Hey! This is Matt Heimer, who will be filling in for Jessica Matthews this morning.
Startup stories make founders legendary and lionized—the ambitious, inspired geniuses who turn good ideas into great companies. But when they first learned about startups, whether here in the Term Sheet or elsewhere, those founders surrounded themselves with an invaluable supporting cast: the board of directors.
Big boards can elevate beginners to juggernauts; The weak look the other way and miss the warning signs because failure leads to a dumpster fire. And as enterprises grow larger, their organizations expand their reach and responsibilities, their boards become more important, providing strategic advice and reality checks to executives.
this week, Chance They’re recognizing these best supporting actors and actresses in corporate drama with a new list: The Fortune Modern Board 25, recognizing the most innovative boards of directors of S&P 500 companies.
The instruction behind Fortune’s Modern Board 25 is simple: Who’s in the room matters. As my colleague Aman Kidwai writes in an article accompanying the list, directors (and the leaders they advise) are being asked to take on more issues and represent more stakeholders than ever before. “Boards are taking a more active role in corporate affairs,” Amann explains, “and they weigh in more often on issues like diversity, employment and environmental impact.”
The boards that score the highest are the ones that bring a broader voice to those conversations. Diversity matters, in the broadest sense—gender and nationality, as well as age and expertise. So does independence: Your business-school buddies and retirees from your own C-suite may be amazing people, the thinking goes, but they lack the objectivity to offer the best advice. (Amman and Chance Details editor Scott DeCarlo has teamed up with corporate-management software company Diligence to develop The Modern Board Standard; You can read more about our method here.)
Our No. 1 finisher, Microsoft, is a case study in such scope. Eight of its 12 board members identify as women or people of color. But it also includes executives who hold or have held C-suite posts in finance and pharma, as well as other tech giants — people whose perspectives have not been shaped by spending their careers on Windows, Halo, and Azure. .
We hope this list will give you some ideas on what to look for in an advisory team, whether you are an investor, founder, both or both. Let us know what you think!
Matt Heimer
Senior Features Editor
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