Erevena launches the third year of the Non-Executive Salary Survey, expanded to examine the diversity of boards.
The Erevena study into Boardroom remuneration in high growth businesses provides a well-needed data source for Non-Executive Directors in private companies, particularly those that are venture-backed. Whilst Non-Executives are a mainstay of public companies and are used heavily in private equity backed businesses, the venture capital space has been slower to utilize the experience of Non-Executives. Previously where they were used, funds often leant on exited CEOs or Founders, limiting the diversity of candidates available and remunerating them solely through shares. The last 3 years of the survey have demonstrated significant steps forward.
We are now experiencing a more systematic use of Boards and Non-Executives in this sector. Founders and Investors better understand the benefits of having experienced and independent executives around the Board table much earlier that pre-IPO. Non-Executives provide an access point to talent and experience beyond what young companies can often afford in their Executive Team. Having access to senior people with specialist sector knowledge, or the understanding of scaling or exiting/ floating a company is of huge benefit.
We have seen a greater appetite over the last 12 months to diversify the Boardroom. Diversity remains a subject most often aligned to gender, but diversity of background, race, religion, thought and experience are all extremely valid and additive perspectives. This has led us this year to more acutely focus on the area of diversity within our survey, and specifically it’s perceived impact on the Boardroom discussion. We are keen to understand from both Directors and Executive Team members participating in the Boardroom, the extent to which there is a consciousness around the need for diversity, and the extent to which teams are actively seeking to add diversity into the discussion.
Alongside this evolution of the survey, we continue to track compensation trends. Whilst compensation for Non-Executive work in venture backed businesses remains varied, the days of stock only packages appear to be diminishing, with Founders understanding more acutely the benefit of compensating Non-Executives in both cash and equity. The relationship between independent board members and the businesses they work for is formalising and that is being reflected in compensation.
The 2019 Erevena Board Salary survey is run in conjunction with Anthemis Group, Balderton Capital, and Smedvig Capital. We’re very grateful for the time and effort taken by each participant and hope to create a helpful reference point for NEDs and Chairs looking to work with growth companies and for Founders and Funds looking to diversify their boardroom. The full report will be available to participants following the launch event in early October.