The full text of each chapter is below; the PDF adds the tables and the endnotes.
Chapter 1
Smaller boards, built around the owners
A private equity-backed board is small, and weighted toward the people whose capital is at stake.
Private equity investors prefer a board of five to seven members: over 90% of those surveyed chose that range. Seven seats (47% of answers) and five seats (33%) were the most common choices.
The preferred board has about three directors from the sponsor, one or two from management and one or two outside directors who are affiliated with neither.
McKinsey puts the median board of a private equity-backed company at seven directors. The average S&P 500 board had 10.6 directors in 2026, 9.1 of them independent.
A study of UK public-to-private buyouts found boards about 15% smaller after the transaction, with sponsor representatives holding 39% of the seats (deals from 1998 to 2003).
Sponsors also staff for operations. In the same survey of investors, about 16% of investment professionals at the firms worked only on operational value creation.
Chapter 2
Venture boards change with every round
A venture-backed board starts small and entrepreneur-led, and changes as the company raises capital.
A study of 7,201 venture-backed startups (2002 to 2017) found that at the first venture round the average board has 3.6 members (median three), and entrepreneurs most often control it. Over a company's private life the average board has 4.4 seats: about two venture investors, 1.7 executives and 0.8 independent directors.
After the first round, 48% of boards were controlled by entrepreneurs and 20% by venture investors. By the fourth round, venture investor control was the most common arrangement, at 63%.
On the median board, the independent director joins after the second financing and holds the deciding vote: two entrepreneur directors, two venture directors and one independent. In about a third of observations neither side holds a majority.
The balance has shifted toward entrepreneurs. The share of startups whose boards were majority-controlled by venture investors after the second round fell from about 60% for companies founded in 2002 to about 25% for those founded in 2013.
Venture investors take a board seat in 43.9% of their investments on average: 61.5% when they lead the round and 35% when they do not. The median venture-backed board has five members.
The industry's model documents describe the seats directly. The NVCA model voting agreement provides for directors designated by the preferred holders, directors elected by the common holders (one of which can be the chief executive's seat), and a mutual director, who is not affiliated with the company or any investor and is chosen by agreement of the other directors.
Chapter 3
What these boards spend their time on
Directors who have sat on both kinds of board describe private equity boards as focused on value creation.
In McKinsey's 2024 survey of boards, those of private equity-backed companies reported 21% more meeting time on strategic initiatives than public-company boards. 47% of them said they have a very high impact on value creation; in the same survey, public-company boards reported 11%.
In the same survey, directors of private equity-backed companies reported 55% more time with shareholders, 41% more with management and 19% more with customers and employees than public-company directors.
Executives interviewed in the UK who had served on both kinds of board described the value-creation focus of private equity boards, and board information that is primarily cash-focused.
Ownership is shared with management. Private equity investors report that management and employees hold 17% of a company's equity on average, about 8% of it with the chief executive.
Private-company directors report about 150 hours a year on their most complex board, against about 321 hours for public-company directors.
In a 2025 survey, 90% of respondents said their private company pays its directors, and 37% grant long-term incentives. Venture- and private equity-backed companies have historically used long-term incentives most, at 74% prevalence.
Chapter 4
Who gets the independent seat
On a board of five to seven, each outside seat counts. Directors describe what independents add, and who chairs the committees.
90% of survey respondents at private companies owned mainly by private equity, and 90% at those owned mainly by venture investors, say their board has at least one independent director.
Where those committees exist, an independent director chairs the audit committee at 65% of private companies and the compensation committee at 65%; 26% of respondents say an independent chairs the board.
Financial experience is the most common background of S&P 500 audit chairs: 65% of S&P 500 audit committee chairs are former financial executives, chief financial officers, treasurers or public accounting executives; another 19% are retired chief executives, chairs, presidents or chief operating officers.
Sponsors also draw on their own networks of advisors. Almost half of private equity firms surveyed use senior advisors or a CEO council and 38% have an advisory board, almost two-thirds one or the other; the firms list serving on boards after an investment among these advisors' roles.
Networks matter in venture capital too: a larger network of outside directors and managers is associated with a venture investor taking a board seat.
What private-company directors say independents add
- A sounding board and adviser to the chief executive: 77%
- Advice on strategy: 75%
- Balance between the views of management and owners: 74%
- Oversight of financial reporting and risk: 45%
- Chief executive succession: 43%
Chapter 5
Readying the board for a listing
A sponsor-backed company that plans to list can rebuild its board in stages, before and after the IPO.
Spencer Stuart advises companies preparing to list to start with a core group of seven to nine directors and the three standing committees, with an audit chair who brings financial expertise and public-board experience; retired chief executives, chief operating officers and chairs are a growing pool of audit chairs.
In 86 sponsor-backed U.S. IPOs from 2021 to 2025, 90% of the companies were controlled companies after the IPO, 87% gave the sponsor the right to designate directors, and the median board had nine directors.
Exchange standards allow the board to change in phases. On the NYSE, a company listing at its IPO has one year to reach a majority of independent directors; its audit committee needs one independent member at listing, a majority within 90 days and all independent members within one year of the effective date of its registration statement.
Nasdaq Rule 5615(b)(1) follows a similar sequence: one independent audit committee member by the listing date, a majority within 90 days and all within one year of the effective date of the registration statement, and twelve months from the listing date to reach a majority-independent board.
A company in which one holder or group controls more than 50% of the voting power for directors is a controlled company. Under the NYSE standards it need not have a majority-independent board or fully independent nominating and compensation committees, but the audit committee standards remain in force.
Chapter 6
For executives seeking a board seat
Who new directors are, and what the research suggests for executives seeking a seat.
The S&P 500 added 364 new independent directors in 2026. First-time directors were 24% of them; 62% of the first-timers were still actively employed, and 34% were financial executives such as chief financial officers, bankers, investors and accounting executives.
Across the 2026 class, retired executives were 54% of appointments, and 64% of new directors brought chief executive or financial experience. Women were 29% of new directors.
At 807 heavily funded U.S. venture-backed companies, women held 28% of independent director seats and 17% of all board seats, up from 7% in 2019.
What the findings suggest
- Know what the seat is for. On a board of five to seven, ask which need the outside seat is meant to meet, such as an audit chair, an industry operator or experience of taking a company public.
- Financial reporting experience travels. It is the most common background of S&P 500 audit chairs, and independents chair 65% of private-company audit committees.
- Relationships matter. Sponsors draw on senior advisors, CEO councils and advisory boards.
- Plan for the time. Private-company directors report about 150 hours a year on their most complex board.
Chapter 7
The CrossWork Advisory Board
How CrossWork brings operating experience to the late-stage companies it looks at.
Through its advisory board, CrossWork has access to exceptional late-stage opportunities. Members who have run public companies, laboratories and national institutions bring CrossWork deal flow in the fields they know, and the due diligence to read each company before CrossWork forms a view.
To keep the standard of the board, membership is by invitation or referral from a current member.
