Board Role Best Practices

Minority investment governance tips for corporate VCs

Selina Troesch
Risky Business
7 min readJun 19, 2018


What comes first? Board experience or corporate experience? (Image: Shutterstock)

One of Touchdown’s corporate partners asked us how corporate venture units typically approach board governance, and we noticed a lack of data to demonstrate the best practices in the industry. So we conducted a survey to collect first-hand information about how corporate venture professionals staff portfolio company boards and how those decisions are made. The corporations in our survey actively interact with their portfolio companies, with 100% of respondents serving as either directors or observers.

The majority of respondents typically choose investment professionals to serve in governance roles, citing prior experience serving as board members as the most important factor. In other words, the people most frequently chosen to serve on boards are those who have previously served on boards.

Board representatives have a powerful influence on how startups perform, and it’s essential for directors to conduct themselves responsibly, as venture capitalist Lisa Suennen details in her interview with Joe Mandato. Investors serving on portfolio company boards, either as directors or observers, receive privileged information about what’s happening at the company, although that information may not always show the whole picture. A board role also provides an opportunity to influence the management team by providing constructive feedback on strategic decisions, questioning the team’s assumptions, and identifying ways investors’ networks can help the company with its business. A board representative from a corporate investor can additionally provide insight and assistance with commercial deals, as our co-founder Scott Lenet explains.


We developed a 15 question survey and distributed it on Survey Monkey from November 2017 to February 2018. We also collected responses at the Global Corporate Venturing Innovation Summit in Monterey, CA in January 2018. The survey focused on (1) whether (and how often) the corporation pursues a director or observer role, (2) what types of individuals serve in those roles for the corporation, and (3) what factors affect who fills those roles.

Representatives from 31 corporate venture capital units responded to the survey. The majority of respondents are senior members of their investment teams and over 30% are women. Respondents’ corporate venture teams are typically small, with fewer than five investment professionals on average.

The majority of respondents are senior members of the investment team — these individuals are best qualified to describe their firm’s board role policies and preferences

Over 30% of respondents to the survey were women, higher than the 7.4% representation of women in institutional venture capital funds. We may perform additional research in the future about the representation of female investment professionals in corporate venture capital, versus traditional institutional venture capital.

Gender distribution of respondents

The corporate venture capital units in our sample are relatively small. More than half the CVC units in our sample maintain teams with ten or fewer investment professionals.

Number of investment professionals on respondents’ teams

The parent companies of these units operate in a variety of industries, with the greatest representation from technology, transportation, industrial, and media corporate parents.

Distribution of parent company industries across survey participants

On average, these corporate venture units are young, having existed for 1–3 years, but with a significant number of respondents representing CVCs that have existed for more than 15 years.

Question: How old is the venture capital effort?

65% of the units in our sample are not structured as funds, implying that most of these corporations invest cash from the balance sheet.

Question: Is the effort structured as a fund?


Our results show that all the corporations we surveyed prefer some form of board representation. 83% of survey respondents serve as director and 90% serve as observers. Every respondent’s firm designates either a director or observer on portfolio company boards, with 73% serving as both directors and observers. This likely indicates that when they make investments, corporations value the ability to monitor their portfolio companies just like institutional investors, to provide insight and assistance based on their expertise and relationships.

Question: Does the corporation seek representation on portfolio company boards?

Though all respondents seek board representation, there does not appear to be a pattern for how frequently board roles are sought. Future research may explore what factors drive a corporation to engage at the board level.

Unlike in institutional funds, where the lead partner on the deal most often serves as the director or observer, corporate VCs have more options when deciding whom to install on the board. Our survey contemplated three options: 1) a member of the investment team, 2) an operating executive from the corporation, or 3) a third party “friend” of the corporation (as Intel Capital did under previous leadership). Each approach comes with trade-offs. An investment professional from within the corporation is likely to have experience acting as a board director. An operating executive probably has domain expertise to help the startup, but may not have experience acting as a private company director. In both cases where an employee of the corporation is on a startup board, the corporation may be concerned about legal risks associated with board roles. To address that risk, a corporation could choose to appoint a third-party “friend” to the board role. However, some outsiders may be too removed from the corporation to deliver strategic benefit.

While we hypothesized that corporations might favor operating executives as board representatives due to their domain expertise, the data indicate other factors drive the board representative decision. 50% of respondents who staff director roles and 64% of those who attain observer roles always place an investment professional on the board.

Question: How often is the board representative an investment professional?

Though less frequent than investment professional representation, operating executives also serve on portfolio company boards. These executives are slightly more likely to serve as directors rather than observers.

Question: How often is the board representative an operating executive?

Individuals external to the corporation rarely serve as representatives of a CVC on portfolio company boards. As discussed above, a “friend of the firm” might be too far removed from the objectives of the corporation to serve as an effective board representative.

Question: How often is the board representative a “friend of the firm”?

Respondents indicated that expertise matters, but it is experience acting as a board member and interacting with institutional VCs that they believe is most important, not domain knowledge.

Question: Factors in board representative selection

While respondents most frequently cited expertise as the most important consideration when selecting a board representative, they cited legal risks as the second most important factor.

Some respondents provided further information on the factors that affect their selection of board representative, supporting the notion that experience as a fiduciary drives these decisions:

“An investment professional from our fund [serves on the board] to create independence between the business units and our portfolio”

“We never have executives from operating units sit on boards, as we like to maintain separation”

“[Whoever] led the deal usually observes on the board”

“The venture professionals are experienced board members who understand how early-stage boards operate”

These results indicate corporations actively engage with portfolio companies at the board level. We recognize that that there may be bias in the responses, as those who take an active role as directors and observers may have been more likely to complete the survey. Despite this caveat, these results can provide new and experienced corporate venture professionals with potentially helpful benchmarks for minority investment governance policies.

Liked what you read? Click 👏 to help others find this article.

Selina Troesch ( is a Senior Associate at Touchdown Ventures, a Registered Investment Adviser that provides “Venture Capital as a Service” to help leading corporations launch and manage their investment programs. Selina leads the firm’s research practice. Touchdown’s President Scott Lenet contributed to this article.

Unless otherwise indicated, commentary on this site reflects the personal opinions, viewpoints and analyses of the author and should not be regarded as a description of services provided by Touchdown or its affiliates. The opinions expressed here are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual on any security or advisory service. It is only intended to provide education about the financial industry. The views reflected in the commentary are subject to change at any time without notice. While all information presented, including from independent sources, is believed to be accurate, we make no representation or warranty as to accuracy or completeness. We reserve the right to change any part of these materials without notice and assume no obligation to provide updates. Nothing on this site constitutes investment advice, performance data or a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Investing involves the risk of loss of some or all of an investment. Past performance is no guarantee of future results.



Selina Troesch
Risky Business

Intuit Ventures Principal. Venture Capitalist. USC MBA. Silicon Valley Native. Swiss Miss. Lifelong Dancer.