Tuesday, 20 July 2010 14:49

Software Boards Report - Tenures & Terms Featured

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Stable Boards with Some New Blood – Long Tenures with Short Terms

Tenure of board members of fastest growth software companies

Director tenures at fast-growth software companies range from zero to 24 years. All of the North American companies studied have at least one board member that was assigned within the last five years. Drilling down further, four of those companies have assigned a new board member in the last three years. While there are some changes in these boards, there is not much new blood coming in. Perhaps getting it right the first time and then adjusting is their motto.

There are definitely advantages to letting the team gel and work together. A lot of companies are evaluating the effectiveness of their boards and making changes to drive more growth and profitability.

Only one company has had the same director seated for 24 years – Lawson Software. But this is the founder of the company and is therefore not surprising. Both CyberSource and Open Text have also allowed at least one board member to remain seated at the table for 15 years and Omniture for 11 years.

The board terms in the companies are as follows:

  • Open Text (CAN) 1 year
  • Tech Mahindra (India) N/A
  • Avocent (USA) 3 years
  • StepStone (UK) 2 years
  • Lawson Software (USA) 1 year
  • Sonata Software (India) N/A
  • Omniture (USA) 3 years
  • Synchronoss Tech (USA) 3 years
  • Opsware (USA) 3 years
  • CyberSource (USA) 1 year

Given the short terms, it is surprising that there is so little movement in the board seats at these companies. Perhaps board evaluations need to take a front and center role in these organizations. Some boards may indeed be “A” teams. However, being in the top performing categories may also hide a lot of sins and not allow time for action.

By comparison, the 2008 Silicon Valley Board Index shows that most boards (62 percent) have one-year terms for board directors. Only 2 percent have two-year terms, and 36 percent have three-year terms. One-year terms have become more common in the past several years; 56 percent of Silicon Valley boards had one-year terms in 2003. The average term length is 1.8 years, nearly the same as in 2007.

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Dora Vell

Dora Vell is the Managing Partner of Vell Executive Search, a boutique executive search firm in Boston focused on recruiting technology executives and board members. Vell has successfully completed numerous board member and C-level executive searches, including CEOs, COOs, CIOs, and Vice Presidents - at both public and private companies.

Prior to founding the firm in 2005, Vell was a Partner at Heidrick & Struggles' Technology practice for seven years.  Before her career in executive search, she worked at IBM for 11 years, managing software engineering organizations of 100 people and software sales organizations with revenues of $150 million. She has also served as an executive assistant to the CEO of IBM Canada for one year.

Vell holds seven worldwide software patents. She has published several Business of Leadership reports on governance and leadership and has been quoted in numerous articles including The Wall Street Journal, Forbes, Business Week, Fortune, Agenda Week, MSNBC, Mass High Tech, the OPUS for the World Economic Forum, Boston Business Journal, The Globe & Mail, CIO Magazine, and IEEE. She also has been a featured speaker on leadership at numerous conferences and at Columbia University's MBA program.

Vell is a member of the National Association of Corporate Directors (NACD), the Boston CEO Roundtable. She has served on the boards of Framingham State, Entrepreneur's Organization, Goodwill, Mary Centre for developmentally handicapped adults, garage.ca, and RBC Capital Partners.

She has received an MBA from the University of Toronto, a Master in Computer Science from the University of Waterloo, and a Bachelor in Computer Science from Carleton. She has also completed the MIT Entrepreneurial Master’s program.


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