Tom Perkins (yes, that Tom Perkins) had an extended op-ed on corporate governance in Friday's Wall Street Journal that I found both compelling and disappointing. In Perkins' framework, privately held ventures are governed by "Guidance" boards of directors, where "[t]he board's emphasis is on performance, getting the venture up to speed as quickly as possible, and...taking the company public..." According to Perkins, "Few question the effectiveness of this model, as few involved question the desirability of creating shareholder value." No argument here.
But the board's responsibilities change after the venture goes public...
[O]nce [a] startup becomes a public company, a strange metamorphosis commences. It begins to be assumed that the public investors have different goals than the original backers. The continuing creation of shareholder value--the primary goal of the venture capitalist--while not forgotten, must take its place along side a host of other considerations. Is the company socially responsible? Is it inclusive? Does its board represent the population? Are women and minorities seated around the board table?
See full Article.
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