Jim Clark, the legendary technology entrepreneur who founded Silicon Graphics and Netscape Communications, has quit as chairman of the board of Shutterfly, the online photo ordering site, the company announced on Monday. (To read the official press release, click here.)
As Dealbook, the New York Times business blog, notes today, Clark cited the demands of Sarbanes-Oxley as the key reason for his departure. "As I understand it, Sarbox dictates that I not Chair any committee due to the size of my holdings, not be on the compensation committee because of the loan I once made to the company, not be on the governance committee, and it even dictates that some other board member must carry out the perfunctory duties of the Chairman," Clark wrote to the board. "What's left is liability and constraints on stock transactions, neither of which excite me. It seems pretty clear to me that lawmakers have gone too far in considering a large shareholder to be inappropriate in the roles, but it is equally clear that I have no ability to change this in the near term. My only solution is to become an outsider. I wish to be treated as such effective immediately." (To read Dealbook's coverage of Clark's resignation, click here.)
Shutterfly, which is based in Redwood City, Calif., appeared on the Inc. 500 in 2005 and 2006, ranked numbers 170 and 320 respectively. The company went public in September.
Clark, who was the subject of Michael Lewis's 1999 book The New New Thing, is among the most high profile entrepreneurs to cite Sarbanes-Oxley as a reason for dropping a board gig. Clark also notes in his farewell letter that as a technologist, he has less and less to offer Shutterfly, as it becomes, in his mind, more of a manufacturing play. What's your best guess: Do you think we'll see more folks of his caliber walk away from corporate governance altogether, as Sarbox regulation becomes more entrenched with each passing year? Or do you think Sarbox is a convenient excuse that any boardmember who wants to quit their job can cite—sort of the new "leaving to spend more time with the family"?