Corporate
Jun. 2, 2020
The first outside director
Little is known about the process by which pre-IPO companies select independent, outside board members — directors unaffiliated with the founder or investor groups.
David F. Larcker
Professor
Stanford Business School
Brian Tayan
Researcher
Stanford Business School
Little is known about the process by which pre-IPO companies select independent, outside board members -- directors unaffiliated with the founder or investor groups. Private companies are not required to disclose this information, and they are not subject to public company rules that define independence and require independent directors and committees. Instead, board choices are driven largely by insiders to address specific issues facing the company. The result is that a startup goes from...
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