More than 60% of tech CEOs admit to not being totally honest with their boards. Nearly two-thirds of boards do not include any women. This is the result of a new survey released on Thursday by Startup Snapshot, a data-sharing platform for the startup ecosystem,
According to the report, which surveyed over 300 companies and investors, startup CEOs are not being upfront enough, with 61% of startups indicating that they are not entirely transparent with their board members. The CEOs admitted to attempting to appear in control, with the majority of founders postponing revealing bad news and sugar-coating serious obstacles and setbacks.
With the market’s flood of cash, early-stage startups are raising large amounts faster than ever before. The bigger checks come with higher expectations from increasingly knowledgeable investors, requiring companies to deal with the increased complications of a growing boardroom. As a result, the board, which can be a valuable asset for a fledgling firm, frequently becomes a source of contention for the CEO, causing more stress and disputes than concrete benefits.
The survey, produced by Y. Benjamin Strategic Marketing in collaboration with Intel Ignite, Samsung Next, Leumitech, and Yigal Arnon & Co., also revealed that boardroom difficulties are more widespread than many people believe.
Twenty-eight percent of startups said their board of directors vetoed their decision. Thirty-six percent of them reported having a “difficult” board member, with the figure rising to 43 percent for startups raising more than $10 million.
CEOs also reported that they are unwilling to seek assistance from their boards of directors, viewing it as a show of weakness. Eighty-one percent of investors said they want their portfolio businesses to assign them particular duties to assist with, but just 30 percent of CEOs said they were extremely comfortable doing so.
“We notice that it is difficult for CEOs to achieve open and transparent communication with their boards,” said Yael Benjamin, Founder of Startup Snapshot. “They’re battling to transition from fundraising mode, where they’re trying to impress investors, to this position where they perceive them as board members who will identify the issues and flaws.”
In recent years, public corporations have been under greater pressure to diversify their boardrooms, which have typically been controlled by white men. In boardrooms around the world, a subtle but persistent trend is visible. Private firms are not obligated to reveal their board memberships, therefore, the shift has been even slower. Compared to global estimates, Israeli board diversity lags significantly, with only one in every three firms reporting a woman on their board, compared to 51 percent in the United States, according to Crunchbase data.