Silicon Valley Director’s Exchange – Small Cap Companies: Ins and Outs for Boards of Directors
Governance for small cap companies (whose market capitalization is generally between $300 million and $2 billion) can be quite different from that of large cap companies. Corporate governance is not one-size-fits-all and small cap boards of directors face several unique challenges. Small cap companies often have a particular “do or die” pressure to grow and evolve and are generally more vulnerable to financial crises and global events. At the same time, most small caps are large enough to be subject to the full complexity of regulatory compliance and yet may not have the scale and resources to readily navigate these issues as compared to larger companies. In some cases, small cap companies are easier targets for activist investors, lack deep relationships with institutional investors, and are more vulnerable to outside forces in general. This session will review these issues and discuss how directors might best build trust within a small cap board and with the company leadership as part of the strategy to address these unique challenges.