Investors’ ability to assess strategy and operations at their portfolio companies is largely dependent upon the effectiveness of their portfolio company boards.
Venture capital investors, private equity firms, and family offices may have different expectations of their portfolio companies, but these investors’ ability to assess strategy and operations—and monitor the progress of their investment—is in large measure dependent upon the effectiveness of their portfolio company boards.
To better understand the challenges facing portfolio company boards today—what works, what doesn’t, and the opportunities for improvement—we surveyed more than 250 portfolio company directors, falling into three categories: portfolio company executives, investment professionals, and outside directors. We asked the directors to supplement their survey responses with write-in comments to expand on their views.
Taken together, the survey responses and write-ins provide meaningful insights into the state of portfolio company board governance. Key takeaways include the following:
While there is no secret formula for board effectiveness and improvement—particularly for boards of privately held companies with different ownership structures and stages of maturity—we believe that these survey findings can be used to help boards assess their own performance and identify opportunities for advancement.