Handling an Underperforming Board Member
Of all the governance conversations that biopharma boards avoid, the one about an underperforming director may be the most avoided of all.
There is an obvious reason for this. In most other organizational contexts, performance management flows downward — from the board to the CEO, from management to employees. The board itself sits outside that hierarchy. There is no obvious authority to hold a director accountable, no standard process for addressing it, and no cultural norm that makes the conversation feel normal. The result is that boards quietly tolerate directors who are not contributing — sometimes for years — while the organizational cost accumulates in ways that are real but difficult to quantify.
This is a governance failure. And like most governance failures in biopharma, its consequences compound over time.
What Underperformance Actually Looks Like
Before addressing how to handle the problem, it is worth being precise about what it is. Board underperformance is not a single phenomenon — it takes several distinct forms, and the governance response should be calibrated accordingly.
Disengagement is the most common pattern. The director misses meetings, arrives unprepared, participates minimally in discussion, and is essentially absent from the governance function even when physically present. This is sometimes a capacity problem — the director is overextended across other commitments — and sometimes a motivation problem. The distinction matters for how to address it.
Domain obsolescence is a subtler issue. A director who was recruited for specific scientific, commercial, or financial expertise may find that the company has evolved in ways that render their particular knowledge less relevant. The oncology clinician who was invaluable when the company was designing its first trial may be contributing less when the company's primary challenge has shifted to commercialization strategy or regulatory navigation in a new geography. This is not a character failure — it is a structural mismatch that the board, collectively, has an obligation to identify and address.
Behavioral problems are the hardest category. A director who dominates discussions in ways that suppress other voices, who engages in interpersonal conflict with management or fellow directors, who pursues a personal or institutional agenda that is not aligned with the company's interests, or who leaks confidential information creates harm that goes well beyond missed contributions. These situations require a different and more urgent response.
Conflict of interest occupies its own category. A director whose other affiliations have created an ongoing or structural conflict — one that cannot be resolved through recusal in individual instances — presents a governance risk that is ultimately incompatible with continued board membership.
Why Boards Fail to Act
Understanding why boards consistently fail to address director underperformance is necessary for overcoming it.
The first reason is structural. In venture-backed biopharma, many board seats are held by investors — individuals whose presence on the board is a condition of the financing, not a product of a formal nomination and evaluation process. Addressing the performance of an investor-director raises the relationship with the fund, not merely with the individual. Boards that have navigated challenging financing environments are understandably reluctant to add a governance confrontation to an already complex institutional relationship.
The second reason is social. Board members are often peers — people of comparable professional standing who have been recruited into a collaborative relationship. The interpersonal cost of telling a peer that their contribution is inadequate is real, and in the absence of a formal process that normalizes the conversation, most directors choose to absorb the cost rather than initiate it.
The third reason is procedural. Most early-stage biopharma boards have no formal director evaluation process. Without a regularized mechanism for discussing performance, there is no obvious moment to raise a concern, no shared vocabulary for doing so, and no established path from identification to resolution.
Building the Governance Infrastructure to Address It
The most important thing a board can do about director underperformance is create the conditions that make addressing it possible before a problem exists.
Formal board self-assessment. A structured annual evaluation — even a simple one — creates a legitimate context for discussing individual contributions. When every director is evaluated as a matter of routine, a conversation about a specific director's contribution becomes an application of the existing process rather than a personal attack. The assessment should address attendance and engagement, preparation quality, the value of individual contributions to discussion, committee participation, and the ongoing relevance of each director's expertise to the company's current stage and challenges.
Term limits and renewal expectations. A governance framework that establishes explicit expectations about director tenure — including the possibility that board composition will evolve as the company's needs change — normalizes the idea that board membership is not permanent. This is particularly important in venture-backed settings where investor-directors may assume their seat is unconditional. A governance document that establishes the expectation of performance, even if it cannot compel the departure of a fund's representative, creates a basis for the conversation.
Clear committee responsibilities. Directors who have defined committee roles have a clear standard against which their contribution can be measured. A director who is nominally on the audit committee but never engages substantively with the audit function is visibly underperforming against a defined expectation — which is a different and more tractable problem than the vague sense that someone is not contributing.
Having the Conversation
When a performance concern has been identified and the informal mechanisms — a quiet word from the chair, an adjustment of committee assignments — have not resolved it, the board must have a direct conversation.
This conversation belongs to the board chair, or in the absence of a functioning independent chair, to the lead independent director. It should not be delegated to the CEO, who lacks the standing and the institutional relationship to make it effective.
The conversation should be direct but not adversarial. The chair is not delivering a verdict — they are opening a dialogue about whether the current arrangement is working for the company and for the director. In many cases, this conversation will surface a legitimate reason for the underperformance — a personal situation, an overcommitment, a mismatch between the director's expertise and the company's current needs — that can be addressed through a restructuring of responsibilities, a voluntary transition to an advisory role, or a mutually agreed timeline for rotating off the board.
The goal is a resolution that preserves the relationship and the director's professional dignity while addressing the governance problem. Forcing the issue in a way that creates a public conflict or poisons the institutional relationship with an investor fund is rarely worth the cost.
But the conversation must happen. Boards that have established a culture in which the chair can address a director's contribution directly — without it being read as a personal attack or a political maneuver — are far better positioned to maintain the governance quality that the company's shareholders deserve.
The Investor-Director Problem
The hardest version of this challenge involves a director appointed by a fund whose financial interests in the company create a complex institutional context for any governance conversation.
This situation requires a realistic assessment of what is achievable. If the underperforming director is the fund's designated representative, the meaningful conversation is likely to be with the fund's managing partners — not with the individual director. The board chair, working through the CEO if appropriate, can raise the concern at an institutional level: the company values the fund's ongoing engagement and wants to ensure the board relationship is productive for all parties. This framing invites the fund to respond — either by increasing the engagement of its existing representative or by offering a substitution.
This conversation is uncommon and uncomfortable. But it is not unprecedented. Funds that take their governance obligations seriously will engage with it honestly. Funds that do not will reveal something useful about the nature of the institutional relationship.
In the most extreme cases — where a director's presence is actively harmful and neither informal resolution nor institutional dialogue has produced a change — the board may need to consider whether the governance documents provide any mechanism for removal. In most venture-backed structures, the mechanisms are limited. The realistic outcome may be managing around the director — ensuring that material governance work happens in committees or subgroups that do not include them — while documenting the situation and managing it as a fiduciary risk.
A Note on What This Is Really About
The underlying principle is straightforward: the board is accountable for the company's governance, and the quality of that governance depends on the contribution of each of its members. A board that tolerates sustained underperformance from one of its directors is implicitly accepting a lower standard of governance than the company deserves.
This is not a comfortable standard to hold. It requires the board to turn the accountability function — the one it applies to management — on itself. Boards that are willing to do this, and that build the structures and the culture that make it possible, tend to function better in every dimension: more honest debate, more rigorous analysis, more effective oversight. The investment in governance quality compounds in the same way that neglect does — just in a more useful direction.
Lawrence Fine is CEO of AGCP Farmacêuticos and has advised on governance structure and board dynamics across life sciences and advanced materials companies.