entire portfolio.
Watch this space in the coming days and weeks for CEO-specific content about hiring Board members.