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- W2169765465 abstract "Recent events in the US have focused attention on the fiduciary responsibility of independent board members at a public or private company. This paper examines the process of selecting board members at a high tech start-up where issues of investment in innovation, conflict of interest, firm valuation, non-interference in direct management, exit strategy and accounting practices can be difficult for an entrepreneurial team to handle in a timely manner. Start-ups are in a unique position in that they have the opportunity to initiate a board composition that not only can serve them well in the first few years of business but can set the “tone” or “culture” for the expected levels of ethical behavior in the entrepreneurial team. After reviewing the functions of board members, a typology of candidates and general qualifications, suggestions are made to the start-up’s entrepreneurial team in the form of a checklist for dealing with several of these issues in board governance. CHANGING ROLE OF THE BOARD OF DIRECTORS Recent events in the US have focused attention on the fiduciary responsibility of board members in a company. Questionable tactics in financial reporting at Enron, lucrative executive compensation packages at Tyco and numerous reports of insider trading and conflict of interest have eroded the confidence in the methodology of board oversight. In the aftermath of recent corporate scandals, the spotlight has shown most brightly on whom shareholders considered the most impartial of board members and who was supposed to best represent their interests – the independent board member. The independence was derived from several attributes: not being part of management or related to any member of management; not having substantial financial investment in the company; not doing business with the company; and not being able to accrue great personal wealth from the company’s performance. Nevertheless, despite the disappointment and due to the urging of institutional investors, companies have moved towards having more and more independent directors. (Colman, 1994) However, there are mixed reviews as to the value of the independent directors on the board in relation to firm performance. (Lin, 1996) (Barnhart and Rosenstein, 1998) (Denis, 2001) The role the board plays in corporate governance is certainly becoming more pronounced and the board’s relationship with the CEO is also changing. (Pound, 1995) Start-ups have the unique opportunity to begin corporate governance with principles that have become important to shareholders – transparency, communications, standard and widely accepted accounting rules, and the highest ethical standards. Although start-ups" @default.
- W2169765465 created "2016-06-24" @default.
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- W2169765465 date "2006-03-09" @default.
- W2169765465 modified "2023-09-26" @default.
- W2169765465 title "Board Member Selection in New Technology Businesses" @default.
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