Amazon, Apple, Google, KPCB. Who's on Your Board?

Okay, let's start with a disclosure which - for all of you who read anything of mine will already know - I am a big fan of Amazon, Apple and Google.

But what you may not have known is that I am also a big fan of John Doerr.  I have two definite but very different reasons for this.

First of all, the guy is a visionary and he's willing to put his money (and others', of course) into creating the future.  As a partner in the legendary venture capital firm Kleiner Perkins Caufield and Byers, he has been responsible for bringing companies into being that would, in other hands, have been passed over.

There are those who are firmly convinced that the Internet wouldn't look like it does today - with all its possibilities and opportunities - were it not for Doerr.

But why I'm also a fan is because Doerr is a gentleman.  The reason I know that is because, years ago, I wrote him a letter.  It doesn't matter about what now.  What does is that he wrote me back - and it was clear that he had read what I wrote and responded accordingly.  He paid me the respect of a reply.

Funnily enough, there had been an administrative mistake made and I also received a letter that was supposed to be sent to someone else.  In that letter there was information that should not have fallen into anyone else's hands.

Upon receiving it, I immediately called his office, spoke with his secretary to let her (and him) know and put the letter back in the mail to their offices.

I got a personal thank you note.

This from a guy who was sitting on the Boards of what already were - and still are - the most powerful technology companies in the world.

I'm a fan because I'm always a fan of people who do things - big and small.  But I'm an even bigger fan of people who are respectful of others.  That has a value far beyond money.

So now that we've taken care of the disclosures - and Miss Manners - portions of this post, let's get to the meat of the thing.

You'd better know who's sitting on your Board.  And you'd better know what else they're involved in.  Because if you're the Chief Executive and you're not watching out for potential conflicts of interest, you're going to be the one in trouble.  Even if you've got a Non-Executive Chairman.

We're in the early days of this - but it's going to get much worse.  So you'd better start paying attention now.

Regulation and governance are big ticket items in the press these days.  Legislators worldwide are talking about how industry needs to be better regulated.  Protections need to be put into place.  Executives - and particularly Chief Executives - need to be watched.  They can't be trusted - or so it's said.

Sure it's mostly the banks that are caught in the talking-head crossfire - but if you look at where the attention is being paid, it's not as much in the banks and other financial institutions as it is elsewhere.

My theory is that that's because it's easier to have regulatory bodies like the US's FTC and SEC look into potential conflicts of interest of Board members than it is for legislators to be brave enough to create the types of legislation and regulation that would actually reform and monitor the banking industry.

That means that every company other than banking needs to watch out.  Big time.

Most recently we've seen this because of the cross-pollination of Board members in the technology space that are systematically being de-pollinated.

Google's Eric Schmidt had to step down from his Board position at Apple.  And Arthur D. Levinson, the former CEO of Genentech, had to step down from Google.  Now John Doerr has to step down from his position on the Board of Amazon.

The Federal Trade Commission never actually put its foot down and said, "Do it."  Instead, a hint.  A thought.  A query.  A possible investigation.  Everybody saw the writing on the wall and made the appropriate move.

They did the smart thing - for themselves and for the companies which they served.

What you don't want is to be caught off-guard.  Between the time that someone joined your Board and now, it is more than possible that they have been asked to join another Board.  After all, their participation on your Board is quite the endorsement.  Others will want them too.

But who are those others?  What outside interests do your Board members have?

And if they're working in jobs when they become a member of your Board, are they still in the same job?  Or, if they're consulting, to which companies are they consulting?  Is your intellectual property adequately protected?  Do you have the kind of non-compete language you need in your Board's acceptance papers?

This is the case whether your Board members are paid or voluntary.  Conflict is conflict - and the problem is that, very often, conflict is a matter of appearances.  Not actuality.

But you want to keep it clean and you have to protect your organization.  That's your job.

Whether you have shareholders or are a pure-play public sector enterprise, it doesn't matter.  If you've got a Board, you have to be on the lookout.

So do yourself a favor.  If you've not recently done so, have your Board members fill out an updated copy of the form they completed about outside interests when they first joined.  And if they didn't, make sure that they do - and that all future Board members do the same as a matter of course.

Then, sit down and study the answers.  You may want your corporate counsel with you while you're looking.  That way, you'll have both the competitive and the regulatory eyes you need on what you're seeing.

And if there's a conflict - and even if it's your very best friend and most favorite Board member - do what you have to do.  They have a choice and you have to respect it.  But, first and foremost, you have to respect your organization and its needs.  That's your prime directive.

Then, when the decision is made - whichever way it goes - do the polite thing.  Write a thank you note.  It really makes a difference.