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Canadian Boards Report - About the Survey Featured

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Entrepreneurial Boards Composition Survey

Vell Executive Search set out to reexamine the state of board director membership in entrepreneurial companies. Our goal in this document is to:

  • Identify trends in board practices and corporate governance of entrepreneurial technology companies
  • Provide a baseline to benchmark practices and compensation
  • Compare and contrast practices of private companies and public companies
  • Analyze the reasons for the differences in practices
  • Establish a benchmark to measure future trends in board membership.

Over the course of four months, Vell Executive Search contacted a non-random sample of companies and 150 responded. The survey was conducted through a targeted e-mail distribution to ensure optimal response. Vell Executive Search sent invitations to participate in the survey to CEOs, venture capitalists, vice presidents of human resources and board members.

The survey questionnaire posed roughly 25 questions, requiring over 150 separate data. These questions spanned three broad categories: (1) company characteristics, such as size, industry, and ownership structure, (2) board composition and background, and (3) board remuneration. These responses represent the primary data on which this report’s findings are based. (Note: Approximately 150 companies completed at least one section on the electronic survey.)

For a detailed view of the geographic and industrial sectors of the respondents, see the charts displayed on the following pages. Approximately 50% of the companies had average annual revenues of less than US$10 million. That makes the revenue of the sample firms much smaller than those studied in earlier research. The majority of responding firms were privately held companies. Two thirds of firms have been operating for more than 10 years.

Demographic Characteristics of Sample Firms

Vell Executive Search purposely chose a broad range of companies in terms of varied locations, industries, ages, sizes, and ownership structures in order to define both corporate-wide and more granular trends.

Of the 93% of survey respondents with headquarters in North America, 63% are located in the U.S. and 30% are located in Canada. (See Figure 1a.) The remaining 7% of participating firms are headquartered Europe and in Japan.

Figure A1: Global Geographic Concentration

Global Geographic Concentration

U.S. State Geographic Concentration

Of the 63% of responding firms that are headquartered in the U.S., the majority are based in Massachusetts. California, Connecticut, New Hampshire, and Pennsylvania are also represented in the survey results. (See Figure 1b.)

Figure A2: State Geographic Concentration

State Geographic Concentration

Canadian Province Geographic Location

Of the 30% of firms that are headquartered in Canada, the majority are located in Ontario. However, Quebec, British Columbia and Alberta are also represented in the survey. (See Figure 1c.)

Figure A3: Canadian Firm Geographic Concentration

Canadian Firm Geographic Concentration

Industry Concentration

Vell Executive Search elicited responses from a wide variety of industries, from education and healthcare to hardware and telecommunications. In fact, the survey represents the practices in more than 18 industries, which include utilities, retail, financial services, banking, insurance, real estate, consumer products manufacturing and consumer services, manufacturing, aerospace and automotive, business services, and software. More than 40% of the firms represented in the survey serve the software industry. Approximately 9% of the participating firms are involved in producing telecom equipment, while another 7% provide telecommunications services. (Figure 2 summarizes the industry concentration among respondent companies.)

Figure A4: Industry Concentration

Industry Concentration

Years in Operation

The firms that responded to the survey have a common thread: most are younger businesses. One third of the companies represented in the survey have been incorporated for less than five years. Two thirds of the firms have been incorporated for five to ten years. None of the respondents have been incorporated for longer than ten years. (See Figure 3.)

Figure A5: Number of Years Since First Incorporated

Number of Years Since First Incorporated

Revenue of Sampling Firms

Most of the responding firms have revenues of less than US $10 million. Only 11% of the sample firms had annual revenues of over US$100 million. By contrast, the average firm in the NACD’s study of Effective Entrepreneurial Boards had average annual revenues of US$122 million. The proportion of respondents that are privately held – 77% – is similar to the NACD Survey.

Figure A6: Size (Revenues)

Size (Revenues)

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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.

www.vell.com/

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