A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

Do you have or are you planning to put a woman on your board as you grow?

If you are like most of tech and many other companies you aren’t/won’t.

What if it wasn’t about diversity, but about money?

What if having a woman would actually increase your ROI and valuation?

Most boards—public or private, tech or not—fit perfectly into the description offered by one governance expert: “male, pale and stale.”

The last thing most tech people consider themselves is stale, but when it comes to what women want in a product/service or how to engage them they usually come up short.

Doctors and pharmaceutical companies learned the hard way that drugs act differently in men and women.

The automobile and many other industries have traveled a slow and painful road to understanding how and why women buy their product, as well as what they want.

But can just one female board member make that much difference?

One recent report from Credit Suisse analyzed 2,360 companies around the world over the six years ended in December 2011. It found that companies with one or more women on their boards generated higher average share prices and better returns on equity during that period than companies with no women as directors.

As a startup your board is small and usually made up of investors, but that doesn’t stop you from having women on your advisory board, executive team and in senior positions.

Just please don’t use the tired old excuse of “no qualified women available.”

It isn’t true, but it certainly drives home your “stale” mindset.

Image credit: HikingArtist

With News Corp’s culture making headlines around the world (and links to plentiful to choose) I was reminded of something I read recently about a new ethics compliance study (free registration required).

The new outlook has permeated the boardroom. In fact, only 22% of ethics and compliance leaders worry about senior management’s ability and desire to demonstrate and promote ethical conduct. Sixty-eight percent of the respondents stated that promoting an ethical culture creates long-term value for the business.

In fact, 45% of respondents are concerned that middle managers are not as invested in ethics initiatives as their superiors.
Think about this; senior management is ethical, but the guys in the middle area are the problem.

Funny, in almost all the ethics cases over the last few decades it’s been senior management that was the driving force and found to be at fault.

Most people respond to the tone and example set by their leaders.

But too often the goals and the pressure to achieve them reflect an unwritten message from senior executives—use whatever means necessary, just get it done.

I’ve never seen any statistics, but I’ll bet that if middle managers are guilty of anything it’s going too far to produce the results demanded of them by their bosses who are, in turn, responding to Wall Street.

Flickr image credit: ZedBee | Zoë Power

Work hard, work smart, climb the corporate ladder, get tight with the right people and you could grab the brass ring—a director’s seat on one (or more) boards.

Money, prestige, power, respect—the hallmarks of leadership.

Responsibility—lots of it, especially if you are an outside director.

Accountability—not so much.

Consequences—rarely if at all.

Most of the outside directors serving on boards for companies such as AIG, Bear Sterns and Lehman Bros. moved almost immediately to other boards.

No muss, no fuss, no accountability, no consequences.

“In too many cases, the radioactivity of a board member of a collapsed company has a half life measured in milliseconds,” said John Gillespie, a longtime Wall Street investment banker and the co-author of “Money for Nothing” (Free Press), a recent book on corporate boards.

Rakesh Khurana, a Harvard Business School professor specializing in corporate-governance issues, says there are legitimate questions surrounding these boards. “When selecting individuals to oversee an organization, what criteria should we be using other than their previous performance on a corporate board?” he said. “If there’s no accountability here, then what is the system of accountability?”

Makes you wonder exactly what “fiduciary responsibility” means these days—let alone what it takes to breach it.

stock.xchng image credit: http://www.sxc.hu/photo/683292

An old saw says that in Washington DC politics is in the water; if that’s true, than technology is in the water in and around Silicon Valley. I lived there from 1977 to 2003 and just as DC media focuses exhaustively on Federal politics our media delved into the technology world, especially at two ends of the spectrum—startups and iconic brands.

Hewlett Packard is beyond iconic—it’s legendary—and dissecting what was happening and why was a media constant.

That hasn’t changed since I left; the latest being the Hurd fiasco. I followed the stories from the original news flash, not all of them but enough to understand what happened and some analysis, but I still felt something was missing.

I kept thinking that if Hurd was really terminated for the reasons stated then he was terminated for cause, which would mean no 40-50 million dollar severance package, but instead he was allowed to resign.

Something didn’t smell right or maybe I was just suspicious because the little I knew about Hurd didn’t impress me, but, then, who am I to disagree with all the experts who raved about his turn around of HP.

A Joe Nocera’s column Friday in the NY Times offered up a more logical reason for his ouster; one that makes far more sense to me.

According to Anthony Bianco, author of The Big Lie: Spying, Scandal and Ethical Collapse at Hewlett-Packard, “There was a residue of mistrust because of the pretexting scandal. I conclude in the book that he lacks the moral character to be C.E.O.”

Then there were the company’s employees. The consensus in Silicon Valley is that Mr. Hurd was despised at H.P., not just by the rank and file, but even by H.P.’s top executives.

Worse, Hurd gutted R&D, selling HP’s future for the short-term gains that Wall Street loves.

In the final look, the people who must be trusted to do the right thing in the running of large companies is the Board, but HP’s Board has proven over and over that it lacks what it takes.

On the other hand, putting up dazzling short-term numbers that have the effect of enriching himself while robbing H.P.’s future — isn’t that what a C.E.O. should be fired for? Firing Mr. Hurd for that reason, however, would have taken courage, something that has always been in short supply on the H.P. board.

What do you think? Read the column, come back and share your thoughts.

Flickr image credit: http://www.flickr.com/photos/zedbee/103147140/

Executive compensation is in the limelight these days—not that it’s ever out. People have always been fascinated by the lavish paychecks of high profile players, whether business leaders or Hollywood icons.

The list of executives paid for non-performance in 2006 pales in comparison to CEO pay in 2008.

We’re all taught the value of hard work, exceeding goals, giving our all, but some have found a better way—a loving Board.

Non-performance bonus money isn’t new; in 2007 Coke had a $2.9 billion noncash charge in the fourth quarter, so they cut 3500 workers and their execs missed their performance bonus targets, but the Board stepped in, giving “…millions of dollars in “discretionary cash awards.”

And no matter how good a leader is, does any performance warrant an average of $144,573 a day for 13 years?

The explanation (excuse?) for these giant pay packages is the same one that kids have been using for generations—peer pressure.

Boards claim they can’t hire the best (AKA biggest name; best negotiator) without these outsize pay packages, but there are hundreds of skilled executives that could be had for less and who would probably do more.

For all the public outcry against outrageous pay there is none against the directors who don’t just approve it, but spend their effort outbidding the other Board.

When are they going to show some real leadership instead of whining and complaining about government interference?

And when will the washed and unwashed start putting the blame where it really belongs?

Little girls are made of “sugar and spice and everything nice;” little boys are made of “snakes and snails, and puppy dog tails;” and many (not all) “leaders” are made of ego and greed and the skill to mislead.

What are Boards made of?

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Image credit: jimrhoda on sxc.hu