a16z Podcast | Public or Private? Finding the Right Board Seat

Motivations for Joining Boards

• Career Development: Executives join boards primarily to gain perspective outside their functional silos, learn how other CEOs operate and communicate, and accelerate their transition into general executive roles.
• Learning by Observation: Former Charles Schwab CIO Dawn Lepore noted that watching other CEOs provided invaluable lessons that she immediately applied when leading Drugstore.com.
• Evolving Career Goals: Amy Batynski, CMO of Zillow, joined boards to bridge a gap in her career where she needed more operational experience beyond a decade of functional marketing leadership.
• Leveraging Experience: Michelle Wilson, former Amazon SVP and Zendesk director, views board service as a highly leveraged way to apply her broad business experience to help younger companies.
• Mentorship and Giving Back: Participants emphasized the desire to "give back" by offering guidance to management teams that lack certain experiences, continuing a cycle of mentorship they received earlier in their careers.
• Networking: Networking was identified as a critical mechanism for securing seats, with Lepore noting it took approximately 20 months of active networking before securing her first public board seat.

Private vs. Public Board Dynamics

• Strategic Focus Differences: Private boards often focus on helping CEOs scale the company, whereas public boards typically manage companies that have already scaled and focus on the next level of growth.
• Governance Complexity: Public boards require more structured governance processes and regulatory compliance, specifically the requirement to have three independent directors on the audit committee alone.
• Board Composition Transitions: Companies typically transition their board composition one to two years before or after an IPO to onboard independent directors and meet new regulatory requirements.
• Formality Levels: Private boards tend to be more informal, while public boards are generally more structured, though this varies significantly by company culture.
• Preparation for IPO: Private boards are increasingly focusing on governance to ensure preparedness for a public listing, treating it as a healthy operational practice even before going public.
• Role of Directors: Directors on private boards often help scale operations, while public board directors often focus on strategic oversight and risk management.

Director Roles and Expectations

• Beyond Functional Silos: Directors should not view their seats as "slots" for specific functional expertise (e.g., "the lawyer slot" or "the marketing slot") but as opportunities to contribute broadly across all business areas.
• Business-First Approach: Michelle Wilson, though a general counsel, operates primarily as a business person on the Zendesk board, raising legal issues only when necessary while focusing on broader business strategy.
• Mandatory Expertise: The only rigid requirement mentioned is for public companies to have a designated financial expert on the audit committee, though this expert must still contribute broadly.
• Active Learning: Directors are expected to do homework between meetings, including using the company's products, analyzing competitors, and researching industry trends.
• Listening vs. Advising: New directors often struggle with the shift from being an operator to a board member; the consensus is to prioritize asking questions and listening over offering prescriptive solutions.
• Board Presence: Directors must determine the board's culture and norms, balancing self-confidence with the discipline to remain silent when appropriate.
• Note-Taking: Taking detailed notes was cited as a crucial preparation strategy to ensure a director is ready to contribute meaningfully when called upon.

Board Recruitment and Fit

• Honest Self-Assessment: Candidates must be honest about whether their specific expertise (e.g., marketing or technology) genuinely addresses a company's needs rather than seeking a seat for resume value.
• Non-Profit Limitation: Serving on non-profit boards does not translate to corporate board readiness due to fundamental differences in operational complexity and governance.
• Targeted Approach: Lepore advised identifying 5-10 specific companies where an individual could add unique value and actively seeking introductions to those management teams.
• VC and CEO Networks: Relationships with venture capitalists and CEOs are primary channels for board opportunities, often starting with advisory roles or angel investments.
• The "Chicken and Egg" Problem: Breaking into board service is difficult because experienced directors are often invited to serve, requiring candidates to be patient and proactive in a process that is often long and fitful.
• Fit Over Prestige: Decisions should be based on the potential for learning, the relationship with the CEO, and the ability to contribute to the existing mix of directors rather than the public/private status.

Best Practices for Board Operations

• Strategy Over Updates: The most effective board meetings dedicate time to strategic discussions and hard problems rather than detailed business updates, which should be provided in advance.
• CEO Transparency: Directors value CEOs who are transparent about both successes and failures early in the process, avoiding the packaging of issues into polished presentations.
• Pre-Meeting Materials: Sending detailed materials (e.g., slide decks) in advance allows directors to absorb information and reserve meeting time for high-level discussion.
• Agenda Setting: CEOs can maximize board value by presenting specific questions or top-of-mind issues they want the board to solve, rather than a generic "update" format.
• Team Exposure: Directors benefit from meeting and building relationships with the CEO's direct reports to understand the company's leadership culture better.
• Contribution Focus: A successful board meeting leaves directors feeling they have made a tangible difference to the company's trajectory.

Challenges and Time Commitment

• Variable Time Schedules: Board time commitment is irregular; periods of low activity can be interrupted by urgent crises, requiring directors to be prepared for sudden, intense focus.
• Work-Life Balance: Balancing board service with a demanding day job is a primary challenge, requiring careful management of travel and meeting schedules.
• Executive Support: Directors must secure explicit support from their current employers or boards to ensure they can dedicate time away from their primary responsibilities.
• Patience in Process: Directors must cultivate patience, as board recruitment is often an imperfect, slow-moving process with delays and imperfect information.

Seattle Tech Scene Insights

• Market Vibrancy: The Seattle tech scene has become significantly more vibrant over the last decade, driven by successful mid-stage companies like Zillow and Concur joining the giants of Amazon and Microsoft.
• Cultural Differences: Seattle companies are often described as less ego-driven and more loyal than their Bay Area counterparts, with employees tending to stay longer with companies.
• Ambition Shift: While historically less aggressive in setting "world-changing" ambitions, Seattle founders are increasingly displaying big dreams and taking larger swings in recent years.
• Funding Landscape: A broader base of seed and angel investors has emerged in Seattle, making it easier for younger companies to secure funding compared to a decade ago.
• Competitive Talent Market: The market is becoming more competitive with prominent Bay Area names opening offices in Seattle, raising the bar for talent acquisition.
• Non-Tech Strength: The region continues to support a broad base of successful non-tech companies alongside its growing technology sector.