The Wall Street Journal blogs frequently report on the VC industry and their recent entry, Start-Up CEOs Gripe About VCs’ Lack Of Operating Experience, caught my eye.
I have sat on close to a dozen small business boards and agree that directors without real experience bring little to the table. I’m not sure, however, that I would automatically exclude directors without operating experience because there are valuable perspectives that can be gleaned from successful executives across a broad variety of disciplines.
What’s painful is watching inexperienced directors from investment firms that want their associates to “get experience” at the expense of their portfolio companies. For my money, let them tag along as “shadow directors”, attending board meetings, reading the board packages and listening. Drill down with them after the meetings to get their perspective and suggested solutions to the problems presented. Only when you’re convinced that they’re ready, and I mean after years not months, should they assume an official board role. Don’t rush it … and don’t conclude that just because you’ve got a smart associate, they’ll make a smart board member. Maybe not.
Save for the unique investment relationship, no prudent company or shareholder would ever select an inexperienced director of any kind. Why would you … and why would any investment firm violate this obvious “prudent man” rule?