was someone else As appalled as I am by the content of Connie Loizos’ recent article, Coming out of COVID, are investors losing their taste for board meetings? The stories and quotes in the article about investors reducing their interest and attendance at board meetings, not showing up, sending the junior associate for cover, etc. are insightful and alarming.
The reasons given are logical, like overwhelmed investors, Zoom fatigue, and new directors. Connie’s comment that “VCs privately admit they don’t add much value to boards” is quite funny to read as a CEO who’s heard a lot of investors talk about how much value they add to boards (although the good ones do add a lot of value!).
For the most part, everything about the content of this article just made me angry.
Disengaged or dysfunctional boards aren’t just bad for CEOs and LPs; they are bad for everyone. If the world has truly become a place where board meetings are nothing more than a distraction for CEOs and investors think it’s a tax they can’t afford, then it’s time for boards and board meetings to hit the reset button.
Here are four things that need to happen on this reset:
Investors need to do their job well or quit
Disengaged or dysfunctional boards aren’t just bad for CEOs and LPs; they are bad for everyone.
The argument that investors made too many deals during the pandemic and don’t have time now is particularly silly given that the pandemic has also reduced the time VCs have had to devote to individual board meetings. I used to have four in-person board meetings each year with directors traveling for meetings, eating dinner, spending time with the team and attending committee meetings.
Today, directors are fortunate enough to hold an in-person meeting once a year (more on that later). And since everything else takes less time and there is little transit, each VC should double the time they spend on board meetings.
Serving on a post-investment board is central to the role of an investor. They have responsibilities to the Founders they support and to the LPs they represent as their primary function is to “find deals, close deals and manage the portfolio”.
If they don’t have time for the third job, they must acknowledge that to both founders and LPs before stepping down. If a VC can’t be bothered to focus on their investments and creating value, they should work with the company to find a replacement.
