On Boards Podcast
A company’s Board of Directors or Advisors often has a pivotal role in the success or failure of a business, whether a company or organization lives or dies - - and whether the people who have invested time, money and emotional capital will succeed. On Boards Podcast: A Deep Dive at Driving Business Success, is about everything related to Boards of Directors and Boards of Advisors. Twice a month, in 30 minutes, hear and learn about all aspects of boards and business governance. In each episode co-hosts Raza Shaikh and Joe Ayoub interview a guest who has experience with boards - as a board member, a CEO, an investor or an advisor, among other roles, for a conversation on a wide range of topics including: What makes great boards great? What makes a board unsuccessful? How to be a good board member? How to make your board one of the most valuable assets of your company. They discuss public, private, non-profit and start-ups (which they believe is its own category) boards - the work they do, the impact they have and their potential to be profoundly impactful on the organization they serve. On Boards Podcast is for anyone who is a board member, would like serve on a board, is an owner of a business, a member of a non-profit organization, an investor in a business or is interested in Board of Directors or Boards of Advisors or business governance.
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68. Transforming D&O Insurance: Innovations in Directors & Officers Coverage
05/05/2024
68. Transforming D&O Insurance: Innovations in Directors & Officers Coverage
In this episode Michael Talmanson and Dereick Wood discuss the critical importance of D&O coverage for board members. They set the context with a backdrop of Newfront's recent capital infusion led by Goldman Sachs emphasizing the company's innovative approach to combining technology with insurance expertise. We love our listeners! Drop us a line or give us guest suggestions . Big Ideas/Thoughts/Quotes 1. Background & industry evolution · Michael shares his transition from legal practice to insurance, driven by a passion for technology and client service. He discusses how Newfront's technology platform and AI tools modernize the insurance experience, enhancing client's ability to manage and predict risks. · Dereick discusses his extensive experience in handling complex D&O claims, underlining the evolution of claims and the increasing magnitude of derivative settlements. “The differentiator is the information you can provide boards to make informed decisions about their actual losses.” 2. Newfront’s Innovation & Impact on the Insurance Market · Newfront's strategy of blending high-tech solutions with traditional brokerage services to address the needs of a rapidly changing market. Michael highlights the critical role of experts like Dereick in navigating complex claims, underscoring the blend of technology and human expertise. · Discussion on Newfront’s "breakthrough" technology which simplifies processes like contract reviews and risk assessments through AI, setting a new standard in the insurance industry. “Since 2020, seven of the top ten largest derivative settlements have occurred, and the people on my team have been involved in all those settlements” 3. D&O Insights · Comprehensive breakdown of D&O insurance coverage (Side A, B, and C) and its importance from a buyer's perspective. Michael and Dereick discuss practical scenarios and the vital protection D&O insurance provides to board members against potential liabilities and lawsuits · Dereick provides insights into recent high-profile cases and settlements, demonstrating the critical nature of D&O coverage in protecting board members during legal challenges · Strategic recommendations for board members to ensure adequate D&O coverage, emphasizing the importance of understanding policy details and the implications of board decisions on insurance claims · Michael and Dereick providing practical advice to board members on avoiding litigation and ensuring robust D&O coverage. They stress the importance of diverse opinions and backgrounds on boards to enhance decision-making and risk management “No matter what happens from a technology perspective, insurance will always require experts. People like Dereick on the claims side, D&O experts, cyber experts. People will never be replaced by technology."
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67. Michael Greeley on the trends in composition of boards in investor backed companies
04/15/2024
67. Michael Greeley on the trends in composition of boards in investor backed companies
Michael Greeley has extensive experience in venture capital and significant board experience across a multitude of investment boards. In this episode, he shares his experience and lessons learned, emphasizing the evolving nature of board governance, the strategic importance of independent directors and the future of healthcare. We love our listeners! Drop us a line or give us guest suggestions . Big Ideas/Thoughts/Quotes 1. Evolution of Board Composition of investor-backed boards Changes in the composition of investor-backed boards over the past 25 years, emphasize the need for a broader range of competencies beyond financial performance. The trend is to include diverse perspectives to help mitigate boardroom “groupthink.” "Boards today are very deliberately trying to have the right competencies... Today the pressure on boards is to have a much wider range of expertise; cybersecurity, sensitivity around DE&I issues, and we're seeing that reflected in our term sheets. 2. Challenges in Board Compliance Discussion on the difficulties boards face in complaining with term sheets guidelines, particularly around independent directors and diversity. "We did an audit... and said, 'How many of our companies actually have complied with that (term sheet requirement)?' And we were surprised, it was probably maybe half or two thirds… and frankly, if I could be just brutally honest, I think there's a little bit of an apathy to address deficiencies of boards." 3. Importance of Independent Directors The role of independent directors in providing an unbiased 'voice of the customer' to help guide company strategy and product market fit. "The power of that [independent director] is a little bit sector specific but I think it cuts across all sectors, the principal risk we take as healthcare tech investors is around product market fit, and independent directors are the voice of the customers." Governance and Board Dynamics Michael's advocacy for more effective boards and the potential pitfalls of having too many observers or management members “in the room.” "I'm a traditionalist in the sense that the board should not be stacked with management because it is meant to be the body that opines on the strengths and shortcomings." Future of Healthcare Michael's optimistic outlook on the 'golden age of healthcare' driven by technological advancements, regulatory changes, and innovative business models. "Arguably, the golden age of healthcare is upon us as the sector embraces novel and impactful solutions to improve outcomes and lower the cost of care."
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66. Nav Singh on the future of Governance and Innovation
04/01/2024
66. Nav Singh on the future of Governance and Innovation
We love our listeners! Drop us a line or give us guest suggestions . Episode Description Nav Singh has held leadership roles at McKinsey's Boston office, including Managing Partner for Boston and Leader of the Global Innovation Practice. After retiring from McKinsey in 2023, he launched a new entrepreneurial venture, called 2123iX. In this episode Nav’s shares valuable insights on effective board practices, the importance of innovation and technology in governance, and the critical role of diversity in fostering successful organizational leadership. The episode emphasizes the importance of proactive, informed, and collaborative board engagement to navigate the challenges and opportunities of the next century. Big Ideas/Thoughts/Quotes 1. 2123iX - A Century of Innovation The name 2123iX originates from Nav's retirement year (2023) and his vision to impact the next 100 years. Its focus is on creating a culture and mindset for longevity and innovation and emphasizes patience and quality in building companies that will make a significant difference. "2123 stands for a 100 years, “I” stands for innovation, “X” stands for scale. The most important thing is: we're in no rush. We want to build high-quality companies over time, we'll be purposeful and take our time doing it." 2. Board Preparation Insights from McKinsey: · Importance of thorough and honest preparation for board presentations · Engaging discussions over presentations to drive meaningful decisions. "In my mind, a good board discussion preparation requires an honest view of what are the risks, what could go wrong, what are the main issues we're trying to solve...It is that holistic view that in my mind makes a good board presentation and results in a good board discussion." 3. Characteristics of High-Performing Boards: · The balance between healthy tension and collaboration between boards and management. · The critical role of the board chair in setting a positive, inclusive culture. · The necessity of continuous learning and adaptability among board members. “Discussion is much more important than presentation. Sometimes people become enamored by our presentation and the materials. But its the discussion that you drive, the decisions that you drive that matters the most." "The most important thing is one should be on the same page. People should be on the same team. People should be working towards the same goals… and there should be some healthy tension, that's good in my mind." 4. Diversity in Board Composition: · The impact of diverse perspectives on board strength and decision-making is enormous. Beyond gender and race, diversity includes age, skills, and the ability to learn is critical. "Diversity is multifaceted and one needs to think about this in a holistic way...The most important thing in my mind is a learning ability." 5. Risk Identification and Management · Boards must think beyond the obvious and prepare for future risks. This weighs in favor of a dedicated risk committee to focus on emerging threats. “I think risk is where most boards should earn their living...Defense means, in this case, thinking about what could go wrong...It is not just the identification of risk, what is the abatement plan, who is going to work on that, how do we address it?" 6. AI and Technology on Boards · The transformative potential of AI and technology on businesses and governance is almost beyond out imagination. It underscores the importance of having board members with technology expertise and a willingness to stay informed. 7. The Greater Boston Chamber of Commerce - A Model for Diversity · In the past few years the Greater Boston Chamber of Commerce board of directors has made a successful effort to significantly increase diversity in gender and race on the board, and to broaden diversity in skills, age, and industry representation.
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65. Dr. Angela Jackson on the Needham Bank Board and the Future of Work
03/16/2024
65. Dr. Angela Jackson on the Needham Bank Board and the Future of Work
Angela Jackson is the founder of Future Forward Strategies, an award winning social entrepreneur, a global C-suite executive and an experienced board member. In this episode Angela discusses joining the board of Needham bank, a mutual bank that took itself public in December 2023, as well as her research – and her vison – of the future of work. We love our listeners! Drop us a line or give us guest suggestions . Big Ideas/Thoughts/Quotes: 1. Needham Bank Board of Directors and the decision to take the Bank public Angela discusses some of the reasons that she was interested in joining the Needham Bank Board of Directors. “The CEO, Joe Campanelli, is really a visionary leader with the strategy to support” “As a board, when we talked about the reason for going public, this is right after Silicon Valley Bank had folded and we had the banking crisis, and…a lot of banks had put a lot of restrictions on their lending. We all felt – led by Joe, that if we were to IPO at this time, we would actually have more cash to put on the street to invest in local entrepreneurs and business leaders.” Another reason to go public was around the values behind that. “They [management] wanted to do the IPO so they could invest in an employee stock ownership program, and for me and my work around the future of work, I deeply believe in companies and CEOs who are really seeing their employees as shareholders and the fact that we wanted to use the funds and to ensure that everyone from the frontlines to the C-suite could be an owner in a bank was significant.” “…we looked at building a foundation that we could invest in local communities. For over a century, we had a history as a mutual community bank, and so we wanted to continue that. The vision is still how can we be national, but also hyper-local at the same time.” We [the board] were completely aligned with how we wanted to use the money. It was values based to really invest in the community, who we're investing in, the talent and people, and then making sure that we were just being a good neighbor. “… one more piece that struck me when I saw the board listing for Needham Bank…they were looking for someone with HR and human capital experience. If you look at most board listings, that is very rare. Most boards are looking for someone who's been a sitting CEO or a CFO, maybe someone in technology. You rarely see a listing for a human resource person.” 2. Ringing the Closing bell at NASDAQ “It was an exciting moment for all of us.” “We're based here outside Boston in Needham and we're going to go to New York for the NASDAQ…We thought, how are we going to get everyone from the bank to New York, and so they came up with the idea that we're going to take these coach buses from Needham Bank, and it would travel to New York. “Now, you would think any bank CEO who's deciding to do this, maybe they would fly in, and they would be there to meet everyone. Actually, Joe Campanelli jumped on the bus with everyone else, shoulder to shoulder, to make that five-hour plus journey to New York and to take it back to be there.” “The enthusiasm, the camaraderie, it was really the feeling of what had happened, that we did this, from the front lines to the C-suite, it was because of the effort of the people in the bank that were all customer facing, some that are internal, that made this moment happen, it was amazing.” 3. Board Practices “One thing that I appreciated as I started out [as a new board member] is that we have full access to management, and we're encouraged to have a relationships with them.. If we have a question, we are comfortable going to them. And I think that transparency and access is key to really understanding what's happening and how we can best advise as a board.” 4. Decision making on the Needham Bank board I've been impressed that even during the time of the IPO when we were moving quickly, the board was willing to go slow, to go fast, so sometimes you needed to just pause for a beat, send some things back to committee, call some of our advisors to make sure we were making the best decision. “Even though we wanted to be expedient about it was just great that we had the willingness to do that…it highlights the organization's approach to leveraging existing financial aid programs for greater effect.” 5. Board Culture “Board culture starts with…deep trust and respect….for each other.” I’ve never talked to a [Needham Bank} board member or staff member who had any doubts about [going public, and I think that's a reflection of the open & honest discussion that led to the decision. 6. Future of Work “When I think about the future of work and really the future of boards, a lot of the issues that we're grappling with in the workplace today have a human capital component to them.” “The future of work is how is…how do we ensure that the people that we're working with can be there, can show up and be their best selves that's going to lead to the business outcomes that we want.” Links The SEC wants to know if your corporate employer is investing in you. Fortune.: Future Forward Strategies: https://www.futureforwardstrategies.com Bio Win Win Workplace (to be published January 2025)
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64. Charles Shirley - Effective Governance and an Advisor’s Perspective
03/03/2024
64. Charles Shirley - Effective Governance and an Advisor’s Perspective
Episode 64 of On Boards Podcast features Charles Shirley, the Northeast Regional Leader for PricewaterhouseCoopers Private Practice. The episode dives deep into the nuances of effective board governance, with Shirley sharing insights from his extensive experience advising companies and serving on nonprofit boards. Here are the key highlights: We love our listeners! Drop us a line or give us guest suggestions . Big Ideas/Thoughts/Quotes: 1. Charles Shirley's Background: Shirley brings over three decades of experience from PwC, advising a broad range of industries and serving as a tax partner. His dedication to his work and his role as a trusted advisor globally are emphasized. 2. Effective Board Meetings: Shirley discusses the importance of preparation for board meetings by management teams and the board itself. He criticizes practices where management curates materials too perfectly, leading to passive board meetings. Instead, he advocates for transparency, robust questioning, and deeper engagement in board discussions. 3. Board Member Engagement and Fiduciary Duties: The episode highlights the critical role of board members in being proactive, well-prepared, and willing to challenge management to ensure effective governance. Shirley emphasizes the fiduciary duties of board members, including accountability, forward-looking perspectives, and contributing valuable insights. 4. The Role of the Board Chair in Governance: Shirley outlines the significant impact of the board chair in setting the culture and expectations for the board. A strong chair is essential for driving change and ensuring the board's effectiveness. 5. Trends in Governance and Challenges: Shirley observes positive trends towards more inclusive and diverse board discussions and the recognition of the importance of independent board members. However, he notes challenges with remote or hybrid meetings, arguing that in-person interactions are crucial for capturing the full benefits of board meetings. 6. uAspire Nonprofit Work: The conversation also covers Shirley's involvement with uAspire, a nonprofit focused on making post-secondary education accessible and affordable. He highlights the organization's impact and its approach to leveraging existing financial aid programs for greater effect. The episode underscores the evolving nature of board governance, stressing the need for active participation, preparation, and the right mix of board composition to address modern challenges effectively. Shirley's experiences and insights offer valuable lessons for both seasoned and aspiring board members, emphasizing the importance of governance in achieving business success. Quotes 1. On Passion for Work: - Charles Shirley: "I always introduce myself as the happiest person at PwC. It's a big place, but I love what we do. I think it's incredible." 2. On Effective Board Meetings: - Charles Shirley: "What really gets my attention and gets me frustrated and actually calls me to action is when I see a process where the management team in preparing for the board meeting is really going through an exercise to curate materials that are perfectly positioned or worded or framed." 3. On Board Member Engagement: - Charles Shirley: "It truly is a privilege, whether it's in the charitable sector or on the business sector, it's an honor, it's an opportunity to be part of a board and the ask should be pretty big." 4. On the Role of the Board Chair: - Charles Shirley: "The board chair sets the culture ultimately, and culture really matters, and successful boards have strong intentions, they've done their assessments, they understand what they need to be and they're mission driven." 5. On Collaboration and Transparency: - Charles Shirley: "I'm huge on collaboration and transparency and honesty and all those good things... My excitement or engagement with collaboration isn't just in helping me dig out of holes. It's everything I touch gets better when I collaborate."
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63. Stefania Mallett: Navigating board dynamics and entrepreneurial success at an investment backed startup
01/08/2024
63. Stefania Mallett: Navigating board dynamics and entrepreneurial success at an investment backed startup
Stefania Mallett, co-founder and former CEO of ezCater, shares her entrepreneurial journey and insights into effective board governance. She emphasizes the importance of board composition, highlighting the pivotal role of understanding marketplaces and the nuances of investor-backed boards. Stefania also discusses the crucial dynamic between CEOs and board chairs, the challenges in communicating complex business scenarios to board members and the critical process of succession planning. We love our listeners! Drop us a line or give us guest suggestions . Big Ideas/Thoughts/Quotes: On Relationship Between Board and CEO/Management in Investment Backed Companies “.. it's kind of like grandparents. The board cares intensely, but in the end, they hand the baby back and you - the CEO and/or the managing team - you're the parents and you have to deal with all of the colicky moments and all of the ups and downs and all of the difficulties and so much more about what's going on inside the company.” “It doesn't matter how effective a communicator you are, having been on both sides, I can tell you that the most well-intentioned, most transparent, most forthcoming CEO cannot possibly convey to the board everything that the management team knows.” Origin Story of ezCater and Early Board “..we closed [a company I had help found] down on a Thursday. I went home and got drunk on the weekend and on Monday we started the business that turned into ezCater, which was helping make food appear for business meetings[!]” “Don't bring people onto your board who don't understand your business” Evolution of the Board through ezCater’s Journey and role of a Board Chair “we started to get more professional board members who understood our business. We lucked into someone [Chris Cuddy] at Launchpad, who understood marketplace businesses, not specifically in the catering food for work business, but he came out of online travel [marketplace]. It turns out one marketplace is a lot more like another marketplace” “we lucked into someone who became our board chair and $425 million of venture capital funding from some of the biggest venture companies on the planet later, we are now thousands of times the size we were when we first met this Chris” I don't have a velvet hammer as much as I'm impatient. Impatience is the mother of invention, and so when I watch Chris Cuddy our board chair do his work I think, "Oh my God, that's just better." He's more patient. He listens. It doesn't really take longer. It feels like a circuitous path to the answer, but it's actually about the same length of time as I would have taken with less angst, less fireworks. The founder and CEO are not necessarily the best board chairs.” Transition of CEO for ezCater “the company was ready, and I was ready, and I went to the board meeting a few weeks later and I said, "Guys, I got to go. It's time.” “We launched a search and found my successor. Because of internal discussions, because of the board's hesitation, because whatever, we ended up taking a year. We had the time, I mean it wasn't like running, screaming for the exits, and I wasn't doing a terrible job. My team was doing a super job” “When this person started, now it's three months, four months, and it's quite clear, he has experience at the 10X level. He brings in knowledge, not just "I think we should try this,"” Joe: “You have touched upon series of things that apparently apply to investor-backed companies and startups that also apply to every for-profit company, whether private or public. The importance of the chair, the importance of learning to share power - every CEO has to learn it, every founder has to learn it. Every investor, whether it's a startup or not, has to learn it.” Effectiveness as a Board Member and Over-boarding “One of the very best board members I have had in my entire career in all the companies that I've been on or on all boards I've chaired or that I've been on the board is a guy who, when I did his reference checks for him people raved about him and when I would ask, so what's wrong with the guy? Almost every one of them said ‘he's on too many boards.’ ” “It's important to remember that the board gives you a couple of things that you can't get anywhere else. One is the cadence of every X weeks or X months, you have to report to these people…. There's something about that regular cadence of having to report, that is very valuable.” The second thing you get from them is perspective. If they are good board members, they bring you a portfolio perspective. You live your life as a portfolio. You can only do one company at a time. Even more industrious and somehow energetic entrepreneurs than I do are involved in two startups at a time, but it's rare. But these people who are on your board are involved in 10 startups right now, or 10 companies at your stage right now and have seen many others, and so they can say to you, "Listen, I saw people try exactly what you tried and here's what happened to them," and you can save a bunch of time.”
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62. Diverse Leadership and AI Ethics: Jocelyn Moore on Transforming Governance
12/21/2023
62. Diverse Leadership and AI Ethics: Jocelyn Moore on Transforming Governance
Jocelyn Moore, a seasoned board member and former NFL executive, shares her diverse career experiences from Capitol Hill to the boardrooms of major technology companies like DraftKings and OppFi. Jocelyn discusses the intricate journey that led her to influential roles in corporate governance, emphasizing the importance of diversity in leadership and the ethical implications of AI in decision-making. This episode not only explores Jocelyn's remarkable career trajectory, but also delves into the broader implications of board composition and technology in modern corporate environments. We love our listeners! Drop us a line or give us guest suggestions . Big Ideas/Thoughts/Quotes: What was your NFL experience like? It was like nothing else that I've ever done. Such a tremendous lesson in the art of diplomacy with varying stakeholders, which has prepared me for a lot of the board service that I do now. Is bipartisanship in Congress possible? “I'll tell you that I think is really emblematic of how I grew up on Capitol Hill. In [Senator] Zell Miller's office, we had Democrats and Republicans both working in that office - - our political leanings didn't matter, we were all working for the people of Georgia, and that's something that really stuck with me during the 15 years that I worked in the Senate.” Power of the network leading to DraftKings board “Roberta Sidney, who you will know, and many in the audience will know - she is amazing. I've never met Roberta, she and I get on a call. We talked about the board opportunity and this particular board was not a good fit. But you know what Roberta did, because she is such a champion of people, a champion of women, she said, "Look, this may not be a good fit, but I'm going to introduce you to my friend Ilana Wolfe.” Ilana is at Goldman and is the driving force behind board diversification at Goldman's portfolio companies. I talked to Ilana and, little did I know at the time, she was this giant in the space. We talked. I told her about my background, and we left it at that. After about a month went by, she called me back and said, "Hey, Jocelyn, I have this interesting board opportunity that I wanted to run by you -have you heard of the company DraftKings?"” DraftKings Board Composition as it went Public Like most public companies before they are public, the board was largely comprised of investors, and I joined soon after it went public in April of 2022. The makeup of the board changed as DraftKings became a public company. DraftKings' commitment to inclusion, equity and belonging is very strong. At the same time that I joined the board, Valerie Mosley, a giant in Boston, joined the board, so two black women joined the board of DraftKings at the same time, and Michael Jordan became an advisor. Importance of a board with diverse perspectives “Board diversity is not a nice to have. It is a must have.” “When you think about your customer base, whether it's DraftKings, OppFi, whatever company we're talking about, when we look at the makeup of America, it is extraordinarily diverse. When we think about how we create and generate revenue, how we sustain revenue, how we create long-term value, all of those things are dependent upon our customer base. If we do not embrace diversity, we are not maximizing our revenue potential. It is as simple as that.” Angel Investing “Entrepreneurs power our economy. They are the ones who are the job creators in our country, and so to understand business and industry, you really have to go where business and industries are. And so that's why it was important for me to get involved with venture investing and angel investing to get a front row seat to industry in ways that I could have never imagined.” From the On Boards Summit 2023: The coming wave of Artificial Intelligence (AI): What questions should boards be asking? · How will your company or board be impacted by AI? · How can we use AI in the future not only internally to improve processes and the sharing of information and data, but also externally in the markets that we are in to improve the client experience, to extend whatever we are doing from a market standpoint? · We know that AI has shown biases. What are the questions that we, as good corporate citizens, need to ask about the ethics of AI? How do we best provide guardrails around AI?
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61. Culture Always Has A Seat At The Table
12/03/2023
61. Culture Always Has A Seat At The Table
Paul Braverman was a cultural force behind the growth and success of Wellington Management which currently has over $1.3 trillion under management. Since retiring in 2007, he has served on over 17 boards of directors, including boards of public and private companies and nonprofit organizations. In this episode we discuss the most important drivers of board success. We love our listeners! Drop us a line or give us guest suggestions . Big Ideas/Thoughts/Quotes: “I think the culture of Wellington is its most sustainable competitive advantage. It always has been, and the culture is basically the name of the book (I wrote) entitled: Client, Firm, Self: The History and Culture of Wellington Management Company. We believed that we existed for the benefit of our clients and that they always came first, and then the firm, and then the individual.” What was there that allowed Wellington to sustain that very, very, very strong culture for so long? What we all observed how devoted the founders were to each other, how they watched over each other, took care of each other, helped each other's families. If there were problems, we watched when one of the partners passed away how well they looked after his spouse, things like that - - we learned by observing them. I said in my final speech when I left the firm, I learned more about life at Wellington than I did about the investment business just by watching the character of these people and how they conducted their lives and treated other people. How does a board help maintain the culture of the company for which it serves? The board, I believe, sets a tone at the top, and it is a tone that we exist for the benefit of our clients or our customers. We are accountable to the shareholders. We need to take care of our employees. We need to take care of the cities and the locales that we do business in to help wherever we need to help philanthropically, and to set that tone for the rest of the company. It's not just always business and always profits. You're not going to believe this, but I never had a budget all the years that I was there. Reputational Risk: with a company like Wellington Management, which works so hard to create the culture and to create the reputation of the company – it often becomes one of, if not the, most valuable asset of a company. It's one of the most important responsibilities that a board has. The amazing thing about it, Joe, is as hard as we worked on it, as strong as it was, it's still fragile. It's always fragile. It can just be one incident. Board of One My worry is that a specialist who doesn't have the broad experience, when we finally get to the point when we have to decide about a cybersecurity attack or something, I don't want the decision to be in a vacuum by one person. Role of a Board chair I have chaired a few boards, I chair one now, and what I say to the other board members is, "Before we start, I just want you to know one thing. I work for you, you don't work for me, so I'm here serving you." I think that helps a lot. I'm very transparent. I reach out to them all the time seeking a wider audience. I set the agenda with the CEO, and I meet with the CEO once a quarter privately to make sure to see how the company's doing. I try to keep myself out of the board meeting as much as possible, other than to make sure everybody stays on track as far as time and that we cover the key points. Board Chair and the CEO. If they aren't working well together to make sure that the board is being effective, what does a board member do? To the extent that you don't like something that's going on, you have to go to your chair because at some point, you're violating either the prudent man rule or your fiduciary responsibility. We're fiduciaries so you're going to have to report it and you're going to have to do something about it. Either something has to change, or you have to change in terms of moving on.
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60. Lisa Thompson - Becoming an impactful board member
11/16/2023
60. Lisa Thompson - Becoming an impactful board member
Lisa Spadafora Thompson the founder and CEO of Sturbridge Growth Partners, a virtual network of consultants, thought leaders, and practitioner specializing in growth strategies, talks about her experience as a consultant and how she has used those skill to become an impactful board member. We love our listeners! Drop us a line or give us guest suggestions . Links: Bio: Articles: Big Ideas/Thoughts/Quotes: Sturbridge Growth Partners Lisa founded Sturbridge Growth Partners to serve companies in various B2B industries with customized, actionable strategies without the high fees of large consulting firms. “Strategic pricing in B2B markets involves understanding the value you create for customers and how to maximize the value capture in the form of price.” Board members should ask leadership more questions about how much economic value they create for customers, whether they’re maximizing the amount they can capture, and whether they’re negotiating with customers in ways that drive competitive advantage.” Monitor Group Lisa served on the board of The Monitor Group, a consulting firm acquired by Deloitte. “Six years after joining The Monitor Group, I was elected to the board of directors by my peers, who were the other partners in the firm. Shortly after winning, one of the most senior partners in the firm said, “You know why you won, right?” I laughed and said, “No, why don’t you tell me.” He said, "Because you have the ability to take on the important and contentious issues, and you need a lot of courage to do that on a board. You have that courage. That's why you got elected. Don't ever forget that.’” What did you learn as a board member during the process through which Deloitte acquired the Monitor Group? “One of the most important things I learned during that process is that we can tend to hyper focus on hard skills. But being on a board, particularly at a contentious period of time, the soft skills win the day - the people who can take on the tough issues in a way that aligns people, that was critically important for us during that time.” Twin Valley Companies Lisa serves on the board of Twin Valley Companies, a 4th generation family-owned managed service provider and telecom products business based in Kansas City. The organization and the family have a very deep-rooted culture and community in the cities and towns that they serve. Lisa, how did you get onto the Twin Valley board? “I applied for the Twin Valley board through an organization called the Private Directors Association (PDA) where I’ve been a member for 3 years.” As a lifelong consultant, I've worked in a variety of different industries. The CEO liked that I had manufacturing experience, hardware, software/SaaS, and other B2B services. They weren’t looking for more telecom expertise – they wanted to learn from other industries.” “One of the things I love most about this board is that we’re committed to operating at the highest levels of governance. We even hired an external firm to help us develop into a high-performing board. Not all private companies will do that, but they should because when companies have excellent governance they grow, and they grow profitably. That benefits all stakeholders.” African Entrepreneurial System Lisa is an advisor to Harambe, “a group of some of the most prominent, amazing entrepreneurs I have ever met from countries all over Africa.” They have started businesses that are geared towards solving some of the biggest problems that the continent faces, like high youth unemployment rates, increasing crop yields (80% of the arable land in the world is in Africa), and getting access to credit. Semicolon I was asked to join the advisory board of Semicolon, which is based in Nigeria, but expanding to serve many countries in Africa. They’re teaching young people to write software code. They’re getting jobs in the US and the UK and other parts of Europe yet continuing to live in their villages in Nigeria. So, they’re making US/UK salaries with a Nigerian cost of living. That’s game-changing for them and their families. DGL Lisa is involved in DGL (Doegode Leiba), a startup focused on enterprise risk management software (SaaS). The board's focus is on fundraising, strategy development, and hands-on involvement. It was founded by a man from Ghana, who now lives in the US. “The founder recognized that a small number of issues drive the majority of risks in most organizations, especially mid-sized and large ones. He’s systemizing the process and developing a SaaS offering around it.” EWOB (Extraordinary Women on Boards) Extraordinary Women on Boards (EWOB) - absolutely one of the best organizations I’ve ever encountered…a high caliber group of women, who have a lot of board experience. That’s been particularly valuable for me because I love learning from others who have even more experience than I do.
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59. What do you do when your board receives a subpoena or the government is investigating your company?
10/22/2023
59. What do you do when your board receives a subpoena or the government is investigating your company?
Ian Roffman advises boards, directors and company executives when there is trouble - a government subpoena, a whistleblower complaint, a letter or a phone call from a government regulator. In this episode we talk about what a board and management should do when this happens - and how they can position themselves in advance for an inquiry by the government. Big Ideas/Thoughts/Quotes: Our guest Ian Roffman helps boards, directors and company executives when they're facing what can be a significant moment in the existence of a company. Those moments can come upon the receipt of a government subpoena, a whistleblower complaint or even something as seemingly innocuous as a letter or a phone call from a government regulator. Ian comes in to help the boards, help individual directors and help executives as they make their way through those sometimes sticky periods. One of the most important things a company or a board can do when there is a government inquiry is to try to get its arms around the issue as soon as possible. There's a balance that boards need to strike between speed and hastiness. You want to act quickly, but not at the expense of good judgment. The desire to ignore or push off bad news can be pretty strong, but directors have a duty to think about the steps that they need to take to reasonably make sure that they're fulfilling their duty to shareholders, employees and all of their relevant constituencies. The SEC has said that there are the four benchmarks they will look at to evaluate whether a company and its board are good corporate citizens: 1. Self-policing (did you have in place good internal controls? Did you have a good risk function? Did you have an internal audit function, etc.?) 2. Self-reporting (was there transparency and speed in the reporting of the issue?) 3. Remediation (whatever the problem was, did you fix it?) 4. Cooperation (when we asked you for documents, did you give them to us? Did you also give us the documents that we didn't know to ask for? The SEC is very clear that cooperation doesn't just mean you did the things you're required to do. It means you did something extra.) Even though other regulators don't use that same nomenclature, the concepts are always the same. Question: When you get there and you see that there has been some, let's call it, avoidance or cover up, what kinds of things do you tell them to do then? Answer. Often it comes from a really good place, which is that people see a problem and they try to fix it. Where it becomes a "cover up" rather than a solution is if there's a lack of transparency. Really, the key, when you identify a problem, is whether you're trying to fix it secretly versus trying to fix it transparently, and the fix might be identical, but a secret fix is a problem and a transparent fix is a solution. Transparency and collaboration within an organization are among the most powerful things that companies can do to put themselves in a position to deal with regulatory inquiries. Directors’ Duty of Oversight. The Marchand decision (2019) is sort of “Caremark duties on steroids.” The case involved the Blue Bell Ice Cream Company, which had a Listeria outbreak in its ice cream. The directors were sued, with a dereliction-of-duty-type theory. The Delaware Supreme Court said that directors have an active duty to oversee the operations of the company, especially when it comes to areas of significant risk within the important areas of the company's operations. In that instance, it was food safety. The director’s duty described in Marchand is much more active than what many boards had expected. Whistleblowers. It's in the company's best interest to take a whistleblower complaint seriously - so listen to what it is, look into it. If there's something to it, deal with it. If there's nothing to it, make clear to the government that there's nothing to it, but do not be dismissive of your duty. Insider trading. Insider trading investigations can be incredibly invasive because when the government is looking to see if someone engaged in insider trading, they know that people communicate on their phones and through WhatsApp, WeChat, Slack, Telegram, Snapchat and all those other apps, and so the government is going to go in and they will take your devices. They will require you to image your devices. They'll get forensic images of your device. It is incredibly invasive, and so what a company ought to do is manage its investigative risk around insider trading.
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58. The groundbreaking, impactful work of The Partnership
10/03/2023
58. The groundbreaking, impactful work of The Partnership
Pratt Wiley is the CEO of the Partnership, a 35 year old organization whose mission is to provide leadership development for professionals and executives of color across every stage of a professional's career life cycle. In this episode we will hear about the incredibly impactful work The Partnership has done, and continues to do, to change the lives of many talented people – and the communities in which we live. We love our listeners! Drop us a line or give us guest suggestions . Big Ideas/Thoughts/Quotes The Partnership provides leadership development for professionals and executives of color across every stage of a professional's career life cycle. We work with companies and organizations to help craft and influence corporate culture, which is what we believe is truly the most important competitive advantage that an organization can have. We focus on what we call community - - being very intentional creating relationships of peers and mentors and sponsors and advocates, who are important for both professional advancement as well as personal fulfillment. BoardLink BoardLink started with nonprofits knocking on our door asking us if we had any board candidates that we could share with them. They were looking to diversify their board, but they weren't sufficiently connected to networks to be able to identify and recruit diverse talent themselves, and so that's what BoardLink is. It is taking these networks of incredibly talented and accomplished executives of color and connecting them with organizations, nonprofits and for-profits that are looking for great board candidates and especially those who are people of color. Impact The Partnership was formed in 1987, since then 35 years of programs and 6,500 alumni who have gone through those programs, and you'd be hard pressed to find a prominent leader of color in Massachusetts - in a lot of corporate spaces - who aren't either a graduate of our program or one of the folks who helped create it in the first place. There are a number of ways that we measure impact. The easiest to measure - probably one end of the spectrum - is retention and advancement. We don't want to look at these programs as golden handcuffs, and so our folks advancing professionally is another piece of data that we look at, and we have similar numbers there. Our alumni are CEOs and Chief Justices. They're entrepreneurs. They're leading Fortune 100 companies. They are leaders in healthcare and consumer products and financial services To an extent the real value of an organization like The Partnership, that thing that we can provide that no one else provides, is this safe space that can serve as a safety net for so many of our participants that both catches you when you fall, but even more so encourages you to take greater risks knowing that there is that support system behind you. Family Impact My mother took over The Partnership after it had been in existence for about three or four years. There had not been a proof of concept in terms of, is this an economically viable organization. It was on the verge of bankruptcy. It was a moment not too dissimilar from this one where you had corporate leaders who were saying, "You know, we've tried this for a couple of years, and now it's time for us to move on to something else." My sister and I still remember that it might not have been her first day, but it was one of her first days. She picked us up from school and then we went back to the office, and I started unpacking boxes and putting files away in the cabinet and I joked that The Partnership really was built on child labor for a number of years. When I moved back to Boston I had this weird existence where not a week would go by where someone wouldn't stop me on the street and say, "I went through The Partnership when your mom was running it, and it changed my life." or "I was at this crossroads in my career and your mom had coffee with me and she helped me see the direction that I should take." or "I had gone through a major setback and your mom, or my dad as well, they were the ones who picked up the phone and called so-and-so and said, 'Hey, I've got a great candidate for you.'" Impact of the Pandemic Prior to the pandemic, the first 30-plus years of our existence, our programs were always in a physical location. By the time I took over, we would be hosted by many of our client companies. Starting in 2020, we could no longer do that, and so everything moved onto Zoom - - and I had never heard of Zoom before. I sent an email to my board letting them know that we were going to be working remotely for the next couple of weeks as the pandemic sort of runs its course. One of my board members is Tsedal Neeley, a professor at Harvard Business School, and one of her areas of expertise is remote work. She called me up and she's like, "Look, I am getting phone calls around the clock from executives who are trying to figure out how to do remote work. I've got two minutes for you," and her advice was, "Meet people where they are. Dogs are going to bark, doorbells are going to ring, kids are going to scream at the worst time, just meet people where they are. Find a space where you can focus and where you can turn on and turn off, and then lastly, that the further we are, the closer we need to be. We really do need to focus on people." Pushback on DEI In the private sector, we are seeing challenges to ESG plans in general and ESG investing in particular. There's a concerted effort - within The Partnership we call it the new DEI of divide and exclude and isolate.
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57. What questions boards should be asking about AI
09/16/2023
57. What questions boards should be asking about AI
Ham is an active long-time member of the Boston entrepreneurial community, a seasoned board members, a prolific author on the subject of boards/governance and the founder of the Launchpad Venture Group, one of the driving forces behind organized angel investing in the United States. In this episode Ham, we discuss many areas of board practice with someone that for many years has helped and written about how to make boards better. We love our listeners! Drop us a line or give us guest suggestions . Big Ideas/Thoughts/Quotes: Board questions around AI: What are the strategic objectives of the company, what are the business problems and the opportunities that that company should be going after. Three questions to begin: 1. What specific business problems or opportunities do you plan to address with AI? And how do you anticipate that AI is going to help the company achieve its strategic objectives? It's all great to have tools like AI, but if they're not fundamentally driving the business in a direction that helps you achieve those strategic objectives, why bother? 2. How will you manage the ethical and legal implications of using AI, such as bias, discrimination, and compliance with regulations and industry standards? AI tools where they haven't been trained on a wide enough data sets, they haven't had enough experience, nor have the users of it have enough experience to understand whether they're going down a path that might lead to issues down the road. 3. How will you communicate the use of AI to your stakeholders, and that includes employees, customers, investors, and regulators. And how will you address the concerns about the use of AI? “There's not time for this in every board meeting, but a board should have at least one or two strategic sessions a year that are focused on technology.” “When you think about a financial institution, a healthcare institution, they have a lot of data that is extremely sensitive; personal data, healthcare data, financial data. You don't want that escaping out into the world by using one of these tools that you don't necessarily know what it's going to do with that data.” One of the biggest concerns is that sort of bias and discrimination that can occur with AI tools where they haven't been trained on a wide enough data sets, they haven't had enough experience, nor have the users of it have enough experience to understand whether they're going down a path that might lead to issues down the road. even if you don't get the full effect, it's important to get it right so that as you go forward, you've identified any issues that might exist, whether it's bias, discrimination, or something else before it's everywhere, which will make it more difficult to control at that point. Whether you need to explain that AI is, for example, reading your medical scan, your MRI or your CT, or whether you need to explain to your customers that an AI is either giving you a thumbs up or a thumbs down on we're giving you a mortgage or whatever. I think that's going to be a more challenging question about how you communicate that- I don't think there's necessarily a good answer for that today I do want to say one thing about all three of these questions that I've asked, they are questions that you should be asking of the chief technology people in the organization, not just the CTO because the CTO may or may not be the one who is most expert in these particular areas Raza, what do you think about having an AI board member? I think a copilot, an assistive technology, is definitely a very interesting thing for boards. It can make them more effective. It is possible that you have a large set of materials and going through those, you do miss things as a human, but an automated process and AI could definitely come up with more. This is a really great idea for a startup, and I think somebody will do it. Note: All of the board questions generated by ChatGPT about AI are listed below Board of Cambridge Trust I was brought onto the board specifically to address one of the new strategic areas that Cambridge Trust wanted to go in. Massachusetts has a very high concentration of companies in sort of the innovation economy, startup tech, and life science companies. It was seen by corporate management at Cambridge Trust that this would be a good area for growth within the bank. Most tech startups are losing money and most banks don't like to loan money to organizations that are losing money, so I had to explain what kinds of companies that, even though they might be losing money, would have good solid financials that would make it so that they could be the type of institution that you would give a loan to. Lead Director In our case, the lead director has several key roles. One, the lead director speaks to the CEO at least on a weekly basis. It's sort of a sounding board for the CEO to update on what's going on that may need the board to hear more detail about. I also work closely with the CEO to determine what the agenda for the next board meeting is going to be. During board meetings, the lead director leads executive sessions, whether those executive sessions include CEO or whether they're just the independent directors. Term Limits “Up until last year, we had age-type of term limit and that was the age of 72. That was the mandatory retirement age. There are two shareholder services out there, ISS, Institutional Shareholder Services and Glass Lewis, and both of them are not proponents of age-based term limits so we've removed our age-based term limits.” Woods Hole Oceanographic Institution For those who don't know anything about Woods Hole Oceanographic Institution…it is the pre-eminent oceanographic research institute in the world. It's based in Woods Hole, Massachusetts and I spend a lot of time down here in the summer. I was brought on to help the institute with issues around technology transfer, so research institute, lots of great scientists and engineers, sometimes they come up with ideas and products that could potentially be commercialized, so the goal was to figure out what's the best way to do that. Model Startup Board There are three key attributes that I look at for building sort of a model board. First of all, diversity, and we've talked about that a little bit already, but great boards are comprised of individuals with diverse talents, background, instincts, and expertise. Next, you need relevance. Diverse backgrounds and experience are only useful to the company if they're relevant to where the company is going, not where the company was, where it's going. And then aligned, great boards are focused on a common long-term goal, and they ensure that senior management buys into that future.
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56. Meghan Juday - There is no business like a family business!
06/02/2023
56. Meghan Juday - There is no business like a family business!
Meghan Juday is a fourth-generation leader and Chairman of the Board of Ideal Industries, a 100+ year old family business. In this episode Meghan talks about her journey to become the first woman leader in the family business, and some of the lessons about family and governance she learned along the way. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Links: Big Ideas/Thoughts/Quotes: How I started in the family business “I got a phone call from my dad, I had a three-week-old at the time, and he called me and said, "Now that you don't have anything to do, can you just come work on this project?" But you know what's crazy? It's like people talk about how challenging parenting was and I was like all kind of ready to go, and that three-week-old sleeps all the time. I was poised and ready for the big onslaught. I was thinking, what’s the big fuss is about, this is fine, and so I said yes to this opportunity. Honestly, had he called me with a six-month-old, I would've been like talk to me in three years.” Family Governance When I joined the board, I became intrigued with the interplay between family governance and corporate governance. In talking with other families, a lot of times family businesses will have a very strong corporate board and they'll put a lot of time and investment into it, but they kind of starve the family as something that's not important. I n my mind, family governance has to be equally invested in and taken just as seriously. “My rule of thumb is family businesses should expect to spend and invest as much on their family, their family engagement, risk mitigation, and family education as they do on their corporate board.” Family Governance: “The structure necessary to keep a disorderly system (the family) ordered.” I think that the family, like any system, really wants to descend into chaos. A lot of decision makers, a lot of influences, everybody wants the key roles, everybody wants to be able to tell the CEO what to do. I mean, I'm saying this hyperbolically, but it's really important that family governance is intentional. “One of the conversations that we have in our Family Council every year is what is going to change in the next 10 years whether or not we have a plan. We look at several different systems, we look at the families. We have all those cute 8-year-olds, in 10 years they're going to be 18 – we better have a plan. We had better have talked to them about the company. They better have been exposed to the family between now and then.” “Family Assembly” is really just the term we use for the entire family. We do quarterly calls with our CEO to talk about business updates, have a quarterly call with our CFO to do financial overview and do education and training around just being comfortable with understanding some of these financial dynamics. And then we have an expert series as well where we bring in subject matter experts on various topics that may have some relevance. We changed our compensation committee to also embrace culture because we want to make sure that the compensation is driving the culture we intend as well as the business results. I really think the board needs to be kind of forward leaning or future leaning and have the skillset sets and expertise of where the company wants to go directionally, strategically. Changing the paradigm What's so interesting about the previous generations being so thoughtful and thinking with such a stewardship mindset, is that they saw our family basically had two branches, and depending on who died first, voting control would flip flop between the branches. But they really just wanted to work together. If you harmonize the elections, then you don't have these big swings, and so they decided unanimously to put all of their voting shares into this Voting Trust. They still get the financial benefit of that, but the voting control goes to the trustees and the people who own voting shares, they can remove a voting trustee at the drop of a hat as well. There's like a lot of moving parts in making sure that the voting trust is working on behalf of the full interest of the family. It took time for the family to adjust to the fact they have a voice, they have a say, they have insights to share, that it wasn't all just top down. That really did take time, but I think we are seeing some very positive results We noticed in my generation that we had some dysfunctional communication dynamics, that were really making it hard for us. We had all this amazing governance, but it was really making it hard for us to make proactive steps forward, and so a bunch of the fourth generation, I was super proud of them, decided that they did not want those kind of dysfunctional dynamics to be continued and passed down to their children as it was to us. We hired a licensed therapist who specializes in family business dynamics, and we did therapy as a group every two weeks for two years and we did a lot of like one-on-one therapy as well with the therapist, and it was so unpleasant…it was super challenging and very stressful. However, we've made progress. During that therapy process, it really brought the rest of that fourth generation along and said like, "Here, we've done a lot of really strong and powerful things and we've now seen all the opportunities given to those family members who feel disgruntled, and we are convinced now that they have been treated correctly and that they're not taking their ownership and their part of the issues." Having done that work, it totally shifted the dynamics, so now nobody's falling for it anymore. They used to fall for it all the time, 'Oh, you're such a victim. We feel so sorry for you," and now it's like, "You've had your opportunities, you have your resources, go fix your problem," and so it's calmed down significantly. Transformation of the Board of Directors The goal was to make changes with the board, but I was getting a lot of pushback with some of the directors. They were coming to board meetings not prepared to engage straight into conversations. They were expected to be presented to, et cetera, et cetera. There was some undermining also going on [in the boardroom]. I had a director who offered to be chairman instead of me, and I could just stay on as vice chairman, and I was like, "Oh, my gosh, that's so nice." He's like, "Well, I'll mentor you." And I was like, "That is so nice, but how about this? I’ll still be chairman and you still mentor me." And he was like, "Oh, God, that's not going to work." When I moved the first two board members off, they had been on our board for a really long time - and by the way, all these people are wonderful people - but one of them had been on our board for over 20 years. That person is not independent anymore, even if they're trying to be, you know? Board composition drives board culture.
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55. Alissa Hsu Lynch on Digital Transformation advice for Boards
04/16/2023
55. Alissa Hsu Lynch on Digital Transformation advice for Boards
Alissa Hsu Lynch serves on the board of Pulmonx (NASDAQ: LUNG) which a medical device company and she comes from a diverse career with leadership roles and Johnson & Johnson and Google Cloud. In this episode we discuss digital transformation in healthcare, board’s role and advice for boards. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Big Ideas/Thoughts/Quotes: Effective onboarding at Pulmonx Board Pulmonx is a medical device company, small cap company, that offers a valve, so a medical device for severe emphysema, so for people who are suffering from lung, and it helps them to breathe more easily. It's a minimally invasive procedure. They have breakthrough FDA status and so it's really just wonderful to work with a company that is looking to improve and even save people's lives. RS: onboarding was intensive, both in terms of training you as a board member, but also learning about the company and meeting people there. AHL: I think a lot of boards in their onboarding process do the typical meet all the senior executives, the management team, get to know the business, and I certainly did that and that was super helpful to be able to speak with all the key leaders of the organization. But what they also did that I specially appreciated is they partnered with a consultant from NACD, the National Association of Corporate Directors, a very experienced board um, director and consultant who worked with myself and the other new director over a period of about six months to really go deep on all aspects of board governance. Every month we would meet for a couple of hours and just focus on one committee, so one meeting would just be on the nominating and governance committee and we would go over what is the roles and responsibilities? What are the risks, what are the questions you should ask? And also what I thought was really great is that she would pull up the nominating and governance charter from Pulmonx, and we would go through the company's charter and she would be able to provide perspective on, "Well, this charter is covering these aspects, but some other companies, maybe once you join a larger cap board, they may also have these other aspects." It was really helpful to be able to meet one-on-one with her and just be able to ask stupid questions as a new director and just get that confidence that, "Okay, I'm walking into this with a really great background on governance." Areas of Digital Transformation for Companies There are four areas that I've seen many organizations think about when they talk about digital transformation. The first where many healthcare organizations, in particular, are starting is around operational efficiency. Operational efficiency is a common one where many organizations start. The second one is around improving customer experience. The third is helping them accelerate innovation. The fourth is on consumer engagement. Advice for Boards on Digital Transformation Earlier I talked about this concept of crossing the digital divide and how difficult that is to go from your legacy business to a new technology-enabled business. Tangibly I wanted to provide three tips. One is help management identify where they should go, and I'll talk about that in a moment. Second is, help them think about how to get started, so going back to the problems to solve, and the third is, what is needed to build a sustainable business model, so where this should go, how to get started, and what's needed to build a sustainable business model on that next s-curve. 10X Thinking for Boards AHL: One of the things I learned at Google is around 10X thinking. This is the idea of really solving big problems by coming up with radical solutions, going for a 10 times improvement instead of just a 10% improvement. That type of thinking, that type of expansive thinking is something that the board should encourage their companies to do as you're working through your strategic planning process. The company may come back to you and say, "Hey, here's our 3-, 5-, 7-year strategic plan, and it gets us from here to there," and I think it's really important. On the board I'm on, we have done that and said, "Well, what if you thought bigger? What would need to be true for you to reach that attainable goal? We're not telling you that that's the plan and you have to sign up for that plan or that even that you're not going to communicate that to the street. But internally as a board, let's think big. Let's think 10X and agree that there are big opportunities out there that we could go out there to solve." JA: Great board question.
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54. Michael Peregrine on fiduciary duty and the impact SVB may have on the boardroom
04/05/2023
54. Michael Peregrine on fiduciary duty and the impact SVB may have on the boardroom
Michael Peregrine advises boards of directors on matters of sensitivity and controversy, often in connection with corporate and fiduciary crises. In this episode we discuss examples of such including Silicon Valley Bank and the board’s role, board diversity, the danger of deference to strong CEOs and the challenges that AI raises for boards. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Big Ideas/Thoughts/Quotes: The reason I refer to matters I work on as sensitive is because they sometimes bridge the gap from pure legal issues to moral and ethical issues for which there's a gray area, and they often require a substantial amount of courage for the full board to address them and they are perhaps the most explosive in the sense that they typically involve people of goodwill and faith, As an example, sometimes a very successful CEO is just unable to make the shift to what I would call the modern board management dynamic with respect to engaging boards, or particularly in supporting corporate compliance…it's a situation where a CEO is just reluctant to acknowledge the full scope of the board's duties and responsibilities, just doesn't get it, and therefore is in direct conflict with the obligations of the board to engage in fiduciary responsible activity. Silicon Valley Bank When you have any kind of collapse in the banking industry, in the financial industry, where consumers are hurt directly, you're going to have everybody piling on. “I think the Silicon Valley Bank situation is going to continue to be in the forefront for all kinds of directors because it deals with the failure of a heavily regulated industry with sophisticated issues involved, but very basic concerns about how people did their jobs.” “I think there is a risk that it will cause board members to over-engage if they feel that they're in situations where management has not done enough to inform them or advise them or keep them in the loop.” That, of course, leads to micromanagement, which is not good for the company as a whole. I kind of see it, and I see a pullback by the board in terms of reliance on management and taking more on at the board level. And while that's understandable, I don't think that's good in the long term. JA: It seems like had both management and board been doing what we all think of as their job here, this would not have happened. It's probably not necessary to clamp down and scrutinize more closely. The question is, why didn't they scrutinize at all? Why didn't they have a chief risk officer? Why didn't they do a lot of things to maybe hold this very, very aggressive and active CEO more accountable for what he was doing? MP: I think there's a great likelihood that the Fed will control the dialogue…”We gave them all the information they had. We can't hold their hand." And the question was, "What did you do with the information?" I think it will focus on the extent of information that the board and management knew or should have known from the Fed's review. “If I'm a chief risk officer of an organization, I'm going to assume that my compensation will increase dramatically.” I think another question could be, "Well, did the board actually have the competency necessary to do the analysis? Was there a situation where they lack subject matter experts?" JA: It's not just a lack of a chief risk officer in just any sector or organization. It's a chief risk officer in one of the most highly regulated industries in the world, so not having one under those circumstances - that's something on which people will focus and I think that’s appropriate. Criticism of SBV Board Diversity JA: You said the criticism may be unfair, and I'm going to just say it's way more than unfair, it's completely, in my view, misplaced. Two things: one, diversity of perspective does mean you're a better board, but it doesn't necessarily mean you're going to be a better board unless the underlying skills and experiences of those members are the right ones. That's always been true, so whether you have a diverse gender, racial, ethnic, geographic, age - whatever that diversity is - that is probably a good thing, but it only matters if the underlying group of skills together is what is needed for this company. Impact of the pandemic on the boardroom Generally speaking, over the last couple of years, I've seen the pandemic issue affecting industries in two ways. One is that I think for a period of three years boards have been reluctant to lean in on management because they felt in 2021, and to a certain extent in 2022, "You guys have your hands full. We're going to lean off. We're going to let you run it. We're not going to beat on you. We're going to ease back on the throttle and let you get the ship back in the right course." Now, Boards are seeking to reclaim their lost authority, and CEOs are not so willing to give it up. I think that is an aspect of the pandemic which is important to consider and important for boards to confront that issue with management. Deference to the “Messianic CEO” MP: SVB also raises the question of the obligation of the board when you have the Messianic CEO, there can be so much belief in that person that there's excessive reliance or excessive deference to that CEO when the board feels that that person has the magic beans to do the job. JA: Michael, that's a cult, that's not a board. If you want to join a cult, good luck. But if you want to be on a board being mesmerized by the CEO is not an excuse. It's never excuse. If you're going to do that, get off the board and go join a cult. AI I think that the gap between a board’s awareness and their ability to do their job in terms of oversight of organizational commitment to AI and , ultimately. risk is huge. I were in a board of an organization in an industry where there were tremendous AI advancements, I would be concerned. In my view, it's really the Wild West if you're a board member trying to manage the organization's use of AI.
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53. Steve Gullans on Biotech Boards
03/15/2023
53. Steve Gullans on Biotech Boards
In this episode Steve Gullans talks about the board’s role for life biotech startups and IPOs, Scientific Advisory Boards, how therapeutic drug companies are different and orphan drugs – and everything life science. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Links: Big Ideas/Thoughts/Quotes: Background - Steve's network and expertise extend from academia to Wall Street. He has managed teams through successful financings, scale up of operations, clinical trials, deal negotiations, IPOs and M&As. He has also served as board director for more than a dozen companies, currently including Orionis Biosciences, Alexis Bio, iSpecimen, and Navigation Sciences. Steve began his career as a professor at Harvard Medical School, has co-authored over 130 scientific papers and is a fellow of the American Academy of Arts and Sciences as well as the American Heart Association. Steve has also as CEO of a public biotech company and co-founder and Managing Director of Excel Ventures, a life sciences venture capital firm and he is currently the CEO of Metis Minds, a digital wellness company addressing ADHD. On Scientific Advisory Boards - “Scientific advisory boards generally, as the name implies, involve scientists giving advice to a company, or it could be to an institution ... helping them with their innovations or with a large number of companies as they try to figure out how to maneuver their way through the technical challenges of the scientific process.” BioNtech had no plans to go into vaccines, but if you have the right community of people, you can actually pivot when you need to. But on top of that, it's really about giving sage advice and critical advice that often the board cannot provide. “Joe: One scientific advisory board that I'm very familiar with is the one that we have on St. Jude Children's Research Hospital … For some of the deep dives, they'll bring in outsiders, not members of the ongoing SAB, for very specific expertise, but I think it's fair to say that for the board, that three, four, five hours that we spend with them each year is some of the best time that we have all year.” Metis Minds – “I just decided to come out of retirement because I've been focusing the last few years in learning about the digital technologies that will allow us to retrain the human mind. “Metis Minds is was developed by a team in Boston in collaboration with others around the world. It's simply an EEG device that sits on the forehead of a child or it could be an adult, and it controls through Bluetooth a video game on an iPad or other pad. It looks identical to the games that my grandkids play today, like Subway Surfer. It's an adventure avatar game, and the speed at which the game operates is determined by how much you focus and concentrate. Eight human trials have shown it actually works.” Therapeutic Drug Companies – “an early stage biotech therapeutic drug company, it really needs a lot of capital. The path is well worn, and at the same time there is capital available, but you have to check certain boxes in order to access it.” “In general, you have a preclinical development period. It could be in academia, it could be in a private company, or you use the best available animal model to show the compound you have, whether it's a biologic, a small molecule, a peptide, it could be a natural product, it could be anything that shows benefits and safety in small animals.” “A fundamental difference in terms of operating therapeutic drug companies is you never have revenue.” “There are two hallmarks. If it gets a 90% failure rate, why would anybody invest? The answer is because you don't actually have to ever have a sale. By the time you finish phase two clinical trials, the pharma companies line up because they prefer to run the phase three trial themselves and they buy that company.” On Theranos – “I am one of many scientists who looked at the Theranos' slide deck during its multiple financings. My partners say, "Why can't we invest at this round, Steve? Because look, the valuation is now 3 billion, it used to be only 1 billion.” The answer was because people who knew the science knew that it defied the laws of both chemistry and physics at the same time they didn't use a drop of blood to find a bacterium. If there was only one bacterial cell per 10 milliliters, you're going to miss it. That's a very simple concept.” On Diversity of Perspective on a Board – “What you often need to do is you need to reach outside your network because there is such a demand for highly talented people that the shortlist of obvious people already have appointments at Pfizer and the big companies.” “One of our life science companies had somebody from Wayfair on the board, , but her understanding of IT technology and how you actually create marketplaces online was instrumental in pointing the company to the right partnerships, the right people, and all sorts of things. Arkayli and Orphan Drugs – “Hemangiomas, is the red tumor-like spot on a new infant, just born; it happens to tens of thousands of kids. Often they disappear on their own, but the founder identified a way to treat it with a cream, but she didn't have the wherewithal or the understanding how to do it, and at a conference, she met some people who were experts in drug formulation and making creams with absorbable medications. It's an approved drug.” You and Your Urine – “When I was at Harvard Med, there was a course called You and Your Urine, where the students had to come to class and had to pee into a vial …You got to have a little fun while educating. I guarantee the students remember that lecture.” Board’s Role for Biotech IPO – “Yeah, there are several roles for boards. In many cases you'll have a board member who's from a crossover fund like RA Capital or ComREIT or Deerfield, and I did a couple of crossover deals myself, where you invest right before they go public. You jump on the board and then you help with the S-1 and the filings and everything else. If you're a crossover investor, they know all the public investors and they sort of are on the bellwether of whether it's a good deal, so ideally a board member helps recruit a crossover investor to be an investor in the round before the IPO.” “It's about this is going to be a blockbuster because it's a once a month injectable, not twice a week. That is bullet point number one, gang. I know you have love all your science, but it's these kinds of understandings that really trigger the public. Both retail and institutional investors want to do it.”
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52. Maria Doughty on Empowering Women to lead and The Chicago Network
03/01/2023
52. Maria Doughty on Empowering Women to lead and The Chicago Network
Maria is the President and CEO of The Chicago Network, a group of women business leaders in the Chicago area whose purpose is to empower women to lead. In this episode we talk about The Chicago Network, its history, their work on getting more women on boards and important aspects of board diversity Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Links: Chicago Network Big Ideas/Thoughts/Quotes: Maria’s Background – “My parents, who are two of the smartest people I know, have very little formal education. For them it was all about opportunity, and education for them was the door that open those opportunities, so they really made it their mission and purpose to provide my sister and I as much opportunity on the educational front as we could have.” Becoming President & CEO of The Chicago Network – “I met with the search committee on numerous occasions. The more I learned about the organization, I just felt like this was the place for me to be. It was definitely a switch because I went from being a corporate lawyer and a strategist and an advocate and all these pieces to actually shifting into the nonprofit sector, but I knew it was exactly where I should be because this role in particular allows me to help amplify the voices of our members to really live into our purpose and to our mission.” Broader Impact of TCN – “Our women [members] lead global organizations, the question is how are they using their power and influence within their organization as well as amplifying the platforms that they are on. How are they using their power and influence to be able to really change the numbers in the gender equity space.” Increasing Women on Boards - We've always had a focus on increasing the number of women on boards, but we've really amplified it over the last three years. About 30% of our members are serving on for-profit boards. One of the requirements of our organization is you must be civically engaged, so every one of our members at some point has served on a nonprofit board or is currently serving on a nonprofit board. That board service is really part of our DNA. Growing the Next Level of Leaders - One of the things that we talk about a lot is, , it's really important if you want to be a CEO to own a P&L and most women aren't told that they need to pivot into a P&L role. It's one thing that we feel very strongly about - that women in particular need to be told and recognize and given support to pivot into that space to take on some of these bigger roles. Non-profit Board Service Leading to For-Profit Boards - Nonprofit board service is a wonderful way to prepare people for for-profit board service. If you pick a nonprofit board, I encourage people to pick one that has a very strong governance. They have a nom/gov committee, they have a finance and audit committee, a board development committee.
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51. Melissa Sampson McMorrow on the Governance of Impact Philanthropy
02/15/2023
51. Melissa Sampson McMorrow on the Governance of Impact Philanthropy
Melissa Sampson McMorrow chairs the Tax Department at the law firm of Nutter McClennen & Fish and co-chairs Nutter’s Nonprofit and Social Impact Practice Group. In this episode we talk about models of governance structures for Impact Philanthropy Enterprises - ranging from Newman’s Own to Patagonia. We also discuss Massachusetts guidelines for diversity, equity, and inclusion on the boards of Massachusetts charities. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Links: Big Ideas/Thoughts/Quotes: About Nutter - Nutter McClennen & Fish is a Boston-based law firm that was founded over 150 years ago by Supreme Court Justice Louis Brandeis. The firm carries on his legacy today by providing high-quality legal counsel to industry-leading companies, entrepreneurs, institutions, foundations, and families across the country. Changing landscape of Impact Philanthropy - As the world has become more complicated and as the profile of donors has evolved, you see more engagement from donors, and you see donors drawing on different tools and approaches to accomplish their charitable objectives. Donors want to give more than money - .. What you're really seeing is donors, many of whom are successful entrepreneurs, really wanting to use those skills and know-how and apply it in world of philanthropy where they can really make an impact, not just giving money, but with aligning with their goals. Newman’s Own Model - Newman's Own was Paul Newman's company and anyone who walked down the salad dressing aisle of a grocery store knows that Paul Newman gave some percentage of the profits that his for-profit company made to charity every year. Fast forward to his death, how does he keep this going after he's gone? Well, what he did was he, bin very simple terms, gave his company to his charitable foundation... A wise mentor of mine once said to me, if you don't like the law, change it, and that's what they did. They lobbied Congress and they changed the law, and so they were able to end up with a structure that is available to everyone, not just Newman's Own, that would allow a foundation to continue to operate a for-profit business. How the Patagonia Model is Different – There are a few aspects that distinguish what at first blush might seem like a similar arrangement to the Newman's Own arrangement, with few key distinctions. The first distinction of the Patagonia example is that the family is able to maintain control of the business. They don't own it or have an economic ownership interest in it, but there is a control element that is not present in the Newman's Own situation. Massachusetts Guidelines on Diversity, Equity, and Inclusion for Non-Profits -Massachusetts has had a guidebook for nonprofit organizations, particularly charitable organizations, for a long time. It was most recently updated in 2022, and I think it's really interesting where they chose to put the focus in their updates. Really, it's on first, education, second paying attention to the financial workings of the organization and then third -and arguably most important -, paying attention to how you build your board and how that board carries out its duty in executing the organization's mission. Louis Brandeis on Progress - If you'll permit me a quote by the founder of our firm, Louis Brandeis, our DEI strategic plan is guided by a quote of his as follows, "In differentiation, not in uniformity, lies the path of progress," and I think that rings true today as well.
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50. Maria Moats on the important issues facing boards in 2023
02/03/2023
50. Maria Moats on the important issues facing boards in 2023
Maria Castañón Moats is the leader of PricewaterhouseCoopers' Governance Insights Center and previously served as PwC’s Chief Diversity officer. In this episode we speak with her about PwC’s 2022 Annual Corporate Directors Survey, which included the views of over 700 public company directors, about the important issues facing boards and how directors view them. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Links: Big Ideas/Thoughts/Quotes: PwC Corporate Directors Exchange The PwC Corporate Directors Exchange is a gathering of directors on public company boards, primarily Fortune 1000 and above, that PwC hosts every year in January. Our theme this year was “Acting today for a better tomorrow” - it’s about bringing leadership into the boardroom. We touched on the geopolitical environment, shareholder engagement and activism, what's happening in Washington, how we behave with one another and why. We addressed trust, climate and then cyber. For two days onsite with a hundred plus directors in person and another 120+ on live stream, it was terrific. PwCs 2022 Annual Corporate Directors Survey, Issue #1: The Trust Gap. While 87% of business executives believe consumers highly trust their company, only 30% of consumers actually do. "This lands at the feet of the board of directors as stewards of the company.” In order to maintain trust, there needs to be a level of transparency with all stakeholders so that they better understand the company. When I talk about transparency and disclosure, that's separate from what a regulator would require. It's not a compliance element, it's what does the company stand for? How does the company want to be transparent and communicate with its stakeholders? Being transparent about its strategy, its risk, its processes, is a great start, but 71% of directors told us that it starts with engaging, talking, communicating with shareholders. It's not enough to have it written. Issue #2: Pushback on ESG: Only 45% of directors believe ESG has an impact on long-term performance That 45% really concerned me because it was slightly higher last year, that whole why ESG and how does that really impact the bottom line, right? Performance profits, I'll call it instead of performance. What I think is happening is there is a bit of ESG fatigue in terms of the conversation amongst directors and companies. “The question companies and directors need to ask is: if we don't want to call it “ESG”, How is the company really going to differentiate? That differentiation, trying to get more market share, growing revenues - how do you think about that relative to strategies around the environment, climate and social in your people?” You have to make sure that you're engaging so you could educate them on how you're going to bring forth that long-term value that will come through the elements of ESG, how long that will take, and what that impact, if any, will be on the short term. Issue #3: 31% believe that sitting CEOs should not serve on boards outside their own company. I think the concern is valid because you don't want your CEO to be distracted. But on the other hand, I am fully supportive of having that CEO be on a board. The CEO often sets the agenda for board meetings with the lead director, et cetera, so if they sit on an outside board, then they're probably better at thinking: what should our agendas look like? How often should we discuss different elements of the strategy? “One of the most important things that boards do is make sure that they have the right CEO in succession planning. If a CEO that sits on an outside board, they probably know how that outside board thinks about CEO succession planning.” Issue #4: Forty-eight percent of directors want to see a fellow board director replaced. However, 62% say that boards won't enforce any policies that would lead to that result. Yes, so that 48% has been showing up in probably the last five surveys. In addition to the 48% of board members that say somebody around this room doesn't belong, 19% tell us that they would replace two or more people—but then they're less willing to enforce policies. And by that, they're probably thinking term limits, age limits, which are not that prevalent. “There needs to be robust individual board member assessments, and a plan to rotate members through committees. There needs to be a plan to rotate chairs on committees, and there needs to be a plan for constantly thinking about a pipeline of potential board members that can come on over the next three or five years.” What skills does the board need? What experiences does it need? Is that what you currently have? And if not, how do you get there? You're not making it about individual board members, you're making it about the collective group of people that comprise this board, what are the skills that they need and how does that tie into where the company is going and the strategy and so on and so forth. “I think third parties are tremendously helpful because boards, form consensus, are collegial and the like. It's always helpful to bring a third person in to tell you what you could be doing better, what they're seeing other boards do, I think it would be helpful.” Let me give you a few more stats. We have a section around board diversity and how are you making changes in your board? First of all, 36% of the directors in the survey told us that they've just increased the size of the board, so they added a board seat to bring in a diverse board member, that's good. Sixty-seven percent said that they basically replaced a retiring director with a diverse director, a person of color, a woman that's probably they were thinking of as well. But 69% are now disclosing in their own proxy full diversity skillsets and the like of their board members. “Since identifying and managing risk is so critical to a board—maybe more critical now than ever because it's become so more complex—the idea of a diverse and ‘more fit for the purpose‘ board is even more compelling. Because, if nothing else, you certainly want a board that is able to work with management to identify risk and to understand how much risk they should be taking or not taking. If you're not doing that, the board may not be doing its job because that is such a fundamentally important responsibility that boards have.”
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49. Jennifer Buras: Preparing for your first board seat
12/17/2022
49. Jennifer Buras: Preparing for your first board seat
Jennifer Buras advises clients, primarily senior executives, on career development, including in many instances their first board seat. In this episode she discusses how to prepare your first board seat – and succeed. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Quotes Preparing a client for a first Board Seat "What is your personal brand? What is your board brand? How can you articulate that and infuse that in your board bio, your board resume, the way you present your value proposition. We conduct mock interviews. We coach our clients who are actively pursuing board seats and are in live interview situations. We'll record those interviews. A board interview is very different than a corporate interview, so we want to make sure that they're prepared for that sort of questioning. Board Bio By presenting a board bio you're demonstrating your board savvy. A board bio is intended to be a one-page narrative where the reader can quickly ascertain what is your board brand and what is your value proposition. What is it that's unique about you and your experience that's going to be accretive to the boardroom. The role of a board member People need to be reminded that it's not about “telling” in the boardroom, it's really about listening and being able to ask the right questions in order to further a conversation and get to a better decision. Networking I think it's important for prospective board members or those seeking board seats to start with their own network. Who do you know within your network who is a board director? Who do you know who's an influencer; accountants, lawyers, venture capitalists and really catalog that list and tier them. You're trying to get into that second and third degree of separation from yourself in order to find opportunities. Big Ideas/Thoughts We had a client at Essex years ago, who came from a very large, well known money management firm in Boston and he was offended that nobody had asked him yet to join a board and nobody asked. When I asked: "Have you told anyone you want to join a board?” he said, “no.” You have to let people, your network and beyond, to know you’re interested. Pretty basic, but sometimes overlooked. First For Profit Board Seat I joined that board as a result of my work on the North Shore Y Board. At that time I was the treasurer of the organization. I chaired the finance committee and the CEO of Beverly Bank, the predecessor bank, was an ad hoc member of that board so he was able to see me in action in a different context than he might have seen me had he just known me in my day job. Having worked with him, when a board seat opened up on his board, he asked me if I'd like to be considered When you sit on a not for profit board you have an opportunity for people to see you in action in a different way than they may see you in your day job, they see you in the boardroom, and also you're often with board influencers, people who are either on corporate boards themselves, CEOs, people in the community who are willing to advance and endorse you. Time Commitment as a board member The NACD published a survey in the last year or so which indicated that the average director spends 248 hours a year, which translates into five hours a week on their board role, and as you know it’s not necessarily an evenly spread five hours a week. Boston Club The Boston Club is a woman's leadership organization based in Boston dedicated to advancing women not only in the boardroom, but into leadership roles.
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48. Bridget Ross: CEO and board member for the first time, at the same time
12/03/2022
48. Bridget Ross: CEO and board member for the first time, at the same time
In this episode, Bridget Ross talks about her career in life sciences and her most recent roles: CEO of a medical device startup, and independent board member of a medical device company; the difference between her private and public company board experience; and the challenge of growing into two new roles during the pandemic. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Quotes Separating serving as CEO from Board chair - ChroniSense Medical I felt that the separation of the CEO and Board Chair role would diversify responsibility. It's a good check and balance for the CEO to have a separate board chair to oversee, to challenge, to support, to help ignite things that are important and help move us forward, break down barriers and support me on those things, or to help put the brakes on if they think I'm going too fast on something. Big Ideas/Thoughts Independent Board member as Board Chair of startup company The intention originally was to find the right independent board member, who would be a good fit for our board, help us build our company culture, and who would have a strong background to support me during this early stage of company growth. We found a really strong individual who we believed would be a terrific addition to our board. Then I proposed to my two current investors/board directors - We've got a really unique person with terrific experience who's an MD, holds an MBA and MPH, has raised capital as an entrepreneur, sits on other boards, is local, with impeccable education, and is a terrific person! She also happens to be female. I think she’d make an excellent board chair for us and that we should seriously consider naming her so. We were looking for a great independent director and found an amazing board chair! ChroniSense Medical “ChroniSense is a company I joined at the beginning of the pandemic. I signed on and started in February 2020, flew to Israel, met with the group and I was… really impressed with the investors I'd be working with and the leadership team … . Just great people [and] great talent; smart, creative, great problem solvers, and meaningful technology…” …”the opportunity for ChroniSense … how to support transition from the acute care settings into the community-type care, remote care, and how can we help with chronic care support / the variety of conditions that need to have ongoing management…” “… this is not a consumer device, it's not a health and wellness device, it's a medical-grade monitoring device that we will put through the FDA offering medical-grade, on-demand, in-the-moment detailed information.” LeMaitre “I met the LeMaitre team right around the time I joined ChroniSense Medical as CEO in the late winter of 2020, and when this opportunity came about, I wanted to make sure that I could tackle both my first board role and my first CEO role which were happening at the same time. Luckily, my main investors appreciated the value of their CEO having other responsibilities like this, building other networks, so they very much supported the opportunity for me to join the LeMaitre board.” Fuqua School of Business I was at Fuqua recently; I'd been asked to guest lecture the second-year students of the life science sector at Duke. The last question I was asked was: What were you most surprised about when you took on these two roles, as CEO of ChroniSense and joined the board at LeMaitre? And I said, "…I was…surprised at how much fun it is to learn these two different things I'd never done before, how much I'm enjoying it, how much I'm looking at it as… another chapter, and how you can have so much joy in every chapter of your professional life - whether it's being a second year student as an MBA here at Fuqua School of Business at Duke, or whether it's… carrying a bag for the first time, managing people for the first time, moving to a bigger country or a bigger role or global role, leaving a company, going to another company. I guess what I found so amazing is how much I've learned and how much I've enjoyed the different opportunities I have been afforded."
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47. Coretha Rushing: companies are well-advised to act as if “human capital” really matters
11/15/2022
47. Coretha Rushing: companies are well-advised to act as if “human capital” really matters
Coretha Rushing talks about the important role a Chief People Officer plays in management and on the board. Many companies say people are their most important asset, in this episode we talk about what an organization should do to reflect that priority. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Quotes I haven't worked at any company where they don't say people are our most important asset. I've not worked at any company where they say they want to operate in an ethical way and that people should be respected in the workplace. But we hear, unfortunately, every day, both in the news and personal engagements with friends and family members, that there are things that happen in the workplace every day that should not be happening, and that must be impacting how people are showing at work and their effectiveness when they are there. I think what has changed dramatically with the pandemic and the lack of talent in the marketplace is that smart companies are looking at their talent very differently. The role [of CPO) becomes critical, and they’re sitting there with the CFO talking about the other major assets of the company. When I left Coca-Cola and people contacted me about opportunities, I wasn't interested if it didn't report to the CEO. I was very fortunate to work for CEOs who felt it was important I attend the strategy sessions, to ensure I was aware and informed on real-time basis those things impacting our business The reason I've had the benefit of being contacted about so many board opportunities is because so many boards have lack focus on their people assets and are deficient in the area of human capital. It's amazing to me when I'm sitting on a board among former and current CEOs and COOs and CFOs, how little they understand about the basics in managing, engaging and retaining talent. Productivity is not "I'm sitting at my desk all day long." Productivity is you ask me to deliver X by X date with these performance parameters, and I've checked the box on each one. Big Ideas/Thoughts For the majority of time when I grew up in HR, the majority of employees in the human resource function were women. But when I reflected on my own career, most of the time, the most senior people tended to be men. Most companies spend a lot of time, effort, and money on the acquisition of their human capital, but like people who save their whole life for something like a brand-new car and then later you see it and it's got dents in it and it's not clean, and you're thinking, "I remember this guy wanted this car, and now look at it." Sometimes I feel like companies acquire people and then they don't take the time to understand what the asset is that they have. All of my boards have been very, very different, but they all have a common thread, which is the expectation is not that you run the company, but that you weigh in on the runnings of the company; that you hold the CEO and the leadership team's feet to the fire around what they espouse as the strategy and whether or not they're staying on track to the strategy that they've communicated. When I was at the Coca-Cola Company and Equifax and things happened around the world, it had an impact to us in the US. Even though we may want to believe that we're the dog wagging the tail when it comes to talent, I'm not always sure that that's the case. In my mind, companies are better, and our country is better when we have people from all over working and making us a better place. I'm hoping the pendulum will swing back to the middle because I think there are many organizations that know they have benefited from having diversity of talent in their talent base. I think this whole focus on employee engagement is trying to find that happy medium. I do believe that people want to come into the office, but I also believe that people don't think they have to come in every day. Management believes some employees are not productive and they're using “productivity tools” to test, but employees believe that they are hugely productive. I think what we are missing here is productivity should be based on outcome, not just physically being at a particular place, at a certain time.
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46. Shaz Kahng - changing the stereotype of women in business
11/03/2022
46. Shaz Kahng - changing the stereotype of women in business
Shaz Kahng is a serial CEO and Board Director and with a wealth of experience running companies and businesses and is also an award-winning author of two novels, with a third underway. In this episode she talks about the power of diverse perspectives on management teams and boards, and the tremendous impact it can have. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Links Shaz’s website Amazon for The Closer Google Talk LinkedIn Quotes The Closer [First Novel] I noticed in reading a lot of fiction novels was that if there was a male character who was a business leader, he was allowed to be attractive and smart and successful and athletic and had lots of friends. But whenever there was a female business leader, she was allowed to be competent at her job, but the rest of her life was really negative: for example, she was trying to quash the careers of other women, or she had 13 cats or she was desperate to get married. I thought that these fiction books were not reflecting reality. I've worked with and know so many incredible women who are leading businesses, leading companies who are very inspirational, very positive, who are really focused on helping other women, like Lisa Shalett [co-founder of EWOB] I thought there was just a void in the fiction marketplace. I wanted to address that and write a fresh novel that had a more modern and accurate take on women in business. Some publishers were a little concerned about the theme of the book. I was really surprised [at the reaction by some publishers] because I thought I was offering a very distinct and unique product and one that women would want to read, and I was surprised when I heard from some publishers that they didn't think women wanted to read about other smart women. They didn't want to read about successful women. They didn't want to read about women helping other women, and I just thought they were wrong. I pushed ahead and published the book, and it's gotten a great reception from women leaders and male leaders as well. I've heard some men who are CEOs say, "When I'm faced with a challenge, I think what would the main character Vivien Lee do in this situation," and then they make a decision that way. So, that's been very gratifying to hear. Big Ideas/Thoughts Extraordinary Women on Boards EWOB is really focused on educating current board members. In order to be on EWOB, you have to be currently on a board or previously on a board so it's for people who really are experienced board directors, but the focus is on continuing education, discussing topics that are top of mind for boards and just really expanding board members' capabilities and understanding of different issues. It is a really helpful resource to have such qualified women who are experienced on different boards to be able to share their experiences, share their perspectives, network, and also let each other know of opportunities. Strategic war games [at OMSignal, a biometric apparel startup] I suggested to the board and to the founders that we do a strategic war game, which is type of simulation game that you play, that helps you build a very forward-looking strategy. It helps you figure out what the holes are in your business strategy, what the opportunities are, where the industry sector is going. As a result of that strategic war game, we ended up focusing a little bit more on women and I had been asking the founders, "Why are you just focused on men's compression and introducing a smart sports shirt? Why not women's compression?" And they said, "Well, what product would that be?" And I said, "Well, women wear a compression product every day, which is a bra, so why don't we do a smart sports bra?" I think that's why populating your board with people of different backgrounds, different ways of thinking, differentexperiences are so critical to ensuring a successful future for your company. Onboarding: Private vs Public Boards It was a vastly different experience. With the private company boards, basically on my first day they said, "Okay, can you help us figure out our revenue projections? Do we do it the right way? We need help with marketing. What do you think about this copy? Or should we be spending more money doing these different things with our marketing budget?" it was very hands on, very deep. With the public company board, it was much more of a formal process. There were certain pieces of information that I needed to review, SEC documents that I had to fill out, and then I also had interviews with, I think, three or four members of the board before I was nominated, and I also asked to meet with all of the board members individually before I actually joined the board Science Background I think a science background was a great foundation for a business career, and one of the reasons is that it helps you really approach problems from a holistic point of view. I think it gives you an ability to develop hypotheses on how to solve problems, to experiment with different results that might work and to ultimately pick the right solution. LiveGirl LiveGirl was started by Sheri West. She was a former GE executive and she noticed that there weren't enough opportunities careerwise for women from diverse backgrounds and she wanted to do something about it and she's doing a terrific job with it. LiveGirl helps to provide girls, middle school and up, with the skills that they need to be able to succeed in the workplace, like better communication skills, negotiation skills, interviewing skills and things like that. They also help set up girls in the program with summer internships with different companies.
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45. Culture may eat strategy for breakfast, but technology eats the world!
10/17/2022
45. Culture may eat strategy for breakfast, but technology eats the world!
Jane Chwick, the former Co-Chief Operating Officer of Goldman’s technology division, and a seasoned board member, talks about the critical impact of having a technologist on a board. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Quotes Getting my first board seat. The simplest way to say this, I followed the advice I had given to more junior people in my organization for years. I let people know what I wanted, I told everybody who asked me what I wanted to do or where I was going, that I wanted to sit on boards, and somehow it made its way through the grapevine Importance of a technologist on the board. If you have even one technologist in the board room pushing back, and if it's the right technologist, they're pushing back in English to the right point, and it will inform the entire board. Big Ideas/Thoughts Extraordinary Women on Boards (EWOB). One of the things that Lisa Shalett has created that's unbelievable about EWOB is on a monthly basis there's a list of board seats that she puts out. She's not a recruiting firm; recruiting firms, will talk to you about the one possible position that might be appropriate for you. Lisa sends out the email of all of the possible board seats, and it's up to you to decide what you're interested in and what you might want to view yourself as a fit for that you can apply to. That's a very different model in the job search world or the board search world, and that's been very valuable Preparing for an IPO. the IPO process was very interesting because the other boards I had joined were already public, and so this was bringing this company to an IPO and being part of it as a board member was very interesting. The board met with all the big name investment bankers that you could possibly think of and interviewed them all and then we had board sessions around ranking them and deciding which ones would work the best for us and would meet our needs. There were a lot of meetings along the way in terms of creating the right governance structure; we didn't have a compensation committee, a nomination and governance committee, an audit committee and we had to make sure we had the right people on the board for those committees. Don’t lose the secret sauce. Sir Ian Davis was the managing director of McKinsey and is a very impressive person. With all of his background at McKinsey that's helpful in learning how to scale, but he is very conscious to not break what ThoughtWorks is. Raza. I love to tell everybody famous Agile seminal joke of the Pig and the Chicken. A pig and a chicken get together and the chicken asks the pig, "Hey, should we open a restaurant?" And the pig says, "Hey, what are we going to call it?" And the chicken responds by saying "ham and eggs." The pig thinks for a little bit, and then says, "No, thank you. You'll only be involved, but I'll be committed." This is the principle of committed versus involved in a stand-up meeting where people that are merely involved are not allowed to speak in a stand-up meeting. As one of the really important original works for Agile development that Martin Fowler and others did, I may not know ThoughtWorks, but as a recovering technologist I know Martin Fowler. Voya Culture. We announced the new CEO of Voya in the summer and her name is Heather Lavallee and it's very exciting because when I joined the board of Voya another woman and I were the first two women on the board. There were hardly any women in the senior, senior leadership team, and roll the clock forward, not only are there women in the senior leadership team, but the new CEO is a woman. I think 50% or more of the board are female. It's an amazing story
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44. Sylvia Acevedo: Rocket Scientist, to CEO and beyond!
10/02/2022
44. Sylvia Acevedo: Rocket Scientist, to CEO and beyond!
From living on a dirt street in rural new Mexico living in poverty as her parents struggled paycheck to paycheck, to rocket scientist, CEO, board member extraordinaire and bestselling author, Sylvia Acevedo’s story is an inspiring story of transformation. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Quotes On writing "Path to The Stars:" My Journey From Girl Scout to Rocket Scientist “I chose middle school because the way the world is evolving, science and technology are embedded in everything that we're doing, and you need to have at least a modicum of understanding about science and technology, and middle school is kind of that last time you can choose those electives and that really what is like an inflection point in your life.” I was the beneficiary of some great programs like Head Start, obviously the Girl Scouts, but I also had really amazing teachers and mentors, and then I was able to develop skill sets that became extraordinary, that were able to give me opportunities like math, being able to have the kind of math skills to be able to re rocket scientist. It was a confluence of those things that I realized gave me this great opportunity to live a life of my dreams and my potential. My Girl Scout troop leader taught me to never walk away from a sale until I'd heard “no” three times, and that was so transformational because I had been raised in a Spanish-speaking household and kids are not supposed to speak to adults until adults speak to them, that's a really hard way to sell cookies. it taught me is persistence, resilience, and how do you get to the yes. Big Ideas/Thoughts My fourth grade teacher, Mrs. Baldwin, showed us pictures of universities in class one day, one of which was of Stanford. Remember I grew up in the desert Southwest, one of the most extreme deserts. There's the Tundra, there's the Sahara, and then there's the Chihuahuan Desert, and that's that part of New Mexico where I was raised. When I saw the green verdant hills and the red tiled roof and the limestone buildings, I just said, "I want to go there." And I probably meant I just wanted to go there to see it, but she walked to my desk, and she said, "You know, Sylvia, it's one of the best universities in the US and the world, and you're a smart girl and you can go there." Impact of Girl Scouts I had the goal and the dream, wanting to work in NASA, or be part of the space program, going to Stanford. I had those adult mentors. I had extraordinary skills and also I had that drive of wanting to leave that for something better. As I mentioned, my family struggled with money and I was really fortunate that the troop leader that we had said I could be part and do everything, but I had to sell a lot of cookies and use my cookie funds for those programs, and that was so important because there were several things that I learned from that. For people listening on the call, we all know how to do that, but for a kid who's been raised in near poverty and the circumstances, I didn't know how to do that, so that really was that light bulb moment that taught me that I could have my goals and dreams, which is also why in fourth grade, when that teacher showed me the picture of Stanford, I was able to say, "Okay, what do I need to do? I need to break it down into smaller steps." CEO of Girl Scouts of USA: One of the Girl Scout mantras has always been leaving a campsite better than you found it. So, when I became the CEO I got to work! We created 146 new merit badges during my four-years as CEO, more than at any other time in history, and we also grew the cookie program by about 80 million dollars as well. 126 of the new badges were STEM: coding, cyber. robotics, design thinking vehicles. We did a partnership with General Motors and some with NASA as well, 126 STEM badges that are just really great badges for girls to earn. Competitiveness in the tech Job Market When you think about semiconductors, you realize that they're the brains and so much of what we're using to drive and create and power our world. If you think about the United States and you have a workforce of about a hundred million people, you think, "Okay, in our top 10% is 10 million. You now have a couple of countries; India and China, who can provide more than 10 million people who speak English fluently in our technology advance, and so there is a whole lot more competitiveness. In addition, you have the dispersal of work, so work used to be done locally. For the United States, we had a lot of people who kind of figured, "Well, I just need to work near a certain location, and I'll be able to have work, and not only that I speak English." Those two competitive advantages many ways have kind of gone away for many jobs, the competitive advantage of local proximity and the competitive advantage of English being a unique language. Yes, English is the language of business, but now there's a lot more people speaking English so it's just not a competitive advantage now.
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43. Eric J. Dale - General Counsel, Board Advisor and Risk Manager
09/16/2022
43. Eric J. Dale - General Counsel, Board Advisor and Risk Manager
The role of legal counsel for organizations and boards varies wildly depending on the situation, but in all instances provides a valuable resource for companies at every stage of evolution. In the episode, Eric Dale - who has served as a legal advisor in many capacities for a wide range of companies – discussed the important, often critical. Role that a company’s legal advisor can plan. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Quotes The General Counsel role, whether it's as inside or outside counsel, can add a tremendous amount of value as a company is making the transition from founder-owned and operated to founder significantly owned and operated, but having third-party capital and new partners in the business. Nielsen is New York Stock Exchange company and while I was there while it operated in about 106 countries, had approximately 47,000 employees and its peak enterprise value was approximately $28 billion. My role included making sure that items that fell into my purview - legal, risk, compliance etc. to the extent they were worthy of getting on the board agenda, got on the board agenda. I don't want your listeners to think that when a company is smaller, there is materially less formality. I would rather leave them with the idea that as companies get bigger, both the materiality of the issues, the magnitude of the issues, and often, although not always, the complexity of the issues are such that it just requires an additional layer of activity and oversight. Board minutes like contracts will largely be reviewed with the benefit of hindsight, so no one is looking at them unless and until there's a problem. And once there's a problem, if they're inconsistent or if they provide fodder for misinterpretation or multiple interpretations, you run litigation risk. Big Ideas/Thoughts As companies scale, generally the role of the board becomes more formal. I think that's actually a good word and a good concept to use. There is certainly regular communication with the board or individual board members between board meetings in all companies with which I've been involved. But when you're dealing with a large multinational company, there are just a significant number of, not only issues, but things to consider whether it's the global nature of the business, NASDAQ or New York Exchange rules, and a variety of other issues that can have a major impact. For instance, one of the issues we were always focused on was antitrust. Nielsen was a very big player in the markets that it served. It was also a very transactionally oriented business, regularly buying and selling companies, and in doing that analysis there's always an antitrust or a competition analysis that had to be undertaken. The board cared deeply about that, and some of those issues, if not existential, could certainly be very material to the ongoing business and operations. The formality in terms of making sure every "t" was crossed and "i" was dotted was critical to make sure that the board got the best advice that it could in order to make the decisions that it ultimately needed to be made. Outside GC My own view, and again, listeners need to think about this through the lens through which I'm speaking - I don't see a lot of downside to it having an attorney in the room who can call balls and strikes or make sure things stay within the appropriate lanes, and who can put minutes together that will reflect what minutes ought to reflect. Bankwell Financial Group When I got involved, it was a private $250 million bank, kind of a community bank. We've grown since I’ve served on the Board to about 10 or 11 times, or just under $3 billion now. The banking business is a highly regulated, highly complex business. The fundamental business of taking in money at X and loaning money out at X plus it is not that complicated, but the machinations that go into that are very complicated. For our bank there are two regulatory bodies. One is NASDAQ but in addition regulated businesses like banks are audited by their regulators very frequently, usually annually, sometimes every other year. There's always an audit of some sort going on in addition to the traditional financial audits, and there are things that regulators want to see and expect to see on which we are focused. Going Public It’s important to recognize that a public company will have at least three committees: governance, compensation, and audit, all of which require appropriate expertise. For example, Audit requires a financial expert, so you want to make sure you have at least one financial expert. That's a defined term within the SEC, but it's basically someone who has been a financial executive, like a CFO, or has overseen financial executives like a CEO or someone who comes out of the financial industry, such as an auditor or someone with that type of background. Separate Risk Committee As we think about taking on more risk in particular at our bank, that usually is a full-board conversation, not just a committee conversation. Risk is a very broad topic in every business and certainly in banks, and so we think about that in the context of where technology would then sit. There are a number of factors to consider in determining whether there should be a separate board risk committee. For example, is technology a proactive thing or is it a risk thing, other than cybersecurity and privacy, etc.? We have established a separate a Technology Committee but have left non-technology risk within the domain of the Audit Committee Perhaps as our bank and other institutions scale, then it could make sense at some point in time to break risk out. Right now, we've examined that, we've considered it, and we've concluded that risk sitting within audit works for us, and we feel like we're managing it effectively.
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42. Startup Boards: A Field Guide to Building an Effective Board of Directors
06/17/2022
42. Startup Boards: A Field Guide to Building an Effective Board of Directors
In this episode, Brad Feld, Mahendra Ramsinghani and Matt Blumberg talk about their new book, it is an incredibly inciteful and comprehensive look at Startups and all boards. An instruction manual for CEOs who are building and leading a board and a valuable reference for existing board members, aspiring board members and venture investors. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Links Quotes Matt: It's never too early to build a board and, as a CEO, if you get good board dynamic, you have created a secret weapon for your business - a strategic sounding board that you couldn't go out and buy. Brad ¨Jeff Lawson said: “I view the board as another team that I get, and why wouldn't I take advantage of being able to create a great team at that level that can help me grow and develop both the business and me as a CEO?" That summarized it as well as I've ever heard it said by an entrepreneurial CEO The really interesting and important dynamic around board of directors are how they function as a team and how the individual participants engage with each other and how the CEO engages with the participant, and then how the management team fits into that, and that all of that is true if you're aspiring any of those things; board member, investor, entrepreneur, or experienced. Mahendra: The board can make it a safe place for the CEO to feel comfortable, feel confident and engaged as a team of equals. It's important for the CEO to build their inner self-confidence so that they can sit in the same table, to be in the same room with people who are 5 years, 10 years ahead in the journey and hold their hand or say, "I need help. How would you do this?" At the same time, being honest, and what they did in that time may not always be relevant, so there's a fine line, but having the sense of confidence to surround yourself with giants is extremely important. Matt: No Slides! When there are slides on the wall, two things happen. Whoever is presenting reads the slide out loud, which drives me crazy. It drives everybody crazy, because you should assume your board members can read. But the other thing that happens when you have a slide on the wall or a slide on the screen is that all eyes are on the slide. What you want to have in terms of a dynamic when you're trying to have a meaningful discussion among people on a team is you want eyes on each other, not eyes on the wall. Brad: The best boards: you fight, you argue, you challenge each other, you disagree, but you're friends and you have respect for each other, and you carry each other with some amusement. Those are the best boards. Big Ideas/Thoughts New in the 2nd Edition of Book Matt added a lot of new content from a CEO's perspective We made a very significant shift and replaced a lot of sidebars and quotes with new content specifically from women and from people of color, to allow the book to be more representative of what a board should look like for a startup in 2022 in terms both gender and racial equity. We’ve written this book in such a way that it addresses the full spectrum from someone who is an aspiring entrepreneur, investor, board member, to someone who is a very experienced entrepreneur, investor, board member. Lessons from the Boardroom If nobody does the work to develop the board as a team you have just a collection of people. I see that a lot among startup boards where the CEO does not put energy into building a highly functioning team or the CEO doesn't ask one of the board members to take a leadership role in helping her do that. There a benefit of having a lead director or a board chair who is not the CEO, because then that person can take the leadership when all of a sudden things are not being constructive and to try to shift the tone and the narrative and the discussion dynamic from one that's not constructive to one that is. In those situations, a strong, experienced, respected board member who might or might not be an investor can often play that role, and it's a very, very valuable position to have an outside director that's experienced, that's well respected who in those moments can step in and basically say some version of, "Hey guys and girls, cut the bullshit. Let's stop this. This is not being helpful. Let's step back. Let's calm down. Let's talk about what the issue is and try to solve the problem." It's important to have a lot of people that can play that role. More Important Board Meeting Practices Prepare and circulate material in advance. Then assume the board members can read, so start the board meeting and run the board meeting as though everybody has already read the material. Have a clear objective of what is this meeting about. The best board meetings I'm in have a board package that goes out in advance that is separate from the board meeting presentation, and the board meeting presentation for each section has some version of a preamble, which is, "Here's what we're going to cover and here's what I want to accomplish as CEO. A lot of people think of their board or a way of thinking about the board is, " I've got to have some investors in my board, and so anybody else I add to my board, I want to get the best networking I can from them because I want introductions." That's really limited thinking. Especially if your business is young, you don't really know what direction it's going to go in, and so people that have very different frames of reference from you but experienced in things that are additive to what you're doing can add another layer of diversity to the board. There has to be a conscious effort to search for board members outside your zones of comfort. That is not easy. It takes time. There are no easy paths to build bridges into other domains, but that is a very essential function every entrepreneur should try and build upon. No Slides! When there are slides on the wall, two things happen. Whoever is presenting reads the slide out loud, which drives me crazy. It drives everybody crazy, because you should assume your board members can read. But the other thing that happens when you have a slide on the wall or a slide on the screen is that all eyes are on the slide. What you want to have in terms of a dynamic when you're trying to have a meaningful discussion among people on a team is you want eyes on each other, not eyes on the wall.
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41. How companies are responding as the Pendulum Swings: ESG risk management, Board Diversity and Stakeholder Capitalism
06/01/2022
41. How companies are responding as the Pendulum Swings: ESG risk management, Board Diversity and Stakeholder Capitalism
In this episode, Terry Johnson, an attorney who advises management and board members of both private and public companies, talks about what clients are facing regarding ESG risk identification and management, and how boards are responding to the growing push back against mandated board diversity and stakeholder capitalism. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Bio Terry is a corporate and securities partner at the law firm of Arnold & Porter. She acts as a trusted advisor to the C suite, boards of directors and board members. In her corporate governance work, she advises both public and private company boards and management on board diversity and stakeholder capitalism. Among other areas, her practice often involves counseling management and boards about ESG risk management, including disclosure and liability issues. She often speaks and writes about corporate governance and in particular, board diversity, including the California board diversity legislation and NASDAQ’s listing rules, and she has authored articles in the Financial Times regarding the effectiveness of quotas in achieving board diversity and the treatment of climate change as a systematic risk to global finance. Terry’s experience also includes representing wineries and winery owners, and family-owned companies in a variety of industries. She has been recognized by the Daily Journal as one of the Top 100 Women Lawyers in California and has been included in Best Lawyers in America since 2014. In 2022 Terry was selected by the San Francisco Business Times as one of the 13 OUTstanding Voices paving the way for LGBTQ equality in the workplace in its annual Business of Pride awards. Terry is currently the Treasurer of the Bar Association of San Francisco, in line to assume the presidency in 2024. Links Quotes Board Diversity We are now starting to see a pushback on ESG generally and board diversity in particular as witnessed by the challenges to the California legislation regarding board diversity. Conservative groups are also bringing claims in the Fifth Circuit in Texas against NASDAQ's board diversity listing rule. The NASDAQ rule is not mandatory, it's not a quota, it's a comply or disclose and explain why. Essentially, you're not required to put more diverse directors on the board, you just have to tell people why you haven’t, but in today's world, knowing that there would be a strong disincentive to having to explain why you couldn't find a qualified woman for your board or you couldn't find a qualified member of an underrepresented group. The investment community has been the loudest voice in support of board diversity, but we're certainly starting to hear other voices that are pushing back and saying, "No, we think you ought to be simply deciding board members based on the way we've always done it." Diversity quotas are a “rough justice” approach in that it requires you to put different people on boards - but it does work. The argument against mandated board diversity is that that instead of making a decision about a board member based on pure merit, it’s made on another basis: "We don't want to be required to pick a director who happens to be a woman or director who happens to be part of a member of an underrepresented community, we want to pick the best director whoever that is." Big Ideas/Thoughts ESG risk management The ESG realm is huge, I mean, just climate change alone under the E part of it, is an enormous topic in itself, and then S and G, the social and governance aspects of it are related, but completely separate sets of issues and concerns to think through. Wildfires are a huge concern here in California, which is where I'm based, and a good example of ESG risk management. I'm talking to clients about in various respects about how to think about potential liability, how they could be affected by wildfires. If they are involved in a business that puts them at risk for liability related to wildfires, how to consider that - that's just one example of things that I'm starting to see come across my desk. One of the things that is challenging to navigate the ESG waters, especially for public companies, is that you have to figure out how to say things because you want to let the market know about your commitment, but at the same time, not set yourself up for liability, and that's a huge challenge. For example, what it means is reading your ESG report side by side with the 10-Ks and 10-Qs and other periodic reports you've put out under your 34 Act reporting and making sure that at the bottom line, you don't have inconsistencies. You have to be clear with the market and with all of your stakeholders, which would include not only your shareholders, but your employees and your suppliers and the communities in which you do business and so forth about exactly what you're going to do and to be careful about not making statements that could be called greenwashing, not overstating what you're going to do. Stakeholder Capitalism I think that the Business Roundtable's statement in August of 2019 really had an enormous impact on changing the conversation about stakeholder capitalism. It put that on the front page of every business newspaper, and it brought it to the forefront in a way that I don't know that any other kind of initiative could have done. You have buy-in from companies that are the leading corporate lights, companies that are solidly in the mainstream, the biggest financial institutions, for example. I think that's really a good thing. Q: When you advise your clients about stakeholder capitalism, what do you advise them to do in order to be able to manage this issue? I draw their attention back to their fiduciary duties because the bottom line is, as a director, you have fiduciary duties, and that's what governs your job, that's your north star in fulfilling your duties as a member of the board…you have a fiduciary duty to your stockholders. Regarding short-term and long-term goals and how you look at it in advising directors, I would say, "Well, your fiduciary duty is to your shareholders. You don't have a technical fiduciary duty to your stakeholders, but it's a question of looking at the long term and looking down the road. Do you see that in order to operate your business in the longer term, you're going to need to start planning for the effects of climate change? You're going to need to start pivoting away from a particular business because it has such a high carbon impact, or maybe you want to invest in something that is a carbon capture technology?” It all comes back to your shareholders - from a legal standpoint, that's still the guiding light.
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40. The many faceted challenge of creating and maintaining an effective board
05/15/2022
40. The many faceted challenge of creating and maintaining an effective board
Anthony Goodman is the leader of the North American Board Effectiveness Practice for Korn Ferry, and he understands the challenges boards face meeting the challenge of becoming a high performing board – and maintaining excellence. In this episode we discuss some of those challenges. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Links Quotes Who is responsible for ESG? The idea that ESG is not going to impact the entire board and every committee is a mistake. If you think about ESG as it's supposed to be, it is about the company's strategy and its risk management. What you're really asking is, “what are the material risks and opportunities of ESG.” ESG Expertise Question: With the increasing emphasis on ESG, does that mean board need a new set of skills and tools and, if so, what are some of the skills and tools they should be considering? What boards need to do first is understand “what are the material risks and opportunities for our company, and when they have done that assessment, or management has done that assessment for them.” Then the next question they need to ask is, "As we look at the issues for which we need to provide oversight, do we have the skills and experiences on the board to do that? If there's something glaringly missing, how do we get that skill into the board? But maybe it's about the whole board upskilling. Maybe it's about the fact that everyone on the board actually needs to understand what the material risks to the business are. Michelle Edkins, who runs the stewardship team globally at BlackRock, has this wonderful saying: "A board made up of one trick ponies is a circus." Board Effectiveness How involved is the board in the strategy how involved has the board been in helping to develop the strategy and overseeing the strategy? How involved are they in risk management and identifying and making sure that risks are being dealt with? How effective have they been in hiring and firing CEOs The question is who can the board get feedback from? It’s often just within the board itself, but you could, for instance, ask senior managers whether the board is actually adding any value to them. Is it providing guidance? Is it providing challenge? Do they feel stretched by this board or not? You could ask your investors. You could ask your audit firm. You could ask your law firm. There are a number of stakeholders that are in and around the boardroom that observe how the board is doing. Board meeting agenda It takes a certain amount of courage to ask for an outside-in view of the board. It's much easier to do than an inside-out view and just ask the other directors how you're doing. People have got a lot of choices these days. The idea that boards are the buyer, actually no, boards now have to sell themselves to candidates, particularly good candidates who are women - who are people of color, who are digital natives - because those are the people everyone want on their board, and the real question is, why should they want to come on your board? I think we've all got to be grownups about this, that sometimes it's just our time and we have to be willing to let go, but I think a lot of people's personal identity is tied up with being a board director, and if this is your last public company board, you're going to try and hang on to it as long as you can. Otherwise, what are you going to tell people down at the golf club that you do? You're a board director. I sometimes say collegiality is a mask that covers up a lot of problems underlying in the board, and one of them is the inability to let go and allow people to make a dignified exit from the board. Big Ideas/Thoughts Board Culture Culture problems cause issues for lots of companies, and it isn't just when there's a merger. It can be where you've got groups of employees that are fundamentally different from each other. How do you treat those employees? The question that comes to my mind here is accountability: how does a board hold management accountable for building the culture. I think it's very hard to draw a straight line between an effective board and an effective company, but I think when the board is ineffective, it starts to erode what the company can do, what kind of strategic opportunities it has, the quality of the people it can recruit into senior management. A bad board, I think, can create a lot of havoc inside a company, but a good board doesn't necessarily make for a good company. Boards are often lagging indicators around strategic change. They're not always leading indicators and we often see companies where the board is quite a way adrift of where the company has evolved to. I want to give you another C-word that boards should be thinking about and that's courage. If we had courageous conversations between board chairs and board directors, between non-gov chairs and board directors, this [off-boarding] would be so much easier. But collegiality often trumps courage, and I think that's a big problem for boards. Diversity Just to go back a little bit, so why is there this focus on diversity? A lot of it actually came via the investors, the investor community. Why did they want boards to become more diverse? What they're really trying to do, I think, is to make sure that boards are cognitively diverse, but that is something that is really hard to do from outside. You can't assess whether a board is cognitively diverse from the outside, and by the way, there's nobody trying to assess whether they're cognitively diverse on the inside either. What do investors say? They've said, "Okay, if we knew that the people on the board who definitely come from different backgrounds and different approaches to life, then we could imagine there might also be cognitive diversity.” Our own practice, our board practice over the last couple of years, has been running at about 55% of all the people we put on boards in the US are women or people of color, I think that's pretty consistent across all the search firms. A lot of first-time directors, women and people of color, are not perhaps being heard as much in the boardroom as they would have liked. I think a lot of board chairs probably think they're doing a good job trying to get everybody's voices to be heard, but I think that boards have to work quite hard to be inclusive and to make sure everyone feels comfortable in the boardroom. Board Succession Planning They ought to be looking at the strategy of the company, thinking about where it's heading over the next three to five years, and then looking at the skills and experiences that they have today and understanding the gaps. Let's say 10 years ago, the company might've been a purely domestic company. Now it's made a number of acquisitions globally, and there's nobody on the board with international experience. Think about what next three, four, five directors are going to look like, and wouldn't it be great if out of those five, at least two, maybe three were going to be women that a certain number would be people of color, a certain number of them would be under the age of 56. In that way, if we land on some fantastic former CEO today, happens to be a white male and doesn't check any of those other boxes, we can still have that person on our board because we know we've got four more slots to fill, and we're going to make sure that in that batch of five people that we've got all the skills, experiences, and backgrounds that we want as opposed to trying to load them all on one person.
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39. Gabe Kleinman - The most valuable companies of our time will be the ones solving humanity's biggest problems
05/01/2022
39. Gabe Kleinman - The most valuable companies of our time will be the ones solving humanity's biggest problems
In a very short time - six, seven years - we’ve gone from impact investing being referred to as "invest for less" to “companies responsibly harnessing technology to solve big problems will outperform.” In this episode we discuss how ESG has helped to drive that shift and the impact it is having on investing and board governance. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions . Links Board education & certification: Book on Board Architecture: Gabe Bio: Quotes Ev Williams on why he founded Obvious Ventures: "I want to fund the companies that I wish existed in the world." Obvious exists to back purpose-driven founders reimagining trillion dollar sectors. We are a multi-specialty firm investing in the fundamental building blocks of life and society: food, transportation, housing, healthcare, and more, investing in companies that are completely reimagining each of those sectors for the better. For the first number of years at Obvious Ventures, we did not talk about impact. We actually banned the "I" word because the industry of “impact investing,” as it was originally constructed, was not a returns-focused industry. It was an industry wishing to realize some returns alongside some sort of social or environmental impact. There was a general belief that one would have to sacrifice profits in order to get that impact return, so to speak. We founded Obvious Ventures on the simple belief that the most valuable companies of our time will be the ones solving humanity's biggest problems." For earlier-stage venture, board observers are common, and I think that's due to the nature of the stage of the company and what they need to do in order to survive, because for early-stage venture-backed companies the fatality rate is high – they want as much good advice and help as they can get. A colleague of mine has a saying, "Startups don't die of starvation. They die of indigestion." And so helping them figure out what to focus on and how to get there really helps, and from a CEO standpoint, the board is an extension of your team. Board meeting agenda So many boards get bogged down in the actual board room with these graphs and data and charts and everyone's squinting and it's like going through a boring presentation for 80% of the meeting. We recommend that CEOs really anchor their meetings in OKRs, (known as Objectives and Key Results), walking through a literal scorecard of how we are doing. Red, not going so well, yellow, we're doing okay, and green, things are going really well. If you're spending 80% of your board meeting with presentations, you're wasting your time. The board meeting is not the time to educate the board. That is the board's homework. They should come to the meeting, having done their homework and be prepared to do exactly what you just said, address the issues that the CEO and/or whatever, the management team is really grappling with to get the most value out of the people that are in the room. Boring presentations at a meeting can be a telltale sign. Most early-stage startup and venture-backed boards are hands-on problem-solving boards. The nature of the meeting tells you a lot of what's going on with early-stage boards. Objectives and Key Results, and it's a framework popularized by John Doerr, and before him, Andy Grove at Intel, can be an effective way of running organizations from small to large, and especially an effective dashboarding mechanism for board meetings. Big Ideas/Thoughts What is a B Corp What it means to become a certified B Corp is you have to score above a certain threshold on an assessment that an organization called B Lab has created which assesses what are functionally environmental, social, and governance practices of the company. I think it's a great tool for any company of any size to take just as a reflective tool to understand your operation and how you're doing. Refreshing your board A company is a different company at a Series B stage or series C stage with $50 million in annualized revenue, then when it had a $100,000 ARR and it was just getting started with three board members. So often it makes sense that a CEO may need a different set of directors with a different kind of experience at a different stage, while still maintaining some continuity and understanding of the roots and the original purpose of the organization. Impact Investing vs Investing in purpose-driven companies We believe that the biggest challenges that our world is facing, oftentimes highlighted by activists and social entrepreneurs were, in fact, big market opportunities and that companies solving those problems would realize the greatest returns If you look at both consumer sentiment as well as companies that are trying to attract the best employees, the best employees want to work at companies that are having some sort of an impact, and the easiest way for us to measure that impact is through revenue generated and services rendered. It’s that simple. For example, if you look at Proterra, every time they sell an electric bus, they're taking a diesel bus off the road. Every time Diamond Foundry sells an engagement ring or creates a semiconductor wafer chip that is lab grown, it's hopefully taking a diamond mine, which is carbon-intensive with horrible labor practices, out of business. It's everywhere now, and everybody is waking up to the reality of these problems that we have to solve. It’s important to note that we need the public sector. There's no question about that. Without a healthy public sector, none of these can be solved, and same with social activists who often highlight these areas for us, but we need the private sector to be a driver of innovation and delivering those solutions through the market. We are believers in capitalism. We think we need to change the definition and the practices of capitalism, but that's kind of happening on its own. Everyone is waking up to these new realities and the role of the private sector in helping solve them. Beyond Meat as a great example of the shift. There were plenty of plant-based options before Beyond Meat, Morningstar Burgers and Quorn, and they were all in the novelty food section of the supermarket. The epic shift that Beyond Meat pioneered was you don't have to be a vegetarian to love a plant-based product. We are not creating something that is for vegetarians only …we are competing with Angus, and we are going to take them on. One of the big defining moves that Ethan Brown pioneered at Beyond Meat was getting Beyond Meat placed in the meat case alongside Angus options so that everyday people could choose these things. What it really boiled down to was creating a super product that competed with the "original," and you see this playing out across a host of industries, not just in plant-based protein. Tesla makes the safest, fastest car – which also happens to be the best for the reducing carbon. Nest makes the most beautiful, money-saving thermostat – which also happens to be best for efficient energy use. And so on.
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