Software company board members have diverse functional experience
The 10 fast-growth software companies we studied demonstrate a diversity of experience in both roles and industry experience. Noteworthy is the fact that it’s common for board members on fast-growth software companies to sit on multiple boards. Twenty-one, or 27 percent, of directors of the companies we studied sit on more than one board. Nine of the 10 current CEOs sit on their own boards and the other 10 CEO-level directors hold CEO roles in different companies. The one CEO who does not appear on his own board is Sanjay Kalra of Tech Mahindra, located in India.
In all, our study reveals 21 career board members – people who chose to spend their retirement years serving on the boards of software companies. The “grey hair” factor can be vital to these companies. Indeed, retired executives bring invaluable experience to companies at any stage and in any industry.
Retired board members also offer the advantage of time. Without day-to-day responsibilities in another company’s C-suite, these retired directors have more time to devote to the board(s) on which they serve. With mandatory retirement ages at some corporations coming too early for many, retired execs still have plenty of energy and insight to offer – and desire to stay active in business. This makes retired executives strong candidates for board seats. What’s more, if retired board members sit on multiple boards they may still hold strong business connections, as well as diverse and current experience.
While larger software firms tend to have more academic representation on their boards, the collective group of software companies studied in the $100 million to $1 billion range only report one member of academia on the board, as well as one Chief Information Officer. Investment professionals, by contrast, hold 10 seats on boards of software companies in this revenue range.
We would also have expected more financial executives in this set as “financial experts” for audit committees. Technically, others can serve as audit committee members, and CEOs, who have overseen the financial function, may also be qualified as “financial experts”. However, the complex revenue recognition rules for software companies would lead one to believe that there would be more current/former CFOs of software companies on boards.