As described throughout these documents, early-stage tech companies need the pro-active and diligent involvement of their Boards of Directors to improve their performance. There is a greater requirement for early-stage Boards which translates into a greater commitment of time and energy.
Chairman: To be effective, a Chairman will be active in many functions, including but not limited to those listed below:
- Meeting with and mentoring the CEO;
- Reviewing Board meeting agendas;
- Preparing for Board meetings;
- Chairing Board meetings;
- Keeping informed of the Company’s business;
- Communicating with other Directors;
- Recruiting Directors;
- Making introductions for the Company;
- Representing the company at industry functions.
Chairmen should expect to devote 15 – 25% of their working time, or an average of a day a week. This is an onerous requirement, reflecting the significance of the Chairman’s contribution to the performance of the CEO and company.
Directors: Directors will have less of a role in communicating with the CEO and planning Board meetings but will have the same requirements for preparing for and attending Board meetings, keeping current on the company’s business, making introductions, and financing.
Directors should expect to devote 5 – 15% of their time.
These time requirements relate directly to Chairman and Director Compensation.