20 cent Party, page-695

Great question. In general, we look at the composition and the individuals of the Board.

For the composition of the Board, we would like to see a good representation of independent directors, as well as non-executive directors.

At the individuals level, we would look at the tenure of each individual, as well as their skills (align with the business need), career experiences and history with the company (through LinkedIn, other directorships they held etc.).

In particular, for small caps, most of the important decisions are made at the Board level. In our view, the maturity of the Board has to grow with the size of the company, especially those with MC >$100m. Ideally, we would like to see the Board playing a stronger governance role and to represent the interest of the broader stakeholder group.

In contrast, depends on the size and stage of the business, it might be a warning sign to see a stale Board consists of the same directors/chairman with long tenure (i.e. still the same small inner circle). We recently exited a stock due to weak governance being one of the alarms, despite the company looks extremely undervalued on numbers.