The argument that "startup board governance has not kept up with the pace of innovation," is problematic for the following reasons:

1. There is a difference between the nature and context of the corporation, and the role of the board that governs it. In relation to start-ups, the corporation goes through enormous change and capability as it ramps up to sustainability and maintainable profits. However, the Act, and particularly the Act in relation to it's corporate obligations and those of directors, essentially and generally do not change, regardless of the corporation's context, maturity or size. Therefore to suggest that "governance" needs to evolve at the same pace with the organisation's context is somewhat misleading since the Act doesn't evolve therefore "governance reuirements are relatively fixed" particularly compared to the hyper-growth of some corporations.

2. The issue isn't so much (as I see it) that start-up governance per se isn't evolving; but rather that directors and managers are failing to understand the evolving nature of the relationship between shareholders, managers and directors. This is not an easy path and many stumble along it: some directors are too remote and aloof (acting like top100 directors) when what is needed is much closer involvement to guide more practically the activities and directions of staff and the corporation. Simlarly, but to the opposite extreme, some directors get too "close" when in fact they should act more "remotely" and start nuturing management to use more appropriate processes and procedures (and have the guts to make certain decisions)  and the corporation through to adoption of "traditional" board/CEO/management relationships, procedures and processes.

3.  The causes of this dilemma varies. Sometimes it is the well-meaning "fault" of directors. Sometimes it's the chairman, sometimes its the shareholders and sometimes it's management. More often than not, particularly in start ups, it a combination of all of these - particularly when shareholding, executive directorship and management overlap and are rolled into one or a few people and when they can't separate one role from the other.

4. My experience with about 50 start-ups, is that the cause of the problems generally rest with the founder/CEO who fails to understand the board requirements and who has controlling equity and can thus sack Chairman and / or directors. There is a big difference between a start-up enterprise and an established small company - generally the latter has an evolved and bedded-down governance structure (more than merely a nascent one).

5. Sometimes a start-up appoints a known chairman who brings the company credibility but the chairman's skill rests within substantial enterprises, and not with start-up ventures. Failure to tell the difference between the needs of both are common.

6. On nearly all the start-ups that I have been involved in, the call on directors is often more intensive than in larger corporations. This is for three reasons: the corporation at start-up doesn't have the internal skills to resolve some issues; the corporation doesn't have the financial resources to hire external consultants to solve some issues; the CEO (most often) is the "inventor" of the business and is good at whatever he/she "invented" as the rationale for the business, but lacks the broad corporate skills inevitably needed to grow a business on all operational and strategic dimensions. Thus with a dearth of internal skills, directors are called upon to engineer a response. In the larger corporation blessed with more resources and skills, directors are more often required to adjudicate the recommendations of others, rather than engineer solutions themselves.

Directors (and managers) who fail to understand the evolving relationship of each party in the corporation's evolution will inevitably step on someone's toes and / or cross the line of appropriateness.