Does Microsoft’s Board Need a Shakeup?

With Microsoft (MSFT) expected to anoint enterprise and cloud boss Satya Nadella momentarily as its chief executive successor to Steve Ballmer, does the vendor’s nine-member board of directors also need a shakeup?

Keep in mind Microsoft is mulling a raft of simultaneous, tectonic shifts on a number of fronts, including: Nadella’s ascension; possibly transforming Bill Gates from chairman to technology godfather; absorbing the $7.2 billion Nokia (NOK) acquisition; and digesting new board member Mason Morfit, activist investor ValueAct president who’s likely to push for fewer consumer products and more business software and cloud services sales.

Add in that Microsoft only a few months ago redefined itself as a devices and services company, trying to foster an internally collaborative rather than combative environment. While it may be too much to say the company’s in an upheaval, it’s not enough merely to say there’s a lot going on up in Redmond.

Should Nadella get the nod, one observation making the rounds is that he’s a safe pick for the board, reflecting its conservative leanings against a full-fledged departure from the blueprint Ballmer’s already put in place. A strategy that seems to be working, judging from the vendor’s stellar Q2 performance.

On the other hand, the board’s so-called staid nature—with four of its seven independent directors seated for more than nine years—may not reflect enough youth to guide the vendor toward the new, innovative technologies it will need to progress under Nadella. In other words, does Microsoft’s board need the nerve that only fresh members could deliver?

Of Microsoft’s seven independent directors, five have held their seats for at least four years—one at four years, another at nine years, two for 10 years and another for more than 30 years. More importantly, none of the longer-serving directors have a technology-flavored background.

In fact, the board’s non-Microsoft members include four with finance or capital experience and only three whose backgrounds are IT-related. For example, David Marquardt is a 34-year venture capital veteran and a founding member of Microsoft’s board since June 30, 1981. Charles Noski, a former Bank of America vice chairman and CFO, has served on Microsoft’s board since November 2003. Dr. Helmut Panke, a former BMW top executive, joined Microsoft’s board as a nonexecutive director in November 2003. And, Dina Dublon, a former JPMorgan Chase CFO, has been a Microsoft director since March 2005.

Technology experience is commanded only by the board’s junior members, all of whom have four years or fewer as directors. Dr. Maria Klawe, Harvey Mudd College president and former dean of engineering and professor of computer science at Princeton, is a four-year board member, joining in March 2009. Stephen Luczo, Seagate’s (SEA) president, has been a Microsoft board member for a year and a half, and John Thompson, former Symantec (SYMC) chief and IBM (IBM) top executive, has been a director for about two years.

Thompson’s name has been bandied about as Microsoft’s new chairman should the board elect to replace Gates in that role. He is said to be uninterested in the job.

According to the Seattle Times, when Ballmer retires and if Gates slips out of his chairman’s spot but retains a director’s seat, he and Nadella would be the only board members living in the local area, in stark contrast to the company’s heyday. Moreover, a number of its directors reside now in enemy territory in Microsoft-bashing Silicon Valley. Going forward, that may not color the board’s input on the company’s strategy, but the absence of local flavor is noticeable as the company morphs into a new entity.

As an insider well-schooled in Microsoft’s tools for businesses, Nadella may benefit as much from the business and finance experience of Microsoft’s board as he would its technology perspectives. But as the company latches on to innovative new technologies, a more youthful look and feel might afford him—and the company—larger dividends.