Technology company boards: in search of the differences.

Survey results provide evidence that technology company boards are smaller, younger, more fluid, and demonstrate other distinctive characteristics.

Do high-technology boards differ dramatically from boards in other industries? Are they in the vanguard of forging a new paradigm of corporate governance? A new model board: one intentionally leaner, younger, more fluid and less bureaucratic? An innovative model that more aggressively aligns director compensation with corporate performance? Or are high-technology boards simply immature organizationally? As high-technology companies become bigger, older and/or enjoy higher annual compounded growth in shareholder value, will their boards predictably begin to mature and adopt the normative practices characteristic of traditional boards in more established sectors?

To answer these and other questions, Spencer Stuart, the executive search firm, conducted a survey of board practices of this fast-growing sector of American business. Its survey universe was composed of 100 leading high-tech companies (which it refers to as the "HT 100"). These companies are in aerospace, computers, semiconductors, software, telecommunications, systems integrators, wireless communications, and other technology fields. Culling data from proxy statements and mailed questionnaires, the firm then compared the patterns of the HT 100 companies with those of its Spencer Stuart Board Index (SSBI) companies, an annual survey of board practices at 100 leading corporations that the firm has been doing for the past 12 years. The survey results were released in 1997, and summary highlights of its findings are offered below.

- DIRECTORS & BOARDS

Board Size: Technology companies may be leading the way in the trend toward smaller boards. based upon size, surveyed technology firms average between one to six fewer directors than SSBI companies, which average 12 board members. A correlation may exist between smaller, more manageable boards and a company's ability to move quickly to hold or gain a position of market leadership. However, with smaller boards, a business runs the risk of having a too tightly knit group that lacks diverse perspectives.

Age of Directors: Technology board members are, on average, two to 10 years younger than SSBI directors, whose average age is 61. As expected, the leading software companies have, on average, the youngest directors - for example, age 48 at Computer Associates and age 55 at Oracle. Similarly...