"Silicon Valley is no place for cronies," says John Ware, a senior director at Spencer Stuart. The executive search firm released survey results today that indicate tech companies have shuffled the makeup of their boards as a result of the Sarbanes-Oxley Act.
Outsiders comprise 83 percent of directors of valley companies, up from 75 percent in 2003. Ninety-seven percent of companies have a designated financial expert on their audit committees, compared with 11 percent in 2003. And almost two-thirds of valley companies split the roles of chief executive and board chairman, compared with 35 percent of Standard & Poor's 500 companies.
Because of Sarbox, Ware says, companies are appointing directors with more financial expertise, training them and carefully "weeding out" those who are too busy to be effective.
The survey covered 100 Silicon Valley companies whose revenues ranged from $250 million to $5 billion.