On Boards Podcast - SoundSage

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In this episode of On Boards, Jonathan Foster joins hosts Joe Ayoub and Raza Shaikh to discuss what makes a board effective in today's evolving governance landscape. Jonathan is the founder and managing partner of Current Capitals Partners.

Drawing from his experience serving on more than 50 boards, Jonathan's book, On Board: The Modern Playbook for Corporate Governance, shares lessons on board evaluations, activist thinking, shareholder accountability, and why the best directors listen first.

The conversation also explores how boards should approach CEO activism, director offboarding, and the growing influence of AI. Foster argues that directors must actively educate themselves on emerging technologies while maintaining focus on thoughtful decision-making and long-term value creation.

Key takeaways

Effective directors prioritize listening
Strong directors listen before speaking in order to understand the dynamics of the boardroom.
Asking thoughtful questions is more effective than dominating a discussion
Credibility is built through observation, preparation, and collaboration – but saying what you think.
Governance history shapes modern board responsibilities
Landmark governance cases provide the foundation for today's fiduciary standards
Understanding the origins of duty of care and duty of loyalty helps directors make better decisions
Governance principles become more meaningful when directors understand the stories behind them
Honest evaluations are critical to strong boards
Boards should directly address underperformance rather than avoid difficult conversations
Annual evaluations are more valuable than arbitrary term limits
If a director is not improving, there should be a respectful and honest process to offboard them
Boards should proactively think like activists
Directors should regularly evaluate the company from an outside shareholder perspective
Boards can identify strategic weaknesses earlier by considering activist viewpoints internally
Jonathan emphasizes balancing short-term pressure with long-term shareholder value creation
AI oversight begins with education
Directors must actively learn about AI before they can effectively oversee it
AI should support board preparation, not replace board judgment and be used in discussions
Boards should focus on AI strategy, ethics, governance, and implementation questions

Quotes

" If you think you're the smartest person in the room, you're probably wrong. But even if you are, every director has just one vote, so you need to develop a consensus to get things done.

" My objective is to not say anything for the first two meetings. I'm just listening; you learn a lot and gain credibility by just listening first."

" I try to make every decision I make as a director, as if my family had 100% of its money in that one company's stock."

" I don't want AI in the boardroom — yet. A boardroom is a place to consider and have conversations and make decisions, not be overwhelmed by data."

Links

On Board: The Modern Playbook for Corporate Governance

jonathanffoster.com

Guest Bio

Jonathan F. Foster is the founder and a managing director of Current Capital Partners LLC, a mergers and acquisitions advisory, corporate management services and private equity investing firm. Jon spent a decade at Lazard, primarily focused on mergers and acquisitions advisory work, ultimately as a managing director.

He has been on more than 50 boards, including Fortune 500 companies, private companies and companies involved in restructurings. Foster has served as chair, lead director and on the three major board committees as well as special, transaction and CEO succession committees. He has been chair of two Fortune 500 Audit committees. He has also been an expert witness in corporate litigation for some 60 cases.

With decades of experience, Foster has written, spoken and been quoted frequently about governance and finance topics and has guest lectured at various universities. Jon lives in New York City with his wife and goldendoodle; he has two adult children.

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In this episode, Joe Ayoub and Raza Shaikh welcome Mark Hamill, CEO of The Naked Headhunter and co-founder of the Virtual Advisory Board (VAB).

Mark shares the origin story of VAB from its start during the COVID-19 pandemic and how it scaled into a global network of over 1,300 members spanning 4,000 boards. The conversation dives into the power of peer-to-peer networks, the mechanics of building effective boards, and the tangible ROI that strong boards can deliver.

They also unpack the realities of board recruitment, what it takes to land a first board seat, and why clarity of expertise and network strength are more important than ever. Mark offers a grounded perspective on the future of board service, emphasizing experience, diversity of thought, and the growing demand for board members who have "walked the walk."

Key takeaways

Boards deliver outsized ROI when done right
Board investment is relatively small compared to impact
Experienced board members accelerate growth, decision making and access
A small, structured board can shift a company's trajectory by turning big picture ambitions into executable strategy
Your first board seat is almost always the hardest to secure
Most board roles come through networks, not formal channels
Once you secure your first board seat, credibility compounds quickly and future opportunities will tend to follow
Mark highlights the importance of understanding yourself and your unique leadership experiences before connecting with networks
Community and peer learning drive board success
The Virtual Advisory Board thrives on member led engagement and shared experiences
The group creates a trustworthy environment for honest conversions where leaders can discuss difficult and high pressure decisions
Members bring live challenges and get immediate input from peers who've faced similar situations
Board composition is about complementary experience
Strong boards blend industry expertise, scaling experience, and global perspective
Diversity of experience leads to better outcomes
The most effective boards are intentionally built around the company's specific stage and challenges, rather than prestige or status

Quotes:

"The strength of your network really becomes 80% of the reason how your next role will be sourced."

"We're (VAB) not going to tell you what to do, but we can certainly share experiences of how other people have dealt with it."

" Where you are in your board journey, there'll be different tracks internally that you can kind of take depending on where you are in your voyage."

Links

The Naked Headhunter

Virtual Advisory Board

Bio

Mark is the CEO and founder of Naked Headhunter and has been involved in executive search since 1999. During his career he has placed over 500 executives and he works across all practice groups. Mark began his career at Heineken; serving the company in a variety of commercial roles both in Ireland and in Central Europe. In 1999, he himself was "headhunted" for a job in the executive search sector and has never looked back.

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh speak with Rod Adkins, board chairman, former IBM executive, and author of Curiosity Redefines the Limits. Rod shares insights from nearly 25 years of board experience, focusing on how directors can effectively oversee risk in an era of rapid technological disruption.

The conversation explores how boards are evolving their governance structures to address increasingly complex risks tied to technology, cybersecurity, and artificial intelligence.

Rod explains why traditional audit committees are often no longer sufficient on their own and, as a result, many organizations are forming dedicated risk and technology committees to better manage forward-looking challenges.

A major focus of the discussion is AI as a transformative opportunity and a significant threat. Rod frames the present day as a new innovation cycle, emphasizing that boards must strike a careful balance between leveraging AI for competitive advantage and defending against AI-enabled risks.

Key Takeaways

Governance must always adapt to technology and rises
- Boards are moving beyond audit committees toward dedicated risk oversight teams to better address cybersecurity, infrastructure and innovation.
- Effective governance requires a forward mindset and close alignment with management on navigating change
- AI requires a balance of opportunity and protection
- AI can drive efficiency, innovation, and competitive advantage, but also introduces risks like cyber threats and trust challenges
- Boards must ensure organizations are both leveraging AI and protecting against its misuse
- "AI vs. AI"
- As threats become more sophisticated, companies must use AI-powered defenses to protect systems and data
- Maintaining trust and security will be a core board-level responsibility
- Curiosity drives better leadership
- The best directors ask thoughtful, strategic questions, curiosity helps leaders anticipate change, challenge assumptions, and improve decision-making

Quotes

"We're just at the beginning, and we're almost out of breath already in terms of how fast [AI] is moving and how much we see in terms of capabilities and disruption."
"People that adapt to unknown situations and who productively challenge the status quo, have a curiosity or a competitive advantage for them in life and in their careers"
"You don't always have to have the answer, but you need to figure out how to ask the right set of questions."

Links

https://rodneyadkins.com/book/

Curiosity Redefines the Limits: Advantages Gained from Life, the Workplace, and the Boardroom

Forbes articles

Guest Bio

Rodney Adkins (Rod) has been Chairman of Avnet, Inc., one of the world's largest distributors of electronic components and technology solutions, since 2018. He is also the author of Curiosity Redefines the Limits, a leadership book that explores how curiosity can serve as a powerful competitive advantage in driving innovation, leadership effectiveness, and career growth.

In addition, he is a Partner at 3RAM Group LLC, a privately held company specializing in capital investments, business consulting, and property management. Previously, Mr. Adkins was Senior Vice President of IBM, serving in that position from 2007 until 2014. Over his 33-year career with IBM, Mr. Adkins has held several operational and executive management roles spanning strategy, technology, systems, and supply chain.

Mr. Adkins' work has spanned the world of technology and computing. He has been a leading innovator in solutions ranging from mobile devices to the world's largest supercomputers. His significant contributions include helping to advance the Personal Computer industry, leading IBM's POWER business to become the market leader in the UNIX market, and pioneering what became IBM's portfolio of Internet of Things (IoT) solutions.

Mr. Adkins was inducted into the National Academy of Engineering (NAE) in 2005, one of the highest honors in the engineering profession. His life story is archived in Wikipedia and The History Makers. He was inducted into the Miami Jackson High School Hall of Fame in 2018, the Miami Dade County Public Schools Alumni Hall of Fame in 2022, and the Georgia Tech Engineering Hall of Fame in 2024. The Wall Street Journal named Mr. Adkins among the top 100 most influential and effective corporate directors in 2025. He has been awarded honorary doctoral degrees from Georgia Tech and the University of Maryland Baltimore County (UMBC).

Mr. Adkins serves on the board of directors for United Parcel Service (UPS), WW Grainger, and Avnet. He is a member of the Executive Leadership Council (ELC) and a trustee of the Georgia Institute of Technology (Georgia Tech) and Rollins College. Mr. Adkins also serves on the Adrienne Arsht Center Trust Board, the Overtown Youth Center (OYC) Board, and the Community-Police Relations Foundation Board.

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh speak with Tina Larsson, a former Wall Street analyst, co-founder of The Folsom Group, and author of Living The High Life. Tina works with co-op, condo, and other HOA boards to improve governance to reduce costs, manage major building projects and oversee their shared residence effectively.

Tina shares how she and her husband became involved in board governance after discovering that their New York City co-op board was poorly managed and incurring significant unnecessary expenses. After organizing their co-op neighbors and electing a new board majority, they introduced stronger governance practices to their board and saved their building substantial money in very short order.

The conversation explores the governance challenges faced by residential boards, which are usually run by volunteers responsible for complex decisions. Tina shares how boards can improve oversight, manage projects more effectively and shift from reactive decision-making to a more proactive approach to governing their communities.

Key takeaways

Residential boards face complex governance responsibilities
Volunteer board members are responsible for major operational decisions involving buildings, infrastructure, vendors, and regulation
Many board members take on these responsibilities without formal training or governance guidance
Financial oversight can reveal significant opportunities for savings
Benchmarking operating expenses against comparable buildings can uncover areas of overspending
Strategic vendor negotiations and cost reviews can reduce operating expenses by 5–10% in many buildings
Effective governance requires proactive decision-making
Boards that operate reactively often wait until problems become emergencies before acting
Long-term planning helps communities address repairs, projects and maintenance before they become crises
Establish clear roles and leveraging community engagement
Governance improves when boards focus on oversight and strategy rather than trying to manage every operational detail
Residents who want change must often participate directly by joining the board
Building relationships with neighbors and encouraging qualified owners to run for board positions improves decision-making
"Living the High Life"
Tina's book is a guide and blueprint on how to get involved in the governance of your co-op, and condos or HOA board and how to be an effective board member

Quotes

" The only way that you can get a say in your community is by running for the board and it talks about skills; good skills, best skills, the elevator skills, and what you are passionate about."

"[An HOA, co-op, or condo board] is acting as a miniature government. They are governing the community."

"If you are on the board of a residential building… you have to try to manage being on the board and at the same time, you have to handle all shareholders' or owners' concerns."

" The only effective way to have a say in your living community is by being on the board."

Links

The Folson Group

Living the High Life: How Smart Co-op and Condo Owners Protect Themselves and Their Investment

Guest Bio

Tina Larsson and her husband helped her own co-op save substantial money through good governance, after which they formed The Folson Group. They support NYC co-op and condo boards with strategic advice, project management, cost reduction, and help them find a property manager that fits their needs. She is the author of Living the High Life, frequent podcast guest and speaker, and holds a LEED Green Associate designation. Tina is on a mission to educate and support NYC condo and co-op boards to help optimize their living community.

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh welcome David Karofsky, a principal consultant with The Family Business Consulting Group and co-author of So, you're in the Family Business: A Guide to Sustainability.

David brings both professional expertise and personal experience to the discussion, having grown up in a multi-generational family business and later building a family business consulting practice alongside his father. Most recently, his son Adam has also joined David in his consulting practice.

He shares how family businesses operate at the unique intersection of family relationships and corporate governance, where emotional dynamics and business strategy often collide.

The conversation explores the evolving role of governance in family-owned companies, including how boards can help manage succession, create accountability, and ensure long-term sustainability across generations.

David also discusses why many family businesses resist formal governance structures and how independent board members can help families navigate complex decisions while maintaining healthy relationships.

Key Takeaways

Family businesses operate at the intersection of family and business
Each system has its own dynamics, and when combined they can create strong alignment and/or significant conflict.
Successful family businesses learn to balance emotional family relationships with professional business decision-making.
Understanding roles is critical to effective communication
Family members may simultaneously act as owners, executives or board members.
Recognizing which "hat" someone is wearing during a conversation helps keep discussions productive and focused.
Governance becomes more important as businesses move across generations
As ownership expands from founders to siblings and eventually cousins, decision-making becomes more complex.
Formal governance structures help maintain alignment and clarity as the number of stakeholders grows.
Independent boards can strengthen family businesses
Independent board members can provide strategic, objective perspectives and expertise that may not exist within the family.
A strong board supports management while also representing the interests of the family shareholders.
Communication is the foundation for long-term success
Families must be willing to have open and sometimes uncomfortable conversations about strategy, succession, and expectations.
Strong communication allows family businesses to navigate complexity and sustain the business across generations.

Quotes

"Ownership doesn't constitute a board seat. That goes back to 'what are the needs of the business' and let's make sure we have the right people in the room."

Regarding a family member serving on the board of a family-owned business: "You have to be able to be comfortable being uncomfortable."

"You've got to really find true independents that aren't going to be yes men or women to the CEO or chairman of the board."

Regarding the resistance to a board of directors: "The biggest opposition or fear that I have heard… is the fear of loss of control."

Links

The Family Business Consulting Group

Boards and Family Business: What Could Go Wrong?

Family Business Health check

Book - So, You're in the Family Business: A Guide to Sustainability

Guest bio

David Karofsky is a principal consultant with The Family Business Consulting Group, specializing in advising family businesses about the challenges and opportunities inherent to the family business. His client work is focused on building alignment around communication, executing the transition of ownership and leadership, conflict resolution, strategic planning, and forming governance structures for family businesses.

His interest in family business consulting began with his course work in family business dynamics at the Cambridge Center for Creative Enterprise. David's work helping corporate executives develop superior listening and communication skills was honed by his professional training in executive team building, strategic decision making, effective communication, managing people, matrix management, and performance enhancement.

Prior to working with FBCG, David worked in his own family business consulting practice with his father for eight years. The father-son team are the authors of So You're in the Family Business: A Guide to Sustainability. In addition, David was vice president of marketing for a software start-up where he helped launch the company and raise over $10 million in funding. David also worked at EMC Corporation for eight years holding various corporate roles including managing operations for worldwide marketing.

The recipient of multiple achievement awards, David has been a guest speaker internationally and is a mentor to current and former MBA students at Northeastern University's Graduate School of Business and serves on the Marketing Career Track Advisory Board. He is a founding member and former chair of the Boston chapter of the Young Presidents' Organization's Young Adult Forum, member of the Family Firm Institute where he holds certificates in Family Wealth and Advanced Family Business

Advising with Fellow status, member of the Board of Directors of the Rogers Foam Corporation and a former member of the Executive Board of Directors for the Men's Associates at Hebrew Senior Life.

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh speak with Babs Ryan, an innovation executive, board director, and AI strategist with experience spanning global technology, marketing, consumer products, and financial services.

Ryan discusses the evolving role of artificial intelligence in governance, the future of AI on boards of directors, and realistic scenarios for AI adoption, in a discussion about the possible ways AI can be integrated into boardrooms.

The episode also explores broader governance issues, including board refreshment and oversight responsibilities, and how AI could help surface blind spots in leadership decision-making.

Key takeaways

AI as an accelerator
Ryan believes that an AI entity on the board could be programmed to make decisions in the best interests of shareholders.
- AI would be able to look far beyond a typical human board members' scope of knowledge and realm of experience.
- Organizations should focus on strategic and operational priorities with CEOs applying AI to those priorities, where it would be most effective.
AI is evolving in the boardroom but not enough to take a board seat, at least in the near future
Short term: Boards receive education on how to utilize AI as a tool to prepare for meetings, review minutes and retrieve information.
Mid-term: Focus on strategy and building confidence with AI and use it to challenge assumptions and help identify blind spots and risks.
- Trust in AI, like trust in new board members, must be earned over time through consistent, reliable contributions.
- Legal, regulatory, and cultural readiness will ultimately determine how far AI can go, and when, in serving formal governance roles
Exposing governance weaknesses
- Concerns about AI exposing bias or underperformance point to broader challenges around board evaluation and refreshment.
- AI adoption in the boardroom may accelerate necessary conversations about board member accountability, succession, and governance discipline.
- Strong boards with high-performing directors are more likely to welcome AI-enabled scrutiny.

Quotes

" AI is not a strategy and it's not a product. It's an accelerator, something that helps you do something else better, faster, higher quality."

"People should stop looking for the 'use case' for AI and focus on their current strategic and operational priorities and then apply AI where it makes sense."

"An AI entity on the board… can be programmed to actually give decisions or answers in the best interest of the shareholders, which people don't always do."

Links

The Board Selection Short List: Will It Be You or AI?

Board Search Secrets

Guest Bio

Babs Ryan was chief innovation officer of GE Capital's largest division where one of her many patents generated $800M in incremental revenue. A dual US/UK citizen, she has been onsite in 97 countries. She was a director and audit committee member of Workers Federal Credit Union with $2.6B in assets, overseeing M&A negotiations and CEO succession.

She is strategic advisor for Kintera AI, offering no code back-office processing/reconciliation and regulatory violation remediation for banks; board director and investment committee member at MarTech Main Street, Inc., a private multigenerational family business; and an advisory board director at Aviva Labs, a global beauty/aesthetics manufacturer and distributor.

Babs has also served as CEO of a marketing agency acquired by WPP, SVP of innovation at Capgemini's product design division (AI, digital twins, biosensors, MedTech, robotics), Agile principal at Thoughtworks, and GVP digital transformation at Publicis Sapient.

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh welcome Gary Evee, cybersecurity leader and founder and CEO of Aprivé. His company is pioneering a concierge approach to cybersecurity protection, providing services that protect high-value individuals and families from the digital threat landscape.

Drawing on more than 25 years of experience across IBM, cybersecurity leadership, and board service, Gary explains how breaches increasingly originate through individuals rather than systems.

He highlights how personal devices, home networks, and online data exposure create vulnerabilities for executives and board members, and why cybersecurity must extend beyond the corporate perimeter He currently serves as the board director of Aware Inc. and is a trustee of Dedham Savings Bank.

Key takeaways

People are the primary cybersecurity risk
- Most breaches target individuals and start in simple ways with phishing emails, password reuse, or compromised personal devices.
- In cybersecurity, people are the weakest links and organizations often lack in providing continued digital protection for executives once they step outside the company's firewalls
- Home networks and personal accounts often lack even basic security controls and so cybersecurity is a risk for anyone that works remotely, travels, or brings their work home from the organization. It can even impact your family.
Aprivé: Personal and enterprise-grade cybersecurity
- The company offers a white-glove services that protect individuals, their home network, devices and digital footprint
- Aprivé is unlike other cybersecurity companies and proactively helps people get the protection they need in places outside of the enterprise
- Aprivé's services cover six pillars
  - Password and credential security
  - Home network hardening
  - Mobile and personal device security
  - Online identity and digital footprint management
  - Financial and account monitoring
  - 24/7 concierge support and incident response
  - Boards and executives are high-value targets with outsized exposure
    - Even the best board portals don't flag when a non-authorized user logs in with stolen credentials taken from a phishing malware or compromised device
    - When an attacker gets access, they can gather information that could lead to reputational damage
    - Aprivé's services ensure everyone within the enterprise is protected, assessing the vulnerability of each individual — especially the C-suite
    - The company also serves high profile and public figures

Quotes

"People continue to remain the weakest link."

" What we found was [people-C-suite leaders and High-value individuals] oftentimes have no one thinking about protecting them once they left the organization."

"Even the best board portals assume that the person that's logging on is legitimate."

"If I steal your credentials through a phishing malware, a compromised personal device, the system doesn't see me as an attacker, it sees me as a trusted user."

Links

Aprive

Guest Bio

Gary Evee is a visionary entrepreneur, investor, and cybersecurity leader dedicated to redefining how the world's most influential people safeguard their digital lives.

As the founder and CEO of Aprivé, he is pioneering the next frontier of personal cybersecurity, Executive & Lifestyle Defense, a model that blends technology, concierge service, and intelligence to protect executives, high-net-worth individuals, and families from the evolving digital threat landscape.

With more than 25 years of experience spanning technology, cybersecurity, and business transformation, Gary is known for his rare ability to bridge innovation and trust. Before founding Aprivé, he served as an executive leader in IBM's Cybersecurity Business Unit, helping Fortune 500 CEO's and global enterprises navigate emerging threats while scaling IBM's security portfolio worldwide. In addition to his work with Aprivé, Gary founded Evee Security Consulting Group, advising corporations and public institutions on cyber risk management, identity protection, and incident response. He also founded CyberTrust Massachusetts, a pioneering public-private initiative that develops the next generation of cybersecurity professionals through education, workforce development, and real-work defense programs.

Gary erves as a Board Director at Ware Inc. (NASDAW: AWRE), a leading biometrics and identity authentication company, and as a Trustee of Dedham Savings Bank and Charlesbridge Bank. He is also a Visiting Fellow at the National Security Institute at George Mason University, contributing to national discussions on cybersecurity, policy, and technology innovation.

A sought-after speaker and thought leader, Gary regularly shares insights on executive risk, digital identity, and the future of cybersecurity, empowering leaders to safeguard what matters most in an increasingly complex digital world.

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh welcome Jon Weber, founder of the Jon F. Weber advisory firm and an experienced board leader in operationally intensive, post-restructured companies. Jon has served on over 50 boards.

Drawing on more than 20 years of experience at institutional investors, including Icahn Enterprises, Goldman Sachs, and Elliott Investment Management, Jon shares what distinguishes a board that genuinely drives change.

The conversation explores how boards are rebuilt following restructurings, why these roles demand significantly more engagement than traditional boards, and how disciplined board composition, leadership, and governance practices can unlock value.

Jon also discusses lessons learned from distressed situations, the importance of strong board chairs, and why many boards fall short of their potential.

Additional Resources

For Jon's articles, podcasts, and webinars on governance and other restructuring-related topics, see https://jonfweber.com/thought-leadership.

Key takeaways

Early beginnings with operationally intensive investments
- Throughout his career, Jon had worked for institutional investors who invest in undervalued troubled companies — companies facing challenges relating to talent, strategy, technology, or operational issues.
- Over the years, Jon has become experienced in overseeing businesses that need very actively engaged boards.
- Post-restructured boards
- When a company is restructured, it has new stakeholders, owners, and boards of directors.
- These boards must be built from scratch, with clear governance structures, committee charters, onboarding processes, and an expectation of deep engagement.
- Jon characterizes these boards as at least "50% more difficult" than traditional boards. Members of post-restructured boards must be willing to accept the challenge to be deeply involved and do the work necessary to make an impact.
- Board composition should start with a scorecard
- Jon likens effective board building to acting as a "casting director." To effectively create a post-restructured board, one has to study the business, learn the industry and its history, and have a clear, deep understanding of the company.
- Before candidate interviews, a scorecard with explicit criteria and consensus on what will lead to a high performing board is created to assure that recruiting priorities are clear.
- Strong board leadership is necessary
- - The board chair must have board experience and preferably board leadership experience.
  - The chair must actively manage the board, set expectations for preparation and behavior, facilitate constructive dialogue, and provide regular, direct feedback to the CEO. Without this strong leadership, these boards tend to drift or defer to management.
- Focus forward, not backward
- - Jon emphasizes that effective boards minimize time spent rehashing historical results and instead prioritize decision-making, problem-solving, and future-oriented discussions.
  - Preparation before meetings, including sharing questions in advance, enables board time to be used for meaningful conversation rather than passive presentation.

Quotes

"Because it's a new board, it's not tethered to the legacy of the past."
"We're not looking for clones of ourselves or people that bring a mirror image of our own beliefs, but rather constructive disagreement at times around particular knowledge of the business."
" Investors are human, too, they have biases…the bias that investors have is they prefer candidates who tend to agree with their investment thesis and who have a frame of reference that is consistent with theirs."
"A board that doesn't have a leader ends up being led by management—and that's not good governance."

Links

www.jonfweber.com

Guest Bio

Jon leads an advisory firm that serves investors in operationally intensive investments. Previously, he created and led operating partner groups for over 20 years at institutional investors, including Goldman Sachs, Icahn Enterprises, and Elliott Investment Management. He has impacted dozens of portfolio companies across a broad range of industries through operational engagement, talent management, and effective oversight, in partnership with management, driving change as a board member, senior executive, and board-level advisor in the Americas and Europe.

His roles have included President of Icahn Enterprises, L.P. (NYSE-IEP), CEO of Philip Services Corporation, WestPoint Home, and Viskase, and board member of Aligned Energy, American Railcar Industries, Crescent Communities, Martinrea Honsel, National Energy Group, PLH Group, Promises Behavioral Health, WIND Hellas, Windstream, Xenith Bankshares, and XO Communications.

Earlier in his career, Mr. Weber was an investment banker at Morgan Stanley and JPMorgan and a corporate lawyer at Weil. He is a Life Member of the Council on Foreign Relations. Jon earned a J.D., cum laude, from Harvard Law School, and B.S. and M.B.A., magna cum laude from Babson College

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In this episode, Joe and Raza speak with Firas Raouf, co-founder and general partner at Companyon Ventures, a Boston-based VC firm specializing in early-stage B2B software and AI startups.

Firas shares insights from 25 years as a founder, operator, and venture investor—helping companies transition from founder-led sales to scalable, operationally disciplined organizations. The conversation focuses on how early-stage founders should think about creating their first board, the mistakes to avoid, and why great board dynamics depend heavily on execution.

Key takeaways

Career beginnings
25 years ago, Firas co-founded three startups — two were during the dot-com era and one that became VC-funded, giving him firsthand experience sitting on the receiving end of board advice and investor expectations.
Then, Firas was invited to join OpenView while working at Insight Venture Partners and was able to spend 10 years seeing OpenView and its portfolio companies grow.
Later he co-founded Companyon Ventures
How Companyon Ventures supports the expansion stage investing
After early product-market fit, companies hit the "now we need to scale" moment.
Companyon Ventures specializes in this transition, helping founders build their first leadership team ,operational discipline, KPIs and dashboards scalable go-to-market engines a plan for capital needs
Early-stage boards are about support
Firas emphasizes that early boards are not oversight bodies like public-company boards. Their purpose is to surround the founder with people who can help them think strategically, navigate challenges, and build a scalable company.
A board can include a seat for common shareholders, lead investors and an independent board member, who is someone with whom the CEO is comfortable.
Since lead investors can become a long-term board member, Founders must evaluate who they are letting in, not only the valuation. Once someone is on the board, they're not easy to remove.
Boards must evolve as the company evolves
As companies grow, the expertise they need changes. Firas suggests cycling out board members after two years.
After 18–24 months, it's common for a board member's value to plateau, making board refreshes, new independent directors, or role rotations both healthy and necessary.

Quotes

"A happy board tends to reflect great execution. An unhappy board tends to reflect poor execution."
"I do think that you should keep things fresh, so to speak, and so any board member really that has been there more than two years, it's rare that you haven't picked their brain dry."
"It's not just about valuation, it's also about who you're going to let into your company, into your house, because once you let them in, you can't get rid of them."
"The board of directors for an early-stage startup is the opportunity to have a number of people around the table that can help you navigate and scale your company."

Links

Companyon Ventures- Boardroom Confidential

Guest Bio

Firas Raouf is the co-founder and general partner of Companyon Ventures, a Boston-based VC firm that invests in early-stage B2B software and AI startups. Before launching Companyon, Firas was part of the founding team at OpenView Venture Partners, where he helped pioneer the "expansion stage" investment model and partnered with dozens of software founders to scale their go-to-market operations. Today, he focuses on helping founders transition from founder-led sales to scalable growth by building leadership teams, operational discipline, and repeatable GTM engines. Firas is known for his hands-on, operator-turned-investor approach and his passion for guiding first-time founders through the challenges of building high-growth software companies.

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh speak with Dr. Linda McGoldrick, an international board director, strategy leader, and policy expert in healthcare and life sciences.

With 30 years of global experience across the U.S., U.K., and European boards, Linda shares what defines high-performing boards, the importance of trust and diversity of thought, and how geopolitical and technological shifts are transforming governance today.

Key takeaways

Traits of high performing boards
Regardless of size or geography, effective boards are well-prepared, prioritize meaningful discussion over reporting, and cultivate trust and mutual respect.
High performing boards all display strong relationships, open communication, and diversity of thought among board members.
Linda added that values, camaraderie and trust are intangible aspects that are important aspects of a successful board.
Boards in the U.S. vs the rest of the world
Linda observed that even in non-English speaking countries, English serves as the universal language for board communications - a reflection of its role as the global language of business
Boards outside the U.S. place greater emphasis on courtesy, respect, and a thoughtful pace of discussion, reflecting multicultural membership and diverse business contexts.
Historically, many U.S. boards were more domestically focused, but Linda sees this shifting as companies expand internationally. Directors today are expected to understand global markets, geopolitical dynamics, and comparative business environments.
Expansion of risk oversight
Today's boards must monitor not only financial and operational risks but also a host of geopolitical, regulatory, and other related challenges.
Artificial intelligence impact on boards
The use of AI has implications of security, benefits, risk and investment as the technology continues to expand and have impacts on economies and society.
Boards have the responsibility to oversee the implications for organizational strategy and risk management.
Linda views AI as a valuable efficiency tool, such as bots that summarize materials but stresses that human judgment, discretion, and ethics must remain central to board decision-making.

Quotes

"I don't want to see myself around the table. I want to see a diversity of experience. We all bring certain talents which feed into the most rigorous and robust discussions around board process."

"AI is a global race… I think the human element of discretion and insight is critical to know the line of technical and bot-expertly-fed conversations versus human thoughtful conversations in dialogue.

Guest Bio

Dr. Linda McGoldrick is an international board director and healthcare and life sciences leader with more than 30 years of global executive and governance experience. She serves on the boards of SmileyLife Holding, Alvotech, where she chairs the Audit Committee, and Compass Pathways, and is the Founder and CEO of Financial Health Associates International.

Linda has held senior roles across the U.S. and Europe, including leadership positions at Marsh's Healthcare & Life Sciences practice, Kaiser Permanente's European operations, and Veos plc. She has also served as CEO of the International Diabetes Federation and the Drug Information Association.

A dual U.S.–U.K. citizen, Linda brings deep expertise in global strategy, regulatory environments, and board governance across public, private, and nonprofit organizations.

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh speak with John Rose, an international marketing executive, entrepreneur, and board advisor who has led businesses across the U.S., Europe, Latin America, and the Middle East.

John discusses his global career—from founding the first ad agency in Russia to relocating his company to Dubai and his recent research project, "The Boardroom Blindspot," a global survey exploring why marketing expertise is underrepresented on boards.

He also shares insights from his work with the Virtual Advisory Board and Board Brothers, highlighting the impact that advisory boards are having on governance. John has served as a board member and advisor for several companies, including Atypical Digital, WLB, Cow Level and Harvard Alumni Entrepreneurs.

Key takeaways

1.A global career defined by reinvention

- John began his career in Boston media and advertising before co-founding the first Western ad agency in what was at the time the Soviet Union. As global markets shifted, he built a thriving international business across Eastern Europe.
- When the war broke out with Ukraine, he and his team quickly relocated from Russia to Dubai, rebuilding their agency from the ground up and now represents Dubai's tourism in a number of countries.
Dubai's culture of openness and innovation
- John described Dubai as "the city of the future," efficient, safe, and globally connected, with a government and business culture that actively supports growth.
- Dubai offered a welcoming and dynamic environment for rebuilding. With 90% or more of residents coming from abroad, the city fosters a strong sense of belonging and entrepreneurial energy.
The Boardroom Blind Spot
- John's research survey, conducted with the Virtual Advisory Board*, revealed that fewer than 14% of boards surveyed include directors with marketing expertise. The survey included 416 board members and executives across 46 countries.
- Results showed that 60% of respondents believe that marketing perspective would add value, but only 11% have addressed the gap.
- John asserts that boards are still dominated by finance and legal expertise but largely excludes marketing expertise which brings a customer-centric lens essential for growth, purpose, and communication in a rapidly changing world.
Preparing marketers to serve effectively on boards
- John believes marketing professionals must take some of the responsibility for closing the gap by learning to "speak board"-connecting creative and customer insights to business outcomes, governance, and shareholder value.
- Strategic marketers, especially CMOs and Chief Growth Officers, can bridge this divide by pursuing board education and gaining experience through nonprofit and/or smaller boards.

Quotes

"86% of companies don't have any marketing expertise on their boards - that's pretty significant."
"I think we (marketing) are the interpreters. I think we're the people who help cross the gap between what the marketplace wants and desires and what the company can deliver."

Links

The Boardroom Blindspot

Guest Bio

John Rose is an accomplished senior executive, entrepreneur, investor, board member, and creative director with over 30 years of experience leading marketing and media businesses across the U.S., Europe, Latin America, and the Middle East. He is a founding member of the Virtual Advisory Board,

co-founder of Board Brothers, and a frequent speaker on global governance and marketing leadership. John's expertise spans brand strategy, international expansion, and board governance, with a special focus on helping companies bridge marketing insight with corporate purpose and growth. He currently resides in Dubai, where he continues to advise boards and global organizations on marketing strategy and board composition.

* The Virtual Advisory Board (VAB) is a virtual and global platform which connects its members and helps them navigate the global board of directors and advisory board ecosystems.

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh welcome Jim Brown, co-founder of OrgHealth and author of the global bestseller "The Imperfect Board Member."

With 30 years of experience advising boards and CEOs, Jim shares how embracing imperfection leads to stronger leadership, healthier organizations, and better board performance. He dives into the evolution of governance over the last two decades and the cultural challenges boards face today.

Jim also previews his forthcoming book arriving in 2026, "The Imperfect CEO," set 20 years after his first book. The sequel explores the current reality that company leaders face through changes in leadership expectations and workplace culture.

Key takeaways

1.OrgHealth's mission

- Jim explains that organization health is a focus on culture, the relationship between board members, how they communicate with each other and how they talk about their CEO and management team
- Companies that seek OrgHealth's consultations need to have a leader who recognizes that they will be making most of the changes and acknowledges that improvements need to be made.
"The Imperfect Board Member" philosophy
- The book tells a fictional story of a frustrated CEO who discovers that in order to make effective change on his board, it begins with self-awareness. Along his journey he discovers "The Seven Disciplines of Governance Excellence: direct, protect, connect, expect, respect, reflect, and select.
- The key insight from the story is that lasting board transformation requires both individual and collective growth.
Challenges adjusting to changes in culture
- Jim's upcoming book, "The Imperfect CEO," revisits the same protagonist 20 years later as he confronts a new reality of generational and cultural shifts within companies.
- The issue that company leaders face is being stuck in the mindset that because something worked before, it should still work. But with younger generations entering the company, outdated expectations receive pushback.
The ideal board chair
- A great board chair leads with an attitude toward service, not authority. Their role is to draw out the best from every member, ensure effective discussion, and maintain focus without dominating the conversation.
Term limits, a solution to offboarding challenges
- Jim suggests that rather than making offboarding personal through performance feedback, make it a mechanical process. Term limits also encourage boards to develop the skill and culture to bring in new members and help them learn about the company.

Quotes

" Culture has become the undercurrent of every organization's reality. And if you don't recognize it, you're going to be blindsided by it."
" My observation and my personal experience that the way we led as leaders 20 years ago that worked for us, doesn't work today."
" I think it would just be much more healthy if we let boards be boards of directors where more of their energy is on the direction piece rather than the protection piece."
" Have enough time for people to learn the job, the organization, and really add value, but not so much time that they become stale."

Links

OrgHealth

The Imperfect Board Member

Guest Bio

Jim Brown is an author, speaker, and board governance advisor with over 30 years of experience helping boards and CEOs build healthier organizations.

He co-founded OrgHealth in 1995, a consulting firm dedicated to improving board and leadership performance through culture, clarity, and accountability. His book, "The Imperfect Board Member" (2006), became an international bestseller.

He currently serves on several boards, including Vanquish Hockey, Amgine Technologies, and previously served on boards for The Global Leadership Network and SigmaDek. His upcoming book, "The Imperfect CEO" (2026), explores how leadership and workplace culture continue to evolve in today's rapidly changing environment.

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh welcome Jamie Green, co-founder and CEO of Tutaki, an AI-powered workbench designed to make board directors significantly more effective.

Drawing from his background in consulting at McKinsey, Green created a technological solution to solve a widespread challenge in board rooms across the U.S. and abroad: information overload and limited time to prepare. Tutaki is an AI system that acts as an expert co-pilot to help directors surface context, identify risk and deliver impact.

Jamie also shares how AI is reshaping governance, what it means for liability and independence, and where the future of boardrooms may be headed.

Key takeaways

Problems with board overload
During his time as a consultant at McKinsey, Jamie would deliver 300-page strategy decks to board members 48 hours before a meeting
Directors would arrive unprepared, leading to conservations about updates and recaps rather than strategic discussions. The lack of preparation risked slow decision making and stifles innovation.
New Zealand boardrooms
Jamie, based in New Zealand, said board practices in his home country are similar to the U.S. but New Zealand directors tend to have a wider board portfolio — some are on as many as 8 boards.
New Zealand has shifted to increase liability for board directors to hold them accountable for reading all board materials. If the business is impacted by the lack of action by a director, they can be criminally liable.
Practical pain points that led to Tutaki
Information overload: directors are expected to digest hundreds of pages, news articles, and compliance documents across multiple boards.
Contextual awareness: recalling what was decided three months ago or tracking delays in projects across several meetings often requires wading through thousands of pages.
Portfolio management: professional directors often sit on 5–8 boards, making it difficult to organize materials, track follow-ups, and maintain oversight across them all.
AI as a co-pilot, not a replacement
Tutaki is used to aid directors with meeting preparation by analysing board materials, delivering internal information, relevant news reports, competitor updates and deep dive reports.
While Tutaki might suggest functions by providing certain information, Green said that the AI serves as a tool and the person using it is still liable
The AI tool is meant to help directors spend more time doing critical thinking and being effective in meetings by being prepared with the context of the material.

Quotes

“We help you do the thinking, but the thinking is still yours, and ultimately that’s the end game.”
“I think the power of all this stuff is getting you the context in the way that's meaningful as opposed to just dumping hundreds of pages of information that you have to sift through.”
“If you had an AI tool listening to every conversation you had, every email, every document for the last three years on this board, I guarantee it would be a pretty damn good director.”

Links

Tutaki

Guest Bio

Jamie Green is the co-founder and CEO of Tutaki, an AI-powered workbench designed to make board directors radically more effective. Drawing on his background in strategy consulting at McKinsey and hundreds of conversations with chairs and directors, Jamie built Tutaki to solve one of the boardroom’s biggest challenges: staying on top of exploding information, tightening compliance requirements, and limited time to prepare. Today, directors from over 100 organisations across APAC, North America, and the UK use Tutaki to transform how they prepare, engage, and make decisions.

Jamie is pioneering a new model of “augmented directorship,” where AI acts as an expert co-pilot to help directors surface context, identify risk, and deliver 10x impact. With experience across governance, AI product design, and startup leadership, Jamie is at the forefront of the movement to reshape how boards operate in a world defined by complexity, liability, and technological change.

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In this episode of On Boards, Dr. Keith Dorsey an executive coach, author, active board member, and expert in leadership development and corporate governance. joins hosts Joe Ayoub and Raza Shaikh

His book, The Boardroom Journey: Practical Guidance for Women to Secure a Seat at the Table, provides insights and strategies for women aspiring to become board members.

Keith holds a doctorate in Organizational Change and Leadership from the University of Southern California and serves on multiple boards including Vimly Benefit Solutions, Pacific Crest Trail Association and Pepperdine University’s Graziadio Business School. He discusses his research-based concept of “optimal diversity,” which couples demographic diversity and diversity of thought.

His work has been widely published including the Harvard Business Review, MIT Sloan Management, Forbes and Fast Company.

Key takeaways

1.Keith’s life in 3 chapters

Keith started his career in the U.S. military and the Air Force, followed by nearly 30 years working in corporate America. In 2019, he went back to school to get a doctorate in organizational change in leadership from the University of Southern California. Now, he serves as an executive advisor to lead corporate leaders to optimize boardroom practices.
What is optimal diversity?
While getting his doctorate, Keith started to research the lack of gender and ethnic diversity on corporate boards.
He discovered the concept of “optimal diversity” - the combination of observable diversity and/or demographic diversity along with diversity of thought. This idea encourages people to reflect beyond their observable traits and dive deeper into how their lived experiences and perspectives can contribute to diversity.
Pre-vetting: It’s about who knows you, not who you know
Keith found through his studies that executives who serve on boards, were very often seated through their network. When it comes time to recruit another board member the question that is often asked is: “who do we know.”
When it comes to joining a corporate board, it’s about who knows you and understands your experience and skills. In addition to giving your “autopilot intro” while networking, he encourages aspiring board members to take a few extra seconds to go beyond the details of your day-to-day job and tell them what you’re looking to do.
Five different “capitals”
Keith’s book dedicates a chapter to each type of capital: human, social, cultural, director, and commitment.
During his research, Keith found that women often take the approach of presenting themselves as exceptional executives but not as exemplary board members. He encourages people to optimize their human capital. During board interviews, exhibit the type of behavior that they would want to see in the boardroom.

Quotes

” Optimal” diversity forces people to really reflect and to think about the things that make who they beyond just their observable demographic traits, including their lived experiences.

“It’s best to look out the front windshield and be able to say what's beyond that S-curve and that sharp right curve ahead by asking thought provoking questions based on your human capital…instead of looking through the rear-view mirror and shouting your praises.”

“ Figure out who you are and what your superpowers and secret sauce actually are and then incorporate that in a way of getting your name out there so more people know you than you know”

Links

https://www.boardroomjourney.com/

The Boardroom Journey: Practical Guidance for Women to Secure a Seat at the Table

How Board Sourcing Approaches Contribute To The Corporate Diversity Problem—And What To Do About It

Guest Bio

Dr. Keith D. Dorsey is a researcher, author, advisor, and active board member focused on issues of diversity, governance, and strategic growth for private and public corporate boards. His recent research examined women executives' pathways to securing corporate board seats, yielding powerful insights about the barriers and facilitators unique to women candidates seeking these positions. His book, The Boardroom Journey: Practical Guidance for Women to Secure a Seat at the Table, combines his research insights with his extensive executive, board, and industry experience. He speaks on topics related to governance and navigating the path to the C suite and boardroom. As an executive advisor, he is focused on increasing Optimal DiversityTM within corporate senior management, executive, and board-level roles.

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaik welcome Suzanne Brown, Director of New York Stock Exchange Board Services. She shares her unique career journey from law and the nonprofit world to board placement leadership at the New York Stock Exchange.

Suzanne unpacks how NYSE Board Services was created to bridge the gap between talented board-ready individuals and the NYSE companies that need them. Suzanne also explains their unique “CEO-vetted” approach, the powerful influence of the NYSE brand, and the structural components that make their board placement program effective and trusted.

Suzanne leads an extensive network of over 1,000 CEO-vetted candidates. The service averages 2 board searches a week for NYSE listed companies and since 2019 has helped place 50+ professionals on corporate boards.

Key takeaways

NYSE Board Services background
NYSE Board Services was created in response to an obvious but under-addressed problem: many qualified candidates were being overlooked for board roles due to lack of network access, not lack of ability. The service is free for NYSE listed companies.
Every candidate that enters the NYSE Board Services network has been vetted by the CEO of a listed company, who personally nominated them. The Board Exchange connects C-suite professionals with board opportunities, focusing on readiness, visibility, and long-term support.
The program is made of 3 C’s: Council, Candidates and Companies. The council is made up of a group of 24 prominent NYSE CEOs, the program has over 1,100 candidates and there are 2,400 companies with which the NYSE has built longstanding relationships.
Education is core to board readiness
Suzanne explains that many of the candidates are first time board members. The NYSE Board Services team personally onboards each candidate and helps them prepare their profile and present their background, skill set and industry focus.
Candidates are also offered education through webinars and panels on topics such as global trends, governance, board culture, etc. All services are free of charge.
Board tenure is rising, CEO tenure is shrinking
The average tenure for a board member has increased from 8 to 10 years and continues to increase while the turnover rate for CEOs has gone down to 4.8 years as of last year, the lowest ever.
The board holds the continuity, but Suzanne encourages startup and pre-IPO companies to proactively set board term limits and retirement ages. This removes the need for awkward conversations years later and helps institutionalize clear expectations for rotation and rejuvenation.
Future of NYSE Board Services
Suzanne’s vision for the program is that every nom/gov of an NYSE-listed company will reach out to NYSE Board Services to refresh their board because the service is high-quality, high touch and successful.

Quotes

“Our defining feature, our secret sauce, is that any candidate in our network has to be CEO vetted, and that means that a CEO of a listed company just has to personally vouch and stand for that person.”

“We're a trusted resource. It's a natural extension for listed companies to look to us.”

“Part of what we do is make sure that our candidates… are aware of trends and understand what it's like to be in the boardroom, which is a unique culture.”

Links

nyse.com/board-services

Guest Bio

Suzanne Brown is the Director of NYSE Board Services, an exclusive resource dedicated to connecting highly qualified board candidates with NYSE-listed companies. She partners closely with CEOs and Board Directors to enhance governance practices and strengthen board leadership.

Suzanne leads an extensive network of over 1,000 CEO-vetted candidates, facilitating strategic matches between talented individuals and companies in need of fresh board perspectives. Since 2019, NYSE Board Services has successfully placed 50+ professionals on corporate boards.

A Phi Beta Kappa graduate, Suzanne, earned a B.A. in History from the University of Vermont and a J.D. from Cornell Law School

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh welcome Raffaela Rein, a seasoned entrepreneur and board member with expertise in frontier technology and innovation-driven leadership. Raffaela began her career as an analyst at BlackRock, and launched three companies for the world's largest incubator, Rocket Internet, across China, Australia, and Taiwan before becoming an entrepreneur.

She serves on multiple corporate and private equity-backed boards, including Porsche, Mutares and International University IU. As the founder of WildWildVentures and CareerFoundry, she has scaled startups to 120-plus employees and advised many venture-backed businesses. Raffaela serves as a board member for the German startup Verband, where she helps improve legislation for startups.

Raffaela was named one of Forbes top women in tech, and she is among Europe's most influential women in startups and venture capital. She has built a career at the forefront of business reinvention.

Raffaela discusses her entrepreneurial journey as founder of BoardLens a new AI tool she is developing and how it will transform the future of board meetings and excellence in board members.

Key Takeaways

Board effectiveness
Only 30% CEOs rate their boards as effective. With an expectation that board members come to meetings well prepared, Rein recognizes that board members are tasked with consuming hundreds, and often thousands, of pages of information in preparation for meetings. It is an almost impossible task to complete a thorough review especially if you are if you have a full time job.
In Germany, it’s common for board members to hire consultants or a ‘chief of staff’ that will help them with their board responsibilities. Raffaela is creating a tool that will serve a similar role for board members worldwide.
How BoardLens can transform board meetings
Raffaela anticipates launching BoardLens in mid-2025. It is an AI driven tool that is built to aid board members with meeting preparation, research, executive summaries, questions and risk analysis. It is meant to support board members while enabling members to fulfill their fiduciary duties and make a meaningful contribution in board meetings.
Raffaela likens BoardLens to hiring a personal Goldman Sachs analyst. It is trained with proprietary data and that will enable it to act, think and analyze like a board director.
Human edge is still crucial
While AI can process vast data and respond quickly, human directors can provide intuition, pattern recognition, and emotional intelligence—skills developed through lived experience that are essential in nuanced decision-making.
As technology advances, AI is bound to replace some human roles but to maintain the balance between AI and humans, Rein suggests thinking about how people are able to provide a unique and individual perspective to issues on a board’s agenda.
Privacy and confidentiality concerns
Uploading board packets into non-enterprise AI tools can be a confidentiality risk. BoardLens, however, will be trained to only read one organization’s board materials and will not cross share data. Rein explains that the company's IT department will be able to access the software’s security suite.

Quotes

”Here in Germany we have this system that you can get a consultant or chief of staff who actually helps you, not just with your preparation, but also with thinking things through deeply, doing deep market research, basically doing weeks and weeks of work to help you prepare for a board meeting.”

“I don't like the word 'Copilot' for BoardLens because it feels too passive. I like the word “analyst” because if you think of a Goldman analyst, they will do their best to really make you shine and to prepare you, so you should think of it as an analyst that fights for you.”

”The breadth of expertise and the breadth of knowhow you need to have and need to gain very rapidly as a director these days is significant and has accelerated dramatically in the last five years.”

Links raffaelarein.com

https://boardlens.ai/

https://www.pwc.com/us/en/services/governance-insights-center/library/board- effectiveness-and-performance-improvement.html

Raffaela Rein Bio

Raffaela Rein is a seasoned entrepreneur and board member with expertise in frontier technologies and innovation-driven leadership.

She serves on multiple corporate and private equity-backed boards, including Porsche, Mutares, and the International University IU.

As the founder of WildWildVentures and CareerFoundry, she has scaled startups to 120+ employees and advised venture-backed businesses.

Named one of Forbes’ Top Women in Tech, Capital’s 40 Under 40, and among Europe’s most influential women in startups and VC, Raffaela has built a career at the forefront of business reinvention and innovation driven leadership.

She began her career at BlackRock and launched three companies for Rocket Internet across China, Australia, and Taiwan before becoming an entrepreneur.

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh welcome Lynn Clarke, an experienced leader in family board governance who has served on more than a dozen family and private equity-backed boards including as an independent chair and lead director.

Lynn is also a strategic advisor and mentor and has served on boards spanning from beverage and food services to e-commerce and manufacturing. Lynn has mentored next generation board members and leaders throughout her career and was named the Private Company Director of the Year by National Association of Corporate Directors in 2022. She also serves as one of three judges for Deloitte’s best managed private company awards program.

Key Takeaways

Interviewing for a board role
With years of experience serving on boards, Lynn advises aspiring board members to carry a passion for the business, its products and what the company does. It’s important to understand why you want to serve on a board, what value you add and what new perspectives you believe you will bring. She advises to make these points clear when you are interviewing for a board seat.
New boards vs. existing boards
Newly formed boards offer a unique opportunity to build the culture, rhythm, and structure of governance from the ground up, but its success is dependent on the principal shareholder(s), who will define the culture of the board and company. Shareholders set the tone.
Knowing when it’s time to leave a board or offboard a member
Having the self-awareness is key to knowing when it’s time to leave. Lynn suggests asking yourself, “am I still a good fit?” and “do I like what I'm doing on this board?”, “Am I enjoying the discussions at the board meeting?”, “Do I feel as though I am contributing to the growth of the company?” If the answers are no, maybe you need to consider stepping out.
Offboarding a member is one of the challenging aspects of board governance, especially in close-knit or long-tenured groups. It requires direct but respectful conversations from the lead director, board chair, or governance chair.
Whether a board member is being asked to leave due to performance issues or company changes, Lynn recommends treating it like a celebration and acknowledgement of the person’s service on the board, almost like a retirement.
Board evaluations make it easier to provide ongoing feedback
Even private and early-stage boards benefit from formal assessments. Annual board effectiveness and peer evaluations help surface underlying issues in board dynamics and performance. Peer evaluations can be sensitive for company boards, so Lynn suggests introducing different types of evaluations in parts.

Quotes

“ABARTA Coca-Cola was one of the first family-owned businesses I know to really think about independent governance. There were a majority of independent directors on a board, had a high quality strategic plan that is really a living, breathing document and a good family council or an ownership council. Those are the three things that take a business from Gen 1 or 2 into 3, 4, 5, 6, and beyond.”

”I take my commitments to the companies and the families that I work with 100% seriously the same way that I did in running a company or working for a Fortune 50. When you join a board, you are committed to that organization. You're a fiduciary. Why would you do this unless you really wanted to help make an impact, and the only way you can make an impact is to take what you do seriously.”

”The first thing you need to think about when you've been approached about joining a board: can I really make a contribution? I also think passion for the business is really important, passion for the product, the service and what the company does is really important.”

“ It's important when you're on a newly formed board to think about what you know from boards that have been around for a while, and how you apply those learnings to help support the formation and the development of the new board.”

“Do I enjoy the conversations? Am I feeling like it’s a good fit?” And no matter how many years you’ve been on the board “do you like what you’re doing?"

Links

Four Key Questions to Ask Yourself

How to Be an Exceptional Director

Board Refreshment — When Is It Time?

getonaboard.com

Guest Bio

Lynn has extensive experience in family board governance, having served on more than a dozen family and PE boards as Independent Chair/Lead/Director. She also is a Strategic Advisor & Mentor to Family Board Chairs for Vitamix and for a Coca-Cola Bottler. And Lynn has mentored next generation board members & leaders. Her industry experience spans CPG, beverage, food, food service, e-commerce, digital, retail, manufacturing,and supply. She currently serves as an Independent Director on several boards, including Vollrath Manufacturing, Just Born (the PEEPS company), Basic American Foods and Kalsec Global Flavors.

As an executive at PepsiCo, Lynn gained expertise in corporate strategy, operations, manufacturing, brand strategy, marketing and sales. She was named The Private Company Director of the Year by the National Association of Corporate Directors in 2022. Lynn also serves as one of three judges for Deloitte’s Best Managed Private Company program and frequently speaks and writes on effective family business governance.

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In this episode hosts Joe Ayoub and Raza Shaikh welcome Susan Leahy, the founder of Robert’s Rules Made Simple. Susan has trained and advised thousands of board members, board chairs and others on how to master Robert’s Rules of Order, to help lead and participate in productive meetings.

Key Takeaways

History of Robert’s Rules of Order
- Robert’s Rules of Order is a decision making process developed in the 1800s by General Henry M. Robert, who was frustrated by disorganized meetings. Roberts created a guide, first published in 1876, which summarized and simplify parliamentary procedure to make understanding how to run an effective meeting accessible to everyone. It has, over the years, evolved into a detailed 700-page reference guide.
Susan’s journey to Robert’s Rules
- Leahy was first introduced to Robert’s Rules when she and her mother enrolled into a local junior college course to learn about how to run an effective meeting. At that time, Leahy’s mother served on an all-male city council board and found that during the meetings, discussions and decisions weren’t clear. Understanding Robert’s Rules gave her mother confidence in the meetings and she was able to find her voice and she was able to be of service “ and she was able to find her voice and she was able to be of service.”
- Susan began using Robert’s Rules in high school and at college in connection with student government and became known for running effective meetings
The value of effective board meetings
- Robert's Rules of Order increases the likelihood that meetings will be productive.
- At its core, the Rules are about promoting clarity and action. By following the Seven Fundamental Motions of Robert’s Rules meetings become more productive
- Robert’s Rules is only used to handle the business of meetings, not the entire meeting. Once board members learn the basics, then the board's productivity increases exponentially.
- Robert’s Rules are intended to provide everyone in the boardroom with a “common language” to help foster productive discussion and decision-making regarding the business of an organization.
The role of a parliamentarian in board meetings
- A parliamentarian is a resource for the chair, ensuring meetings stay on track. The chair ultimately makes the final decision but can consult with the parliamentarian whenever needed.

Quotes

”When you are on a board, you're either handling information items or business items, and when it comes to the business of a board, everyone on that board needs to understand the decision making process they're using in order to be productive and drive action.”

”You do not need to be a parliamentarian to use Robert's Rules of Order. It is a reference guide there to support you in making business decisions. That's important because if people do not have a common understanding about how you're making business decisions, it's can create tension, mistrust, frustration - and it's going to waste a lot of time”

”What we do is put an emphasis on providing training that's going to make us more high functioning. How are we going to not just get it “right” how are we going to be healthy? And that's why I focus on healthy board dynamics and using Robert's Rules of Order as a tool to leverage a healthier dynamic on your board.”

Links

Robert’s Rules Made Simple

Guest Bio

Susan Leahy, MA CSP, is a dynamic and highly engaging speaker, trainer, and facilitator specializing in board development, leadership, and effective meetings. As the founder of Robert’s Rules Made Simple, established in 2004, Susan has empowered thousands of board members, board chairs, and support staff to master Robert’s Rules of Order, transforming meetings into productive, efficient, and empowering experiences.

A sought-after expert in communication, leadership, and group decision-making, Susan has worked with organizations of all sizes—from nonprofits to Fortune 500 companies and government entities. She is the creator of the acclaimed "Chair a Meeting with Confidence" program, designed to help board chairs lead with clarity, authority, and ease.

With a Master’s degree in Applied Behavioral Sciences from Bastyr University, Susan combines deep expertise with a refreshingly engaging approach. Her unique background—being raised by a professional clown and a career Marine—shapes her signature style: energetic, impactful, and highly memorable. She has a rare talent for making even the most complex or dry topics both accessible and engaging, leaving her audiences empowered and inspired.

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh welcome Tom Rosedale, a partner at the law firm of Nutter McClennen & Fish. Tom serves as chair of the firm’s Corporate and Transactions Department and is a member its Executive Committee.

Tom has 27+ years of experience as a corporate attorney and regularly advises public and private company boards of directors in tech, life sciences and more. He has also served on the board of directors of multiple companies including Caring Cross, Vector BioMed, and AMD Global Telemedicine.

The discussion with Tom underscores how evaluation processes can enhance accountability and productivity and address underperforming board members in a constructive manner.

Key Takeaways

Introduction of a board evaluation process

Tom discusses a company with a board of directors with strong members but with members who were distracted, unengaged and unprepared in meetings.

A new lead director pushed for change and asked Tom to work with him to develop and implement a peer evaluation process. The evaluation process was very well received, it included rankings of each board member, written feedback and questions on the functionality of committees. It had major impact on the function of the board and, ultimately, board composition.

Addressing board member underperformance

Boards should apply some form of structured evaluation to regularly address performance issues and avoid abrupt dismissals.

Encouraging board diversity to improve strategic oversight

A board composition that includes a diversity of perspectives whether by age, background, expertise or otherwise improves strategic oversight and innovation. Adding new members to the board as the company grows, changes, faces new challenges brings in different perspectives and approaches that will allow the board to perform at a high level.

Board and shareholders impact on executive compensation

Company executives used to receive compensation in the form of stock options but now many corporations are issuing stock, RSUs and guaranteed bonuses. Compensation amounts have increased exponentially over the last few decades, even though there is an increased focus on it.

When it comes to executive compensation, board members need to remember that their role is to represent shareholders and to make the right decisions on behalf of the company.

Quotes

"The evaluation process works well when there’s a culture of accountability and no surprises."

"Ultimately, board members must prioritize representing shareholders and making decisions in their best interests."

“ If shareholders feel that a board is approving compensation or not holding people accountable for poor performance, then shareholders should vote for other board candidates.”

“The best functioning boards are the boards that don't stagnate. It's boards that don't have all 65-year-old guys who come from the same industry.”

Guest Bio

Tom Rosedale chairs Nutter McClennen & Fish’s Corporate and Transactions Department and is a member of the firm’s Executive Committee. He primarily advises clients on public and private company securities law matters including public offerings, ATM transactions, registered direct offerings and equity lines of credit (ELOCs)), mergers and acquisitions (public and private), venture capital transactions, and general corporate matters.

Tom also represents family offices with their many diverse legal needs. He regularly advises public and private company boards of directors and clients on executive employment matters and incentive compensation arrangements. Tom also serves as outside general counsel to clients in various industries.

Prior to joining Nutter, Tom founded and served as the managing member of a boutique corporate law firm for 19 years. Before that, he served as Associate General Counsel of CMGI, Inc. and Vice President and General Counsel of AltaVista Company.

Tom founded and co-founded several companies, including Corporate Filing Solutions (sold to Northwest Registered Agents), PackageFox (sold to Lojistic), Newfound Research, and Top Shelf Dog. He has served on the board of directors of multiple companies, including Caring Cross Inc., Vector BioMed, AMD Global Telemedicine (sold to Unidoc), Top Shelf Dog, Red Systems (dba Delegated.com and sold to Zirtual), and Newfound Research.

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh welcome Andrew Sutton, an attorney with the law firm McLane Middleton and an expert on AI ethics and the use of AI in law. As a founding member of his firm’s AI practice group, Sutton brings his knowledge of AI to this discussion of the ethical, legal and governance aspects of AI.

As AI continues to gain prominence, boards will have to consider how they can incorporate AI into companies and in the boardroom. Our discussion dives into the management of AI, implementation strategies and how to develop trust in the AI system.

Key Takeaways

Andrew Sutton’s background in AI

From building computers to founding an artificial intelligence group at McLane Middleton, Andrew has always been a tech enthusiast. His work spans a variety of areas, including cybersecurity, privacy, and AI’s role in corporate strategy.

AI in the boardroom

Andrew emphasizes the importance of boards addressing AI proactively as technology continues to evolve. Companies must be prepared to discuss the implications of AI implementation at the highest levels, especially given the growing expectations from stakeholders.

AI is already embedded in everyday tools, cell phones and Internet browsers to name a coup-le of obvious places, but boards must become much more intentional in how they use generative AI.

AI governance and organizational structure

A “top down approach” is key when it comes to AI governance. Boards should be collaborating closely with technology teams, consultants and managers to create clear policies and strategies for AI.

Governance will require the coordination between various departments and committees to cover risk, business and IT. Some companies are appointing Chief AI Officers to drive implementation.

Building trust in AI implementation

Companies need to create a robust structure with an AI model limited to company data and a person confirming the accuracy of the system’s outputs

AI models need to be well-maintained and frequently tested to ensure there are no biases or hallucinations.

Quotes

“Taking that first step really needs to happen now, and that should be the emphasis for every board because I believe that the shareholders are expecting that the boards are going to be on top of this.”

“ AI is different because it changes the way that people work. It changes how human capital is deployed by adding a degree of automation into processes that were otherwise knowledge and education based and human decision oriented.”

“If you're not moving forward with this, you risk being left behind. It is transformative in a way where in 5 or 10 years you might not be a relevant player…”

“An important part is having a robust structure in place that allows you to trust the AI… If you know that your data is good and your AI is limited to your data, and your model is tested and regularly maintained, then you can have confidence that what’s coming out of the AI is probably accurate.”

Guest Bio

Andrew Sutton is a founding member of McLane Middleton’s Artificial Intelligence Practice Group with work experience that includes Artificial Intelligence policy and ethics, the use of Artificial Intelligence applications by employees; acceptable use policies, Artificial Intelligence deployment/strategy, Artificial Intelligence application assessments, consumer protection concerns, robotics and the deployment of Artificial Intelligence technologies in the physical world. Andrew’s experience also includes cyber security, privacy and corporate work including complex transactional and real estate issues.

Andrew is a co-author of AI and Ethics: A Lawyer’s Professional Obligations which is included in the American Bar Association’s publication Artificial Intelligence: Legal Issues, Policy, and Practical Strategies published in 2024. He is a founding appointee to the Massachusetts Bar Associations Artificial Intelligence Practice Group and a member of the Boston Bar Associations Senior Associates Executive Steering Committee. Andrew regularly presents to local and national audiences regarding matters involving the ethical use of artificial intelligence and the use of artificial intelligence in connection with the practice of law.

Links

Corporate Governance Institute: Guide to AI in boardroom decisions

Artificial Intelligence: Legal Issues, Policy, and Practical Strategies

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh welcome Dr. Angela Jackson, founder of Future Forward Strategies, an award-winning social entrepreneur, a global C-Suite executive, and an experienced board member. She discusses the board's role in holding leadership accountable for “people strategies” and ensuring companies remain competitive in a rapidly evolving business environment.

Her new book “The Win-Win Workplace: How Thriving Employees Drive Bottom-Line Success” will be published on March 11, 2025 and will be available from all major book retailers.

Key Takeaways

Workforce Wellbeing as a Strategy:

○ Dr. Jackson emphasizes the importance of viewing employee wellbeing as a core business strategy rather than just a set of HR policies, noting that companies with high employee wellbeing see 23% higher profitability and 43% lower turnover.

Board Oversight and Accountability:

○ Boards should regularly evaluate metrics such as employee engagement, retention rates, and turnover costs, and tie executive compensation to key people-related outcomes.

The Role of Inclusion and Investing in Employees:

○ Despite changes in external policies, companies should maintain their commitment to inclusion to foster trust, reduce risk and drive business outcomes

○ Staying proactive on workforce sentiment helps companies respond to potential risks before they escalate.

Grow Your Own Deep Talent Bench Strategy:

○ Developing internal talent pipelines reduces turnover by 40%, increases employee engagement by 20%, and builds a more resilient organization. Companies prioritizing internal mobility fill 63% of open roles internally and are 2.2x more likely to outperform competitors.

Mitigating Workforce-Related Risks:

○ Dr. Jackson highlights how companies can reduce legal risks and avoid reputational damage by staying consistent with core values and policies.

Quotes

“At its core, DEI was about creating workspaces where people could actually show up, be their best selves, and contribute. I’m not going to die on the sword of an acronym, but we must maintain that spirit.”

“Keeping our finger on the pulse of employee sentiment is going to be more important than ever. When there’s uncertainty at the highest levels in the country, that trickles down to the day to day.”

“Win-Win Workplace strategies protect companies from workforce instability, reputational damage, and labor crises in a tight labor market.”

“When employees love where they work and what they do, they tell everyone. They are our first customers if you’re doing it the right way.”

Guest Bio

Dr. Angela Jackson is the founder of Future Forward Strategies, a labor market intelligence, design thinking, and strategy firm that helps leaders transform organizations and develop the human capital infrastructure essential for maintaining competitiveness while driving positive impact. With a focus on public, private, and non-profit sectors, Dr. Jackson’s work centers on creating innovative solutions for the future of work.

As a lecturer at the Harvard Graduate School of Education, Dr. Jackson teaches the next generation of students about entrepreneurship in the education marketplace.

She was also the architect of the Future of Work Grand Challenge, a groundbreaking initiative designed to rapidly re-skill 25,000 displaced workers into living-wage jobs within 24 months. Dr. Jackson’s expertise lies in crafting a future of work that is inclusive and sustainable. She has shared her insights at prominent conferences such as TEDx, Concordia Summit, Techonomy, ASU + GSV, the U.S. Chamber of Commerce Digital Empowers National Summit, and Black Women Talk Tech. Her work and thought leadership have been featured in outlets including CNN, Stanford Social Innovation Review, Quartz, Harvard Business Review, and more.

Links

Win-Win Workplace: https://www.readwinwinworkplace.com/

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In this episode of On Boards, hosts Joe Ayoub and Raza Shaikh welcome Lucie Claire Vincent, a global leader in consumer products and an independent board director, to discuss the vital role of risk governance in board effectiveness.

Lucie Claire shares insights from her distinguished career at Fortune 100 companies, her experience as an independent director, and her work with the Directors and Chief Risk Officers Institute (DCRO).

Lucie Claire also delves into the importance of earning the Qualified Risk Director (QRD) designation and the impact it has on boardroom discussions and decision-making. With her rich international experience and expertise in risk governance, she offers actionable insights for board members and aspiring directors on navigating the complexities of modern board oversight.

Key Takeaways

The Importance of Risk Governance in the Boardroom:
- Lucie Claire emphasizes the board’s role in overseeing risk, particularly in a fast-changing environment where issues like AI, cybersecurity, and enterprise risk management dominate the agenda.
- Positive risk governance can shift perspectives from mere risk avoidance to value creation.
DCRO’s Educational Programs:
- DCRO’s Certificates in Risk Governance and Cyber Risk Governance provide comprehensive, globally recognized training for directors and executives.
- These programs combine in-depth content, business case analysis, and cohort-based learning to enhance participants' ability to manage and oversee risk effectively.
Earning the Qualified Risk Director (QRD) Designation:
- Achieving the QRD requires a rigorous self-assessment, relevant professional experience, and references, positioning individuals as experts in risk governance.
- Lucie Claire describes the designation as akin to being a “qualified financial expert” for risk, making QRD holders valuable assets to boards.
Bringing Value to the Boardroom:
- Lucie Claire’s certification has enhanced her ability to guide discussions on innovation, stakeholder engagement, and strategic planning with a risk-positive mindset.
Her contributions have been particularly relevant in her role with technology and B2B organizations.
Who Should Pursue Risk Governance Credentials?
- Current and aspiring board members, as well as senior executives, can benefit from these programs to build resilience, value, and trust within their organizations.
Networking and Continued Learning:
- DCRO fosters a global community of risk professionals through events, newsletters, and case studies, providing ongoing learning opportunities for its members.

Quotes

"The concept of positive governance in risk-taking changes how you see risk. It’s about value creation and having a more strategic, long-term view of the business."

"The diversity of industries, thought, and verticals in my DCRO cohort enriched the conversations. It’s fascinating to see how risks are addressed differently across sectors."

"Most boards still place the risk component within the audit committee, but as risk becomes more complex, there’s a growing need for separate risk committees."

Guest Bio Lucie Claire Vincent is an accomplished leader in global consumer products, having held senior roles at Colgate Palmolive and Philip Morris International. She serves on the board of Toluna, advises startups in consumer technology, and is an adjunct professor at NYU’s School of Professional Studies. A lifelong learner, Lucie Claire holds multiple governance certifications, including a Qualified Risk Director designation from the DCRO Institute.

Resources and links

DCRO Institute: www.dcroi.org
Women Execs on Boards: https://weob.org

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Episode Summary

In this episode of On Boards, Joe and Raza welcome Marc Schneider, an accomplished e-commerce and fintech executive with decades of experience building and scaling mission-driven companies.

Marc shares his entrepreneurial journey, including his tenure as co-founder and CEO of Zebit, a transformative e-commerce and fintech platform, and his current role as an Operating Venture Partner at Ulu Ventures.

The discussion dives into governance challenges in venture-backed startups, the evolution of boards from early-stage to IPO, and how founders can effectively leverage board expertise. Marc also discusses Ulu Ventures' commitment to supporting diverse entrepreneurs and shares insights into his innovative role as an “active” board observer and mentor to founders.

Key Topics Discussed

Marc Schneider’s Career Journey
Background and Passion for Mission-Driven Companies: Marc’s journey began with his personal experience of financial hardship, which inspired his work at Zebit to provide credit-impaired consumers with fair access to products without interest or penalties.
Key Roles: From managing customer service operations at ProFlowers to leading Zulily and founding Zebit, Marc’s career has been defined by innovation and scaling impactful businesses.
Zebit’s Business Model and Mission
Zebit’s Unique Value Proposition: Providing underserved consumers with fair, interest-free payment options for e-commerce purchases.
Challenges: Operating efficiently without typical revenue streams like interest or penalties, while predicting customer payment behavior with data-driven models.
IPO Journey: Zebit went public on the Australian Stock Exchange (ASX) to access liquidity, even though the process posed significant challenges, including valuation issues and market unfamiliarity with its business model.
Board Governance in Startups
Evolution of Boards: Marc discusses the progression of boards through funding stages, from limited investor involvement in early rounds to more structured and diverse boards in public companies.
Lessons for Founders:
Understand the dual role of investors as board members and stakeholders.
Take an active role in shaping board dynamics and agendas.
Prioritize chemistry and diverse perspectives in board composition.
Ulu Ventures and Supporting Diverse Entrepreneurs
Ulu Ventures’ Mission: Backing women, minority, and diverse entrepreneurial teams using decision analytics to assess investments.
“Active” Board Observer: Marc’s role involves mentoring founders, facilitating board discussions, and bridging gaps between management and governance.
Lessons Learned and Giving Back
Persistence and Adaptability: Marc’s reflections on navigating challenges, from startup struggles to delisting Zebit, emphasize resilience.
Mentorship and Legacy: By supporting young entrepreneurs, Marc hopes to inspire a cycle of giving back within the startup ecosystem.

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In this episode of On Boards, Chris Cuddy, a seasoned executive and board leader with over 25 years of experience growing technology-enabled companies in both the private and public sectors shares invaluable insights into the evolution of a company’s board as it progresses through different growth stages. He discusses how the board’s role shifts over time from hands-on support to formal governance.

His unique perspective is informed by his extensive career, including key roles in companies like Cheapflights, Engage, and ezCater, as well as his background in consulting, investment, and board leadership.

Key Topics Discussed:

Stages of Board Evolution in Startups
- Seed Stage: Founders are often the primary board members, with activities blurred between governance and management. Chris recalls the “early days” of ezCater, likening the stage to “two founders and a PowerPoint.”
Startup Stage: Boards begin to focus on defining product-market fit and may introduce angel investors. Chris describes his hands-on involvement with ezCater at this stage, from customer calls to financial planning.
Growth Stage: The board’s role formalizes with the introduction of venture capital. The addition of independent board members and committees becomes essential in order to scale. Chris shares how ezCater’s board evolved to support rapid expansion across the U.S.
Maturity Stage: The board is now primarily focused on governance, with a clear distinction between board and management roles. Chris reflects on how the board transitions into “maintenance mode.”
Renewal or Decline: Boards help strategize paths to either reinvigorate or prepare for acquisition. Chris recounts his experience with Engage, navigating challenges during the tech bubble burst.
Key Traits of a Functional Board
- Selecting board members with domain expertise, cultural fit, and a shared commitment to supporting the company.
Chris discusses the importance of a highly functional board in advancing a company’s mission and creating stability.
The Role of the Board Chair
- Chris highlights the importance of the board chair as a bridge between the founders and board members, ensuring transparent communication and balanced input.
He shares insights on the unusual longevity of his role as ezCater’s board chair, attributing it to his ability to adapt as the board and company evolved.
Unique Challenges and Responsibilities in Early-Stage Boards
- Chris describes the blurred line between governance and management in the initial stages, emphasizing that board members may often act as extensions of the executive team, especially in strategic, operational, and fundraising efforts.
Building the Board with Intentionality
- Chris emphasizes the importance of selecting investors who bring value beyond capital, often influencing the board’s dynamic and direction.
Chris and Raza discuss the need for careful vetting of potential investors and board members to maintain a cohesive and effective board culture.

Memorable Quotes:

Chris Cuddy on the role of the board in the growth stage: "The ambition and time frames often require venture capital, but this step requires serious reflection. ‘Will this change the DNA of the company?’”
Board dynamics: “A functional board isn’t just about expertise—it’s about cultural fit and motivation to support the founders and company’s best interests.”
On the board chair’s responsibilities: “The chair is a bridge between board members and founders, ensuring transparent communication and insuring that everyone’s voice is heard.”

Takeaways for Board Members and Founders:

Understand the shifting role of the board at each company growth stage.
Prioritize a balanced board composition that brings both expertise and alignment with the company’s culture.
In early stages, board members often play a quasi-executive role, actively participating in operational decisions.
For sustainable growth, founders and the board must align on long-term vision, values, and expectations for governance.

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Episode Summary In this insightful episode of On Boards, hosts Joe Ayoub and Raza Shaikh welcome Pam Lenehan, a seasoned board member with over 22 years of experience on public company boards. Pam offers an in-depth look at the evolving responsibilities of boards and their members, including critical areas like cybersecurity, ESG, and CEO succession.

Drawing on her experience across seven public company boards, Pam discusses the increasing complexity of board roles, committee responsibilities, and the importance of a collaborative, learning-focused approach for today’s directors.

Key Topics Discussed:

The Expanding Role of Boards in Risk Management
- Pam explains how boards are increasingly required to manage a broader spectrum of risks, from cybersecurity and AI to unexpected events like pandemics. She highlights the need for board committees (audit, compensation, technology) to coordinate their oversight on key issues and work with management to stay proactive.
Board Dynamics: Shifts in Meeting Structure and Time Commitments
- The increased reliance on digital platforms has, among other things, led to voluminous board materials, often reaching hundreds of pages. Pam shares how boards are restructuring their meetings to prioritize discussion over presentation, with a growing emphasis on pre-meeting preparation.
Pam notes how the frequency of both board and committee meetings has increased, with some public company boards now often holding eight or more meetings annually.
Maintaining Collegiality Amid Virtual and Shorter In-Person Meetings
- As more meetings shift online or the agenda is so packed it leaves little time for social interaction, the value of planned social opportunities, even brief breaks, to foster trust and rapport among board members. Pam’s insights on “planned socialization” underscore its role in facilitating effective communication and decision-making.
Evolving Expertise on Boards: Moving Beyond Generalists
- With a growing need for specialized knowledge in finance, industry, and technology, boards are increasingly composed of directors with specific expertise. Pam shares practical advice on balancing specialized skillsets and emphasizes that most board member should still possess a solid understanding of broader governance areas, even beyond their primary expertise.
The Role of the Board Chair and Lead Director
- Raza and Pam discuss the crucial role of the board chair in ensuring all voices are heard and the board remains aligned. With a diverse array of specialists now joining boards, the chair’s leadership is increasingly important to synthesize perspectives and guide effective discussions.
The Influence of Shareholder Activism and Public Company Challenges
- Pam recounts her experiences with shareholder activists, noting how modern boards must be prepared to engage with sophisticated activist stakeholders. For directors, understanding activist perspectives and strategizing responses requires both diplomacy and transparency.
The Time Commitment of Board Service
- For anyone considering board service, Pam provides a candid look at the significant time and energy required. Acknowledging that board roles demand consistent weekend reading and adaptability for unscheduled meetings, she advises prospective directors to consider the full requirements of a board commitment before joining a board.
Continuous Learning and Networking for Directors
- Pam discusses the importance of ongoing education in governance, such as through the NACD, board excellence centers, and director forums. She advocates for cultivating networks with other directors to share experiences and insights, particularly on emerging or complex issues.
Supporting Diversity and Inclusion on Boards
- A proponent of diverse board representation, Pam shares her efforts to mentor women preparing for board roles. She encourages both current and aspiring board members to seek education and develop networks that enhance board diversity and effectiveness.

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In this episode, Christopher Mirabile, Executive Chair of Launchpad Venture Group, explores the pivotal role of boards in startup companies and discusses how boards can be both a critical support system as well as a driver of success.

We love our listeners! Drop us a line or give us guest suggestions here.

Big Ideas/Thoughts/Quotes

“Life is too short to suffer with the wrong people in your boardroom.”

Startup Boards are different, but still vitally important

“Boards have featured prominently in my entire professional life.”

“When I was a consultant with the strategy group at Pricewaterhouse, ultimately our work was commissioned by boards and delivered to boards, and those board presentations when I was lucky enough to be in the room as a young person on the team were some of the most high-pressure situations that I ever was in professionally and left a real impression on me.”

“When I got into the startup world, I sort of had to unlearn a certain amount of what I’d learned about boards and moved to the end of the spectrum where boards provide as much mentoring and business value as they do governance.”

“Startup boards tend to be a little smaller, a little bit more nimble and often the membrane between shareholders and directors is much thinner because you often see meaningful representation direct from the shareholder base on the board.”

“When you run into resistance from a founder [about a board], it's often really more of an educational journey than a negotiating journey to try to get them to understand the value of a board.”

Why is a board important for a startup?

Your investors want it and you're not going to be able to raise money without it and why would you reinvent the wheel when you can have people who made those mistakes before and can help you avoid wasted time and wasted resources.

“A big part of what [we] do is help CEOs understand that …if you go into a relationship with your board, it's sort of like an intellectual partnership where you bring the courage to admit you don't have all the answers and you really seek to draw the wisdom out…”

…If you show me a CEO that's failing, I'll show you a board that's failing to support that CEO properly …

Attitude of Startup board members

“I don't want to be anywhere near the blast radius of a startup that fails, so I want to make sure that this company is going to succeed…”

Feedback to CEO after a Board Executive Session

A great way to give feedback after an executive session is: "Hey, let's just do a little case study here. In the meeting, you said this, here's what they heard..." and then it's not an in-your-face criticism, it's just helping them understand how they're being perceived and how their choice of words and their manner of speaking and their style affects the impact of their communications…I think that can be a very effective non-confrontational way to give quick feedback to a CEO.

The Independent Member of a Startup Board

“What we're looking for is two things. One is the avoidance of some negatives and the other is certain positives. I'll start with the avoidance of the negatives.

We don't want an inexperienced blowhard who has a lot of ego involved in telling people what to do and insisting that their advice be followed, and someone who contributes to a board meeting in a manner which sucks all the oxygen out of the room and makes it super awkward to disagree with them.

We're looking for someone who has a little bit of experience, understands boards are a working thing and that startups are an imperfect science and they're not going to be a disruptive or difficult board member. That's the kind of the key negatives that we're looking to avoid.

In terms of the positives, really, we want someone who understands the industry dynamics, understands the players, knows who the company and the CEO should be talking to, and has that bigger perspective, who can put the day-to-day operational challenges of the company into a broader industry context, and then ultimately make introductions when it's time to find additional investors or exit the company.

So, all we need is a well-behaved genius. It's easy.”

Training Board Members

“Launchpad now has at least 50 portfolio companies and 40 Launchpad members are either in the boardroom as a director or an observer. That's a pretty large portfolio of board members and observers that the group is adding as human value to the companies.”

Our training consists of three things.

· One is expectation setting and accountability,

· The second is we tend to give the newer investors in our group an opportunity to serve as an observer under an experienced board member for at least a year so they get a little bit of a sense of what it’s about.

· The third piece is really traditional training and that consists of training we do before they serve on the board and then ongoing training after they've begun. The training we do before is basically making them read the director's guidebook that Ham and I wrote, which really covers all of the basics, and we go to great pains to say, "No, we really mean it when we say we want you to read this. Don't come to the class if you haven't read it because we'll know."

· Then we do a class where we give them an opportunity to discuss questions and things that weren't clear from the book and we take them through a whole layer of sort of pragmatic suggestions on how to get that first meeting successful and how to run a good board

Overboarding

“It's really an issue in the VC world … I think a lot of people draw some measure of professional pride out of being on a board and they can tend to get a little carried away and take on too many board assignments.”

“In our experience doing a startup board well, even in a year where it goes pretty well, it's about a 200-hour-a-year commitment.”

“We do go out of our way to keep them [people with too many board seats] off the board, and one of the reasons we really prefer to lead rounds is because we want to have a hand in building the board and making sure that we're giving our CEO all the resources she or he needs to succeed and putting the right people around our management team.”

Responsibilities of Boards have expanded dramatically

“The basics sort of used to constitute most of what a board did, and now a board has so many other jobs, it's really overwhelming a number of things that we expect boards to do and I think that it not only takes away from some of the time that could be spent on the basics, but it creates a ‘whack a mole’ kind of a mindset in terms of directors.”

Links

linkedin.com/in/christophermirabile

Bio

Christopher Mirabile is the Chair Emeritus of the Angel Capital Association and the immediate past Chair of the U.S. Securities And Exchange Commission’s Investor Advisory Committee. He is also the Executive Chair of Launchpad Venture Group, a Boston-based venture investment group focused on seed and early-stage investments in technology-oriented companies. Launchpad is top-three ranked group in the U.S. As a full-time angel investor and an active member of the Boston-area angel investing community, in addition to his Launchpad work, Christopher has personally invested in over 65 start-up companies. He was named one of the "Top Angel Investors in New England" by Xconomy, one of "Boston's Most Helpful Investors" in an entrepreneur survey by Companyon Ventures and is the recipient of the Angel Capital Association's Hans Severiens Award for his contribution to the advancement of angel investing. Christopher has co-authored six books on early stage investing, been a columnist on entrepreneurship for Inc. Magazine, is a co-founder of portfolio management tool www.seraf-investor.com and co-author of the Seraf Compass, a comprehensive web catalog of educational materials about early stage investing, an adjunct lecturer in the MBA program at Babson's Olin School of Business, a regular advisor and mentor to start-ups, and a frequent panelist and speaker. He is a member of the Board of Directors or Board of Advisors of numerous start-up companies and non-profits. Christopher has served as a public company CFO and General Counsel with enterprise software provider IONA Technologies PLC, a corporate and securities lawyer with Testa Hurwitz & Thibeault and as a management consultant with Price Waterhouse's Strategic Consulting Group.

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In this episode, Rick Williams, a seasoned executive, advisor, board director, prolific writer - - and the author of the new book, Create the Future, shares his journey writing the book and key leadership takeaways.

Rick’s core idea in Create the Future is that leaders create the future by the decisions they make Impactful leaders believe they can create the future, and they change uncertainty into hope and possibility.

Rick discusses the CTF process of making great decisions for companies and individuals including the importance of board dynamics and how to harness the collective wisdom of a diverse group to make impactful decisions.

We love our listeners! Drop us a line or give us guest suggestions here.

Big Ideas/Thoughts/Quotes

Journey of Writing Create the Future

· Initial book concept during travels in North Africa while sitting in a café in Casablanca

· Wrote the book and refined it with the help of a professional editor.

· It took more time than I expected to choose the right publisher, Amplify, to bring the book to market.

2. Overview of Create the Future

Create the Future outlines the process and the tools successful leaders use when they must make an important decision - when they must get it right. Rick profiles the Five Step decision making process major consulting firms recommend for making important decisions and brings the tools and techniques to organizations off all sizes.

Create the Future is a guidebook for leaders who want to turn their leadership team into a powerful creative engine for defining the challenge, imagining success, creating realistic options, evaluating execution barriers, and finally choosing the path forward.

The Five-Step Decision-Making Process

“I spent quite a bit of time on how do you as a leadership team - a board of directors for example - how do you actually go about deciding what you're really going to do.”

“This book outlines the five steps that we all either instinctively use, or should be using, when we have an important decision to make.”

· Define the real opportunity or threat.

· Identify what success looks like

· Be creative about the options.

· Evaluate execution barriers.

· Make the final decision.

Factors to be Considered in Decision Making

· How close do the decisions come to achieving the goals you set?

· Where are they in the risk profile in terms of acceptable risk to you or unacceptable risk to you?

· How do they express the values that you may have as a company owner or your board may have.

Examples and Applications

The CTF process makes sure that everybody on the board participates in the conversation, their point of view is heard, and they hear each other talk about it. They hear each other say what they really are trying to accomplish.

“We talk about success, which sounds like a simple idea, but the notion of what are we really trying to achieve is one that often we don't spend enough time on.”

“Value is not created by the ideas we come up with - value is created through execution on the decisions we make.”

“Often we as board members either don't have time or haven't fully thought through what are the values that we bring to the decisions we make, what are our risk preferences, and also what are the values and goals of other people on our board and how do they factor into this?”

In the end, the board will make a decision, and the people who participate in this will say: “You know, I may not fully agree with where we're going to go, but my voice was heard, and I now understand what other people are trying to do and where they're coming from.”

Joe: If you have the people in the room, whoever they may be board or otherwise, feeling at the end of the process like their voice has been heard, their ideas have been heard, and at least considered - - that alone is success.

Links

Here is the link to CTF’s website: https://rickwilliamsleadership.com/books/

Here is the link to the book on Amazon

Rick’s LinkedIn Profile: www.LinkedIn.com/in/RickWilliams100

Bio Rick Williams is an experienced technology company board of directors’ member and board chair. He has chaired the board of a medical device company and a bank/VC firm. Williams is a company founder and CEO and was a management consultant advising clients in a wide variety of industries.

He is an internationally published thought leader on board of directors as a value accelerator for the company. His new book, Create the Future, is a leadership guidebook for being more creative and making better decisions for your company and yourself when you must get it right.

Rick is past President of the Harvard Business School Association of Boston. He was a management consultant with the global consulting firm Arthur D. Little, Inc. He is a physics graduate of the University of Pennsylvania.

www.RickWilliamsLeadership.com

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With an extensive background in policy, advocacy, and corporate governance, Karen shares insights from her roles at Pfizer, iFIT Health & Fitness, and the NAACP. She recounts her journey to becoming a board member including her experiences during the IPO process at iFIT, and the challenges and triumphs of leading through turbulent times.

Additionally, Karen reflects on the significance of diversity in board composition and the enduring impact of Brown v. Board of Education on the 70th anniversary of the decision.

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Big Ideas/Thoughts/Quotes

First For-Profit Board Experience: iFIT Health & Fitness

Karen recounts her journey leading to joining the board of iFIT Health & Fitness, her first for profit board seat, emphasizing the importance of networking and building relationships. She shares how an unexpected opportunity arose from her connections with the Church of Latter-Day Saints and describes the rapid onboarding process and initial experiences as a new board member during a critical time for the company.

"You never know who's watching, it came through a relationship."

Challenges and Decisions During the IPO Process

Karen provides an inside look at the fast-paced environment leading up to iFIT’s planned IPO. She discusses the board’s decision-making process in response to adverse market conditions and the strategic adjustments that were necessary. The conversation highlights the importance of having a diverse and well-composed board to navigate events that are significant & challenging for a company.

"When you are preparing an S-1, you learn everything about a company very quickly."

"The numbers weren't where they were projected to be at that particular time, and I'm really proud of us because it could have been easy to just buckle down and go forward, but that was not the right thing for the company."

Post-IPO Attempt and Company Turnaround

The discussion moves to the aftermath of the decision to not proceed with the IPO and the strategies employed to stabilize and grow iFIT Health & Fitness.

"What I'm happy to say is that despite the overall industry being at a bit of a downturn, we have come through the worst of it, at least we hope we've navigated through the turmoil and are at a new era."

Work at Pfizer

Karen reflects on her 20-year career at Pfizer, where she transitioned from government work to corporate affairs. She discusses her role as Pfizer’s first Chief Diversity Officer and the development of a global diversity and inclusion strategy.

Leadership During COVID-19

Karen discusses the significant challenges and achievements of Pfizer during the COVID-19 pandemic under the leadership of Albert Bourla. Karen’s insights emphasize the critical role of strong leadership in navigating crises and driving impactful results.

"I believe to my core that no one else could have gotten that company to have that level of impact in such a short period of time [during the Covid outbreak] other than Albert Bourla and the team that he leads."

"Leadership matters"

Role with the NAACP

Karen is the Vice Chair of the NAACP’s National Board of Directors and provides an overview of her role discussing the organization’s mission, structure, and its ongoing important advocacy work. She also reflects on the 70th anniversary of the Brown v. Board of Education decision and its lasting impact on education equality. The conversation underscores the importance of historical context in shaping current and future initiatives for civil rights and social justice.

On recognizing the 70th anniversary of Brown v Board of Education in the Oval Office

“It is a moment I will never forget and it's not just about being in the Oval Office with the President, but it was being there with these family members who had made so many sacrifices."

Final Thoughts and Takeaways

The episode concludes with Karen’s reflections on the importance of leadership, diversity, and strategic decision-making in board roles. She shares personal insights from her career journey and offers advice for aspiring board members, emphasizing the value of passion and commitment to the mission of the organizations board members serve.

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Jennifer Jukanovich, a seasoned nonprofit leader with nearly three decades of experience discusses her forthcoming book, The Culturally Conscious Board: Setting the Boardroom Table for Impact, which explores the importance of board culture in achieving organizational success. The conversation addresses a number of important aspects of board governance, including board culture and the critical role of trust and humility.

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Big Ideas/Thoughts/Quotes

The Culturally Conscious Board

· Two important concepts which are emphasized:

o The significance of board culture and its impact on decision-making and governance, and the role of trust, humility, and hospitality in building an effective board culture.

o Jennifer’s closing thoughts on the importance of strong board culture in the nonprofit sector.

· Encouragement for boards to engage in deeper conversations and continuous improvement.

· Introduction to the "board culture placemat" and its use in facilitating board discussion and b building a strong board culture.

· Examples of successful practices for building and maintaining a healthy board culture.

"Boards are assets to our society, and our hope is that our book, The Culturally Conscious Board, will contribute to that conversation." Jennifer Jukanovich

Book Reviews

“Sitting on a board is easy. But being a great board member is another matter entirely, especially if your organization needs change. Jukanovich and West show you how to do it with confidence and grace.”

Arthur C. Brooks, Professor, Harvard Kennedy School and Harvard Business School, and #1 New York Times bestselling author

“‘Culture eats strategy for breakfast,’ Drucker said, and most boards don’t explore how their culture either detracts from or advances their mission. This work invites boards to move from habits and traditions that restrict their impact toward deeper examinations to make wise changes and meet the challenges of our day.” Robert C. Andringa, Managing Partner, The Andringa Group, and coauthor of Nonprofit Board Answer Book

Challenges and Opportunities in Board Governance

o The importance of diverse representation and an inclusive board culture.

o Practical advice on improving board culture, including transparency, accountability, and feedback mechanisms.

o Addressing issues such as long-term leadership and the balance between large boards and effective decision-making.

"Humility catalyzes greater trust, whether that is your family or that's a board."

"Good governance creates health. Good boundaries create healthy culture."

The Critical Partnership between the CEO and the board chair

o How the board chair can help ensure all voices are heard and foster a culture of openness and respect.

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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.

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Big Ideas/Thoughts/Quotes

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.”

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”

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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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.

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Big Ideas/Thoughts/Quotes

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.

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."

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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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

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."

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."

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."

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."

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?"

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.

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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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.

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Big Ideas/Thoughts/Quotes:

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.”

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.”

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.”

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.”

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.

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.: https://fortune.com/2021/11/23/sec-human-capital-great-resignation-employee-retention-reporting/

Future Forward Strategies: https://www.futureforwardstrategies.com

Bio

www.drangelajackson.com

Win Win Workplace (to be published January 2025) Sign up here

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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:

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Big Ideas/Thoughts/Quotes:

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.
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.
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.
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.
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.
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

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."
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."
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."
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."
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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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.

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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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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.

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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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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.

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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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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 here.

Links:

Bio: linkedin.com/in/lisa-spadafora-thompson

Articles:

https://venturebeat.com/datadecisionmakers/act-dont-react-managing-inflationary-pressures-in-enterprise-software/

https://www.lotisblueconsulting.com/insights/there-has-never-been-a-better-time-to-shockproof-your-business/

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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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:

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.?)
Self-reporting (was there transparency and speed in the reporting of the issue?)
Remediation (whatever the problem was, did you fix it?)
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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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 here.

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."

"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."

"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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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.

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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:

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?

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.

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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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 here.

Links:

Meghan Juday website and bio

The Lodis Forum

Board Refreshment: 50% of boards have at least one director who is no longer adding value; how do you know if you are the “one”?

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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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.

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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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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.

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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.

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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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.

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Steve Gullans Bio

Metis Minds

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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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

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Maria Doughty Bio

The Chicago Network

HerStories

womenlead.io

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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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.

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Melissa Sampson-McMorrow Bio

Nutter McClennen and Fish

New York Times Article about Patagonia

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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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.

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Maria Moats Bio

2022 PwC Annual Corporate Directors Survey

2022 Consumer Intelligence Series

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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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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.

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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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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.

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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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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.

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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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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.

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Links

Shaz’s website

https://www.ceilingsmashers.com/

Amazon for The Closer

https://www.amazon.com/Closer-Ceiling-Smashers-Book/dp/0998656607/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=1663614201&sr=8-1

Google Talk

https://www.youtube.com/watch?v=foKW0H9v4V0

https://www.linkedin.com/in/shazkahng/

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.

The Closer: A riveting novel about women in business succeeding with smarts, scruples, and style

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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.

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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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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.

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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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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.

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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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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.

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Links

Startup Boards – Buy on Amazon

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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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.

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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

Caught in the Culture Wars Crossfire: Board Diversity Initiatives Under Attack

SEC Approves Nasdaq Diversity Proposal

Public shaming will not solve the lack of diversity on corporate boards

Treat Climate Change as a Systemic Risk to Global Finance

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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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.

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Links

Anthony Bio

Analyzing emerging trends in board evaluation practices

How boards can adapt to support ESG efforts

The 'Climate Change' Director

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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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.

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Links

Board education & certification: https://www.pfisterstrategy.com/exceptionalboarddirector

Book on Board Architecture: https://www.pfisterstrategy.com/books

Gabe Bio: https://obvious.com/team/gabe-kleinman

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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In this episode, Mark A. Pfister, the “Board Architect,” talks about how to build a board, what that means and the powerful impact it has on any company or organization.

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Links

Board education & certification: https://www.pfisterstrategy.com/exceptionalboarddirector

Book on Board Architecture: https://www.pfisterstrategy.com/books

Quotes

The architecture component of a board forces the thought process that you are looking and planning earlier. Whether you're creating a new board, or you're looking to rebuild an existing board, put some discipline behind this, look at the design aspects of it, understand there is a successful formula and model for boards that work efficiently and effectively; hence, the terminology of “board architecture” over “board structure.”

Three areas of focus in board architecture

Sphere of influence.

This relates to the vertical components of a properly built board. Core leadership competency, operations experience, and skillset competencies.

Planes of Congruence.

This looks at the character of the Board, essentially the horizontal components. These can include balance of personality types, mix of industry backgrounds, diversity, age ranges, and many other components.

Coverage and Balance.

This has to do with creating a depth of knowledge and somewhat of an overlap of knowledge on the board. It allows for at least one other person, if not more, to have that ability to question whether it's at a governance level, whether it's at a technical level, just to understand and bring that conversation to additional questions and elevate the outcome, which is what that board is there to do .

“There's this interesting trend where placement and search organizations are being engaged to a certain degree, but the nominating committee has really taken an end-to-end process back into their purview and they're managing that process from end to end.”

Testing of board members

I use two tests, one is called the GPPI or Gordon Personal Profile Inventory, and that particular test allows me to assess what I correlate to the emotional intelligence and the mindfulness intelligence. It's not just about IQ anymore.

Another one that I use is a Watson-Glaser test that allows as a comparison back to if someone's claiming to be an expert or a certain level of leadership, you can compare that back, and all of these tests are comparing back against big data so it's not that it's right or wrong answers. It's about are other people at that level successful and how is this person comparing with that?

“I believe that 90-plus percent of most issues within any board of directors of any entity type relates back to its lack of architecture in the way the board is built, so that makes it even more important for an aspiring director to understand how they avoid engagements or even appointments where they're just simply not going to be happy, or their risk goes up.”

“I am of the mindset that we are not just representing shareholders anymore that are only focused on the financial outcome of the organization. To me, and this is another observable, a board that is focused not just on the shareholder aspect, but also on the stakeholders, which are many - that's employees, that's vendors, that's consumers of the product and services - that viewpoint has to be an equal weighted consideration in the boardroom.”

“Whatever failures happen in an organization. I don't look at the CEO. I look at the board first and foremost." The CEO is a direct representative at the operational level of the organization representing the board, period.

“Every director should keep in the back of their mind ‘values equal culture equals organizational risk level’ - all of it can be related back to that.”

Big Ideas/Thoughts

Question: What is the interrelationship between strategy and governance?

Board directors cannot properly govern without a deep understanding of not just a theory of strategy, but what the strategy is of the organization.

The diagram that I recommend, and I use in our board training is very simple. On one side sits the word goals, on the other side sits the word tasks, and in between that is a double-edged arrow or double-pointing arrow, that's strategy.

Strategy is connecting the goals to the tasks of the organization - - it's the how. When you hear “strategy” you should think “how?.”

We should be saying to ourselves as a director, "We need to fully understand the goals of this organization, and once they're set for a certain time period (the what and the why), the rest of our existence in the boardroom as it relates to governance is truly overseeing the strategy. It's the governance of the strategy, which is the how.

You cannot govern something if you don't understand the strategy, they are inextricably linked and they're absolutely related, and this is a big miss for many senior level leaders today is that they don't understand where governance sits as it relates to strategy.

Strategy today is an integrated pattern of decision-making, which in a leadership mindset, if you think about an integrated pattern of decision-making, it forces you to ask questions.

Question: In a situation where the CEO and their senior team are responsible for developing the strategy, what is, in your view, the best way for the board to be involved to a point where they're not doing the job of the senior management, but are fully involved in understanding the strategy and are able to ask the questions they need to ask of the management?

I am actually probably a little more hands-on in my belief of the board's involvement with the strategy, and I would even say with the goals of the organization, I view those two areas as a very close working relationship between the CEO and the board.

I'm not saying that the CEO should not step away and work with their team on coming up with possibly a proposed strategy, but I am also a fan before the CEO does that, that the board has some sort of very high strategic planning session and goal-setting session with the CEO.

I am an absolute fan of every single board having a strategic planning committee, and I would even like to see the naming of that change so it's not misconstrued and call it more so a strategy committee, because strategic planning is assuming that the board is doing the planning, so I think that should change.

Risk Committee. Any clients that I work with in the board architecture realm, I'm laser focused on not just the strategic committee, but also the risk committee, and I think there's this misunderstanding or misnomer out there that, "Well, that's the responsibility of the audit committee." My comment typically on that is that I'm not disputing by any means risk as it relates to finance, but the number of risks that are being dealt with in every organization today that require a home, especially at the board level, I don't think any company can get away with that right now…..you have to separate out not just financial risks, but overall company and organization risks.

Raza: I think as we've talked with our guests, including David Koenig, the audit committee is kind of focusing on what has happened, at the least it needs a separate time, separate mindset, a separate hat on to say, what is the future possibilities of risks, both positive and negative, in the sense that, are we taking enough risks, and hence, having a separate risk committee is likely the best way to drive that.

Mark: Well, I would love to see more of a formal approach as it relates to education and certification or risk areas for a board. David Koenig has done that with the DCRO.

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Todd Sears is the founder and CEO of Out Leadership, the first company in history whose sole product is LGBTQ+ equality. Todd has spent over 20 years working at the intersection of finance and equality. He began his career as an investment banker before joining Merrill Lynch as a financial advisor. There, he brought almost $2 billion of new assets to the firm from LGBTQ+ couples and nonprofit organizations. In this episode we talk about Out Leadership, its role as a B Corp, merging business opportunity with diversity and the impact of Out Leadership on LGBTQ+ Equality. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions here. Links

Todd Sears Bio

Out Leadership Website

Visibility Counts – Corporate Guidelines for LGBT + Self-ID

Visibility Counts – The LGBTQ+ Board Leadership Opportunity

OutQOURUM 2022

Quotes

Founding of Out Leadership

“I ultimately ran diversity strategy for Merrill Lynch and then I was head of diversity of Credit Suisse, and then in 2010 I actually was laid off and was sitting on my sofa with the severance check and multiple martinis.

As I found out, all good ideas come from a martini or two. I thought back to the opportunity that I had at Merrill Lynch to, by virtue of creating a business initiative in a very old-school command and control Irish Catholic investment bank like Merrill to support LGBTQ+ equality from a business perspective, and I thought, "Well, could I do the same thing, but with more companies, not just one?"

So, I looked at Davos World Economic Forum and I thought, "If I could I create that conversation in the LGBTQ+ community?" Because 12 years ago, you did not see businesses speaking up on equality. CEOs were not using their platform and their voice and I wanted to create that, so I used my severance check, started our first summit in March 2011 hosted by the CEO of Deutsche Bank and we had bank of America, Barclays, Citi, Deutsche Goldman Sachs and Morgan Stanley and then grew from there.”

Work with Equilar with OutQOURUM

“A key piece of the conversation is having the opportunity for LGBTQ leaders to self-identify, and Out Leadership almost five years ago wrote the first research on self-ID globally in partnership with Ropes & Gray. We found that companies asked their LGBTQ employees to self-identify in 38 countries globally, but at the same point at the board level, it is still completely absent.

David has used that data, the research, and actually the policies that we've written to try to identify more LGBTQ board members in the Equilar database, so that we can start to expand that pool of diversity.”

LGBTQ and the definition of Diversity

“I'm interested right now in particular, AB 979, the California law requiring board diversity. We were a part of, from the drafting perspective, believe it or not, when it was first introduced, the definition of diversity did not include Asian or LGBTQ, and so Ascent Pinnacle and Out Leadership and Quorum worked to have both of those diverse categories added.

But interestingly now, AB 979 is under attack. The State of California is being sued and our leadership is one of the expert witnesses that is testifying to try to protect a law increasing diversity, which is just baffling to me. Every piece of research shown that that shows LGBT and broader diversity bring innovation, de-risk all of the reasons you want diversity on the board, so to be anti-business and sue against the law that seeks to create that, just blows my mind.”

“The United States Congress had three different bills focused on diversity in 2021. Not one of them, when it was introduced into the committee, included LGBTQ and we had to advocate and we were able to get LGBTQ added to all three of them, including a board diversity one and ultimately I testified to Maxine Waters' House Financial Services Committee in November about all of these exclusions and why it matters for LGBTQ people to be included at all these levels of diversity.”

On B Corp and Out Leadership

“Why that matters in my opinion is if I was going to sit with CEOs, and we've worked with over 800 now over the last 12 years, if I was going to sit with a CEO and say that LGBT equality is a business issue, I need to be a business too. It's very different to have the nonprofit warm fuzzies, as we said earlier, conversation. If I'm a business, I pay taxes just like they do. I have to grow just like they do. We reinvest our profits. That's, to me, an important story.”

“the most important piece of the B Corp rating is what are you actually doing, and that's something I think it's really important and I think it's why so many more companies are looking at the B Corp status. There are a number of companies that are looking to convert to B Corp not just the Ben & Jerry's and Patagonia are B Corp, but there are significant numbers of corporations that are considering it now.”

Out Leadership, Tools and Research

“One of the tools that Out Leadership built almost six years ago was our corporate guidelines for board diversity, and we include in the back of that, an actual matrix that is inclusive of all the elements of diversity that we recommend, both acquired and inherent diversity, skills, background, national origin, all of the pieces, and I encourage private companies to think about that and to use that as they're thinking about diversification of their boards.”

“Our Quorum initiative last year launched our first ever Quorum Summit. Out Leadership has summits annually in New York, London, Hong Kong Paris and Sydney, but with our talent issues, we built a summit as well and last year's summit, we launched the first ever LGBTQ board research called Visibility Counts. This year on March 22nd, we'll be launching the second annual Visibility Counts piece of research.

There are a couple of key pieces that the most important last year and I think this year is that we did map last year of the Fortune 500 on their board diversity policies. That was the first time that it had ever been done in history, by the way, and not just LGBTQ, we mapped across race, gender, ethnicity, orientation, veteran status, disability status, et cetera.

This year's report, we are mapping the Fortune 1000 and the entire NASDAQ so all 5,300 listed companies on the NASDAQ. Now, I will point out that the NASDAQ doesn't even have that data themselves. We went to them first and asked if they had it and they don't. We did it for them and the Fortune 1000 as well.

I can give you a quick little preview. Only about 2.4% of NASDAQ companies include LGBTQ and the definition of diversity and only about 15% even include gender, so they've got an awful lot of work to do, which I think is why Dina wanted to make this an effort and they've put it over time. It's not just a point in time. They have, I think, a four-year lead in, but they've got a long way to go, which I think is going to be surprising when we release the full report.”

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David Chun is the founder and CEO of Equilar, one of the most trusted names in the corporate governance community. He has been recognized as one of the most 100 influential players in corporate governance by the National Association of Corporate Directors (NACD). In this episode we discuss how the Thanks for listening!

We love our listeners! Drop us a line or give us guest suggestions here.

Links

Equilar website: https://www.equilar.com/

Equilar Diversity Network: https://www.equilar.com/diversity

As Corporate Boards Pursue Diversity, Director Training Programs Spring Up:

https://www.wsj.com/articles/as-corporate-boards-pursue-diversity-director-training-programs-spring-up-11640946604

Quotes

Founding of Equilar

worked in investment banking for DLJ (Donaldson, Lufkin & Jenrette), and that was really the transformative experience for me to really learn about data, what's out there. I spent a lot of time going through SEC filings and recognized that, "Hey, there's an opportunity to potentially build the business around this data.

In '97, my wife and I moved out to California to help open up the DLJ Menlo Park office right in the heart of Silicon Valley, and when you're out here, especially in the late nineties, everybody wanted to start a company and so I said, "Hey, it's not going to get any easier for me. Let's go ahead and let's give it a shot."

It looks a lot easier from the outside, but kind of once you get in you'll realize, "Wow, it is hard." That's the reason 90-plus percent of businesses never make it beyond a couple of years.

I just happened to be at the right place at the right time with the executive compensation data that is essentially the foundation of our business.

Raza

David, Joe and I have often talked on this podcast that the old excuse of "we can't find enough qualified" candidates is no longer really available, and I think what you're doing is the last mile step in bringing that to fruition!

David

It's big data opportunity where there are, like I said, 1.2 million candidates. Having a lot of data is not the answer. The key is getting to the right data as quickly as possible, and so literally when somebody says, "I can't find candidates," I say, "Hey, do you have 10 seconds?"

You can get binders of information about women, but if you're not able to figure it out how you may be potentially connected to that individual, those binders and those lists are not that valuable because what people are looking for is not only to show me candidates, but is there some level of connectivity to them?

Rate of increase in women directors of public companies

The rate of change is pretty much at parity now, so its one-to-one so as new board seats are being refilled, roughly a 50/50 balance, and we should reach parity by around 2030.

Big Ideas/Thoughts

We mine the compensation that's disclosed in annual proxy filings. We also have our proprietary survey where we collect data compensation, that data that companies provide as part of a broader survey, and we've got close to a thousand companies that use our data for various benchmarking purposes.

You'll see us often cited in The New York Times, the Wall Street Journal, CNBC and others, where they're looking for pay statistics

We have over just across 1.2 million profiles in our dataset of anyone who's been an executive or board member of a public company, private company non-profits and others, and so we are excited about how that's become, also a way to better serve our clients. As we all know work diversity is a very hot topic right now on the agenda of every board, public, private, nonprofit, and others.

Within our BoardEdge product, we built up the Equilar Diversity Network where we partnered with over 50 different organizations to help match the demand and the supply for diverse talent,

We also allow people to claim their profiles, so people have gone in, they've enriched and particularly added important metrics like their ethnicity or their sexual orientation and disability, veteran status, because what we want in a company, we want to make it much easier for our corporate clients and search firms and others who use our database to find these candidates.

Partnership with NASDAQ

That's when we found out that this was happening, and what we feel really great about is that since NASDAQ was using our products and they had this big vision of what the big broader ESG vision and my guess, and I don't know this for sure, but behind the scenes over at NASDAQ, when they were putting this together saying, "Hey, if we're going to go out this and ask NASDAQ-listed companies to set a new standard, how do we help them?" And I think that's honestly maybe where Joan said, "Hey, we've been using Equilar. It's a great database. Let's work out some type of partnership with them."

So, yeah, we're honored to be part of that, to be working with them with all of their listed companies, and NASDAQ being technology is very focused on ESG. It blends in well with both what we're doing. They're able to offer to their companies, "Here's a resource. If you don't have the requisite diversity or you want more diversity, here's a place you can go to get it."

We talked about earlier was one of the things that really strikes me is that one of the great strengths is that you can enhance the database of virtually any other company, so they don't see you as a competitor to them. executive search, private equity well, of course they have their own database any relationship-based business where relationships play a critical part of one's offering.

we have our network center, and so that's where our clients are maintaining their pipeline of candidates. So ,every quarter, when a nom/gov committee meets, they can export that and they can be assured that everything has been updated

Without question, the tragic events that have happened, let me show you the dates. It was summer 2020 with George Floyd and the whole Black Lives Matter movement, and that was a wake-up call for corporate America and just recognizing, "Hey, have we done enough? What are the things that we could do differently?" the rate of change has probably doubled so that's a pretty substantial increase over a year.

A lot of boards really took that to heart and there's been a big push to bring. African-American and Black individuals into the boardroom, so that's tremendous progress there. I also would add to that, about four or five years ago, we launched the gender diversity index, and so we're looking at the rate of women on boards. When we looked at this, when we first calculated, I think it was like fall of '16, beginning of '17, I don't know if I'm getting the dates right, roughly 25% of the Russell 3000, so over 750 companies did not have any women on their board

Wow.

And it wasn't that long ago.

They shared it with me, I said, "This can't be right. We can't publish this. I’ve got to see the data," and so they shared the file with me, and I started going through them. I didn't go through all 750, but I went through about 20 to 30 of them, and I'm like, "Oh, my God, this is right. This is really the state of play.

this stunning statistic that over a million men joined the labor force last month that are taking a job or looking for one compared to only 39,000 women. What explains it then? How does that fit into the diversity push in general?

Yeah. To be able to fill those board seats, you're going to need to have a pipeline of women executives that are going to be quote unquote "board ready." And if you're not having as many women coming back into the workforce, that pipeline is just going to get thinner and thinner.

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Roberta has been a CEO, a founder-entrepreneur, and a corporate executive as well as a highly experienced board member who has served in executive and board leadership positions on a variety of private, public and non-profit boards. In this episode, we talk about the vital importance of board governance – and how valuable it can be to any company or organization.

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Links

Roberta Sydney LinkedIn

National Association of Corporate Directors

Private Directors Association

American College of Corporate Directors

Women Corporate Directors

Extraordinary Women on Boards

Quotes

Most important issues facing boards today

The first and second issue facing boards today revolves around human capital. I would say top of mind is still employees and employee safety. Who are we hiring? How are we making sure that they can get their work done productively, safely? How do we onboard new people in this remote environment? How do we develop people? That's number one, and I would say is number two is employee retention.

Then third is around culture and strategy because, culture will eat strategy for breakfast. And so, boards need to ask--how do you create, enhance, grow the culture that you want and how can you be sure that that is the lived culture when people aren't together as much as they used to be.

Big Ideas/Thoughts

The pandemic has exposed many warts on strategy. What kind of preparedness did we have in place to handle a crisis? Was there sufficient succession planning? Where have we created risk by not acting?

The pandemic to a great extent has also exposed the warts on the governance practices of many private company boards. For example, boards have needed to ask--who do we have on our board now that can help guide us in ways that are going to make a difference? The first step is often updating or developing a skills matrix, to evaluate board composition annually and answer the question--what skills do we need on our Board for the next three to five years?

Good governance is good governance and there are best practices even though they still must be tailored to company stage, company size, and industry complexity. If you lack basic governance structures and procedures, it's very difficult to be effective.

On the boards on which I am privileged to serve, we develop what we call a decision matrix. It's helps define the “swim lanes.” What are the decisions management makes? What are the decision that need to come to the board? What are the decisions that owners should make? Getting clear on these swim lane issues has been very, very helpful in setting the ground rules for how we can all engage together and move this business from where it is today to something even better

Board education is particularly important. There's no substitute for directors, especially those that might be less familiar with board practice, to learn and be open to learning about what a good board agenda or a what a good committee agenda looks like. What kind of risk management should the board be doing? What would be an enterprise risk framework look like for a business like ours?

Almost anything becomes possible if you open your mind to say: “we're going to make better decisions and get better results because of the governance that we're putting in place here.”

Stakeholder Capitalism

The mission of the organization matters now more than ever. Employees want to do something that matters, and they want to be somewhere where they're solving problems or delivering a service that that is helping meaningfully. Every company today is trying to figure out a way to make sure that it has a mission that resonates with both its employee base and its customer base.

Long-term financial viability relates to ESG - environmental, social, and governance - and big institutional investors are giving that message to the companies in which they might invest – that message is an important catalyst in driving this agenda forward.

When consumers boycott Uber because of business practices or when consumers say I don't want to own the stock of Exxon - these are signals, strong, strong signals that companies need to heed and re-engineer how they're conducting business.

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Alexander Lowry is a professor at Gordon College in Wenham Massachusetts where he is the Executive Director of the Master’s in Financial Analysis program and the creator, voice and driving force behind ”Boardroom Bound” - a weekly podcast about boards of directors, how to become a board member, how to excel at the job and the important impact that boards have on business and our society.

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Links

Alexander Lowry Bio

Gordon College Masters of Science in Financial Analysis

Recommended Books

Authored by Boardroom Bound Guests

Governance in the Digital Age/Dottie Schillinger

Dare to Serve/ Cheryl Batchelder

Be Board Ready and Behind Boardroom Doors/ Betsy Atkins

Boards That Lead/ Ram Charan, Dennis Carey, and Michael Useem Authored by On Boards Guests

Family Business Handbook - How to Build and Sustain a Successful Enduring Enterprise/Rob Lachenauer and Josh Baron

The Board Members Guide to Risk/David Koenig

High Performance Boards/Didier Cossin

Startup CEO: A Field Guide to Scaling Up Your Business/Matt Blumberg

Our Common Ground: Insights From Four Years of Listening to American Voters/Diane Hessan

Quotes

Boards are one of the most important things in the business world and people weren't talking about - that’s what led me to start Boardroom Bound.

If someone says, "Help me get a board seat," that's like saying, "Help me get a job.” I don't know what to do with that. What industry you want to work in? What size of company? Is it compensated, non-compensated, public versus private? There are all these sorts of things you have to help me figure out to know what you should do, and it only then that I can even begin to start giving you guidance. It’s as if I went to you guys and said, "Guys, help me get a job," you’d say, "What does it mean?"

Even after you have given some thought to getting a board seat, I would test you a little bit. All right, so tell me what's most important. Is it the compensation?" And some people would say, yes. I appreciate their honesty, but that's not a good driver for it. "But okay, if it is the compensation, what do you think you're going to make in what are you trying to do?" "Well, I want to be on the board of JP Morgan and make $250,000 a year." I'm like, "Hmm. What kind of size company did you work in?"

”I worked at a bunch of startups." "Well, that's probably not realistic. Let's take what you came up with and let's talk about reality. You're probably not going to be on a board with a company cap size bigger than where you’ve worked before.

If, for example, you have only worked in private companies, then you should focus on that. There are lots of different opportunities there. I would take exactly what you said, Joe, let's dive into it a little bit more, make sure we're all coming from the same page, and then you can come up with a game plan to do it.

Once you've got that, okay, networking is going to be a big part of it. For some people that's a dirty word. It doesn't need to be a dirty word. How big is your network today? Do you know people who are on boards? Do you know people that service boards like accountants and consultants and lawyers that can be helpful for you? And then how much time will you spend every week? Are you going to spend an hour a day? Are you going to spend an hour a week? Now, a lot of that's going to predict how long it's going to take for you and how successful you will ultimately be.

Big Ideas/Thoughts

Being a Board Member is a job

Joe Some people don't understand that a board seat is a job. Some people think it's kind of a nice thing to do when you retire or in your “spare time” but in fact, it's a job and you need to take it as seriously as you would any other job.

Accepting a board seat

I think most first-time board members will usually jump at the chance to be on any board, and that is not a great idea. Someone has worked really hard to land a paid board seat. That was their dream, that was their goal, and they made it happen. You're super excited, this is amazing, right? Well, it doesn't mean you should take it. Think about this as like you're applying for a job. Just because you get a job offer doesn't mean it's going to be a fit. Is this a place where you're setting yourself up for success? Can you do this? Do you want to do this? Boards are very different from each other.

Some boards rubber stamp what the CEO comes up with. Is that the kind of board you want to be on? If so, great. Know that other boards are very collaborative, very open, very discussion oriented, very much about coming up with a strategy that helps the organization. Is that the type of board you're going to fit in with? Is that the kind of the space you want to be in?

Due Diligence before accepting a board seat

An example of doing due diligence: A guest was offered her first board seat, and she had worked really hard to get it. She was excited about it, it was a public company, it checked all the boxes, but she didn't feel comfortable. She went through the interview process but had that little person on her shoulder telling me “there's a danger here, Will Robinson” - think about this."

Here’s what happened: She offered: "Let me sign some NDA so I can sit in one meeting. I won't vote. I'm just sitting in the back. I want to observe. I need to observe." And they thought she was the right person, so they agreed to this. I don't know why. She actually saw a fistfight break out during the meeting. She's like, "I knew this was not the place for me."

That's an extreme version of due diligence. The point is you want to be on the right board for you because you will do well. And if you do well, that will lead to other boards because the people you're sitting and working with will inevitably also be connected to other boards and they'll know, "Oh my gosh, Johnny over here was phenomenal. I should think of another opportunity." But if you stink it up in the boardroom, you're not going to get another one.

Bo proactive about onboarding

Alexander

Isn't it terribly ironic that companies spend all of this time and energy and money trying to bring someone on, but don’t didn't treat a bioard members the way they treat any normal employee who they hire.

Joe

Yes, ironic that people, boards, organizations spend so much time recruiting and then they drop the ball with onboarding and fail to get full value out of this person.

Alexander

If you think about this whole onboarding process, show up at your desk, all the stuff is laying there and you come to a certain training and meet all the people. Often, in the boardroom, it's, "Well, you know what you're doing. We'll just throw you in, come to the next meeting and you'll be great." That's not setting anybody up for success.

If your company is not taking it upon themselves to do a proper onboarding process, make sure that you are doing it to set yourself up for success.

Governance in the Digital Age: A Guide for the Modern Corporate Board Director

Behind Boardroom Doors: Lessons of a Corporate Director

Dare to Serve: How to Drive Superior Results by Serving Others

Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way

Our Common Ground: Insights from Four Years of Listening to American Voters

Startup CEO: A Field Guide to Scaling Up Your Business (Techstars)

High Performance Boards: Improving and Energizing your Governance

Harvard Business Review Family Business Handbook: How to Build and Sustain a Successful, Enduring Enterprise (HBR Handbooks)

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After a fascinating career at Goldman Sachs, Lisa Shalett “retired” in 2015 - and two years later started what has become Extraordinary Women on Boards, EWOB, a peer-to-peer community of hundreds of women directors from the US and around the world, focused on advancing board excellence, modernizing governance and increasing board diversity.

In this episode Lisa talks about how Extraordinary Women on Boards started, how its membership exploded and how it has become an extraordinary force in advancing diversity and excellence on boards.

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Extraordinary Women on Boards (ewobnetwork.com)

Lisa Shalett LinkedIn

Quotes

When I look back on my somewhat eclectic career, twenty years of which were at Goldman Sachs, there were a lot of things that I did that ended up preparing me for what has become Extraordinary Women on Boards…it's funny how my background danced in and out of risk-related topics and content-related topics and suddenly here I am spending a lot of time on those issues.

How Extraordinary Women on Boards came about

Extraordinary Women on Boards was unplanned, and after a career of paying attention to pain points and wish lists and identifying opportunities that largely comes from covering really important and smart clients, I found myself in a situation where having "left the building," so to speak, wandering the streets of New York, I was meeting a number of women who were at the same life stage that I was then at: having stepped away from an accomplished career and trying to put together, I think what we call portfolio careers or portfolio lives.

I was very lucky to, quite unintentionally, end up on two boards, a public and a VC-backed board, and the women that I was meeting were also starting to serve on boards as part of their portfolios, and I found it quite amusing that the most interesting thing that these women would relate to in my background was that we were all on boards and we were all starting our board careers.

That led to 15 coffees in a row on the topic of boards, and in particular, a few needs and pain points that just kept emerging that led me to believe that I should bring this group of women who were all board directors together to meet each other.

What I was hearing during was as follows; number one, women board directors wanted to meet more women who were already on boards. Often they were the only woman on their board at that time. That was in 2016, not that long ago, and the first meeting of what became Extraordinary Women on Boards, even though intended as a one-off event was in the beginning of 2017.

These women wanted to talk about their board work. It's not enough to have to claw your way into the board room, you want to be excellent in the boardroom. You want your board to be excellent. And there was something so inspiring about women who wanted to talk with other women board directors in order to just crush it in the boardroom.

One of the other things that I was hearing was that despite there being many excellent forums, there was often a situation in which women felt talked over. There's been a lot of research about how that sometimes can happen, no offense to men, but sometimes that happens, and therefore these forums weren't really allowing a dialogue in the way that these women wanted.

Impact of the Pandemic

When the pandemic hit, and anyone in this audience serving on any kind of board and certainly I'm sure the two of you remember vividly, it became a serious firehose experience. There was chaos. Boards were meeting 24/7. There were risks that folks were aware of, but that suddenly were all happening at the same time, and no one had really thought about the convergence of all those risks. And then there were completely new risks and issues on the table that no one had ever really discussed before, and so there was a tremendous need to get together and have discussions and really curate those discussions.

I remember one of the things from those days was there was suddenly so much information available. Your board was meeting all the time. You wanted to stay on top of everything. You only had kind of a tunnel vision of what your board was focused on, so it seemed like a compelling opportunity to bring people together, to compare notes, to get a horizontal view, and focus on all of these new risks.

It's funny, I’ve sat in the same room, for now it feels like two years, and met through Zoom hundreds of truly extraordinary women, and we all would get together and have fantastic discussions. The goal was to leave the Zoom even smarter, go back to your boards and be even more influential, bring really good insights and figure out what the emerging best practices were going to be.

What Extraordinary Women on Boards Offers

We offer educational sessions that are really interactive, engaging Zoom sessions on important topics for board directors, and they're not topics that are discussed everywhere in the same way. We really try to come up with an interesting angle, always yielding, per my Goldman training, “actionable insights,” and what are the questions that you can bring back to your boardroom.

We also curate a newsletter every week, which really scans the environment quite eclectically for articles that ought to be relevant for board directors and why. We have meet-and-greets so that people can still meet each other in Zoom, and we came up with a great format.

We also try to find our members board opportunities because one of the pain points that we've heard emerge is that, despite what you're told- which is once you get on your first board, it's easy to get on subsequent boards - that is just not true. We love when people looking for diverse candidates reach out to tap our community of experienced directors.

Creating an environment to really learn

I mean, my gosh, you've had a successful career, but sometimes in the context of board work, especially if you're new to boards, there are some super basic questions. You shouldn't feel embarrassed to ask those questions. Everybody has those questions. And so creating an environment where there's immediate respect, you feel included, you feel welcomed, and there's an assumption that we're all going to learn from each other, I think that's what helps the magic to happen.

One of the things that happens with Extraordinary Women on Boards is that we feel as if there are these really smart questions that need to be asked. There's new information or best practices in this world of emerging best practices that the boardrooms need to hear. You can then go back to your boardroom and feel confident that you've got an insight that maybe the rest of the board might not have.

Big Ideas/Thoughts

I often think there's so much effort put into finding a board director and not enough effort put into onboarding, as you mentioned. There needs to be much more intentionality around that because that's going to make or break the success of that board director. And especially when they're diverse, you want them to be successful, but to make someone feel like an only and just say, "Great, here's your seat," is not enough. Boards have cultures, and it's so interesting to think about the dynamics in the room -- so how are you setting the board up for success by bringing on any new member? It's incredibly important.

It's so interesting because when someone joins a board as a new board director they might be a very experienced board member on other boards, but they have joined a new board and there's this weird dance that happens where someone doesn't want to be so presumptuous as to immediately start asking questions, even though they might be incredibly thoughtful. There's a whole “beginner's mind” thing that you don't want to ruin the newness of somebody's observations. You want to solicit it. So few times do boards solicit that from new board directors, "What are your impressions? How do you think about that?" There's such an opportunity for feedback that's missed - what a waste!

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Bob Rosenfield was the CEO of the second largest company in the $4 billion US auto glass repair replacement and claims services market, and during that time he learned that “it isn't as hard as you think to do the right thing and doing the right thing can be very good for business if you do it right.”

He has since founded and is managing director of Cape Vista Capital, a family office investment entity focused on renewable energy, sustainability and broadening the availability of housing, healthcare, and a healthy food supply chain. The goal: to realize excellent returns on investment and to use the leverage of Cape Vista’s investments to change the shape the environmental issues that we have created.

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The Energy Switch

Global Impact Investing Network.

Global Impact Investing Principles

Cape Vista Capital

Quotes

Capitalism messed this up, capitalism can fix it.

My first experience with impact investing (while a CEO in the auto glass industry) was a tremendous learning experience in two ways: number one, it isn't as hard as you think to do the right thing, and number two, doing the right thing can be very good for business if you do it right.

What we see now are vast billions of capital being deployed in an effort to fix problems created by the prior model, which considered all this stuff in externality.

Our public equity investments are really segment investments in renewable energy, for the most part, in companies that we think have been and will continue to be more committed to going from fossil fuel energy generation to renewable sources. It's kind of that simple in the public equity space.

We have found that companies that are engaged in combating climate change are finding the cost of capital in issuing private bonds to be desirable for 5% and we've made several investments in solar and other combating climate change items or initiatives that help us generate a solid present income and yield.

Big Ideas/Thoughts

Bob Some people are still going to believe they could get better than market returns in non-impact, so I think we still need to label it as such, but least in my opinion regular impact investing and non-impact investing are truly converging. Companies that do not pay attention to what were previously called “externalities” will be outcompeted in the marketplace, so in that way, it's fundamentally capitalist driven.

Raza I think, as you have said earlier, the externalities are realities, and I hope that the two worlds keep converging and I think that you're rightly pointing out that that's the fix of the capitalism, that capitalism actually needs to do.

Joe The “holy grail” is to be able to do the best thing for the economy, for the environment - for whatever area in which you’re involved - and also have it be good for your business, because the financial incentive is going to drive people to do “the right thing.”

Engine No. 1

The whole Engine No. 1 issue is: "ExxonMobil might be paying a 9 or 10% yield now, but if I hold this stock for 30 years, as opposed to another energy company that is paying attention to the future and doing better things, I'm better off with an investment elsewhere.”

There are three things that Engine No. 1 did. First, in general point out that having a carbon-based, fossil fuel-based strategy might just be a losing strategy as an economic argument. But they did two other things to sort of turn that viewpoint into action, and I thought they were really valuable and important lessons in both.

They engaged with the Wall Street analyst community because there were institutional investors in there that couldn't decide, do I go left, or do I go right? They helped quantify in the financial analyst community, how do you run the numbers? I mean, every securities firm that has an analyst that follows a company is going to do a 5-year projection or 10-year projection, discount it back, the stocks are undervalued the stocks are overvalued, so they engaged with the analyst in the meantime and pushed them, "What are you doing with these numbers? How could you project that up? That's not likely. Here's why."

They also partnered with another firm, and the business proposition of their partner basically says: "Come to our website, and instead of giving us 100 bucks to support the cause of environmentalism, spend a $100 to buy a share of ExxonMobil and let us vote this year for you." It's democratizing the voice of stockholder constituency. I thought that was really, really, really smart tactics.

The Energy Switch: How Companies and Customers are Transforming the Electrical Grid and the Future of Power

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Episode Description

Joe Hurd is a public and non-profit board director and early-stage investor. As an operating executive, Joe is the Operating Partner at SOSV, LLC, a $1B early-stage venture fund, where he leads strategy and business development efforts for the fund’s life sciences, deep tech hardware and mobile portfolio companies. In this episode, we talk about how technology is impacting every business and differences between US and UK boards

Quotes

My role as an operating partner of SOSV is to work on an ongoing basis with six or eight of our top portfolio CEOs. I tend to focus building on my 20 years of experience in digital media, on strategy, corporate development, business development, sales, and helping them penetrate the market. We want entrepreneurs that will make the world better.

“Deep tech” is a phrase that's come into vogue over the last three or four years, and the focus is on technology companies that combine three things. The first is, for our purposes, hardware manufacturing, something tangible, something that you make, something that requires engineering and engineering skills, and then there is software. And, most importantly, mission and purpose -these are companies that are solving problems where it may not be clear for another 3, 5, 7, 10 years, whether you're actually on the right path.

UK PUBLIC COMPANY BOARD vs US

When you're a director of a UK public company, you need to think about all of the stakeholders of that company, not just the investors, but the employees, the suppliers, society as a whole. I had to really take a step back and put my legal hat on for a minute and really understand what the fiduciary duties of a director are and work the interests of all the stakeholders into my decision process when I was in boardroom conversations.

The first and the biggest difference between the US and UK is when you look at how governance is approached in the United States, it tends to be, as I alluded to earlier, shareholder first. You have fiduciary duty as a director to the corporation, the shareholders, sometimes the creditors.

In the UK, it's much broader. It's more of a stakeholder-first approach where you're looking at, not just the investors in the company, the shareholders, but also the employees, the suppliers, the customers and society as a whole. The UK corporate governance code actually enshrines this in law and regulation where it is a very broad principles-based approach to governance as opposed to a very specific rules-based approach that you get in the United States.

It's hard to say whether the UK is better or not better, but it seems to me if the law has codified the need to take into account all stakeholders. If the law has mandated certain kinds of diversity, gender and/or racial, I would say that is better. I don't think it is just reflecting what your cultural background is. It would seem to me that that is better because it forces those companies to move in a direction that is likely to make them stronger, is likely to make them more responsive to their stakeholders - and that is a very good thing from a capital point of view at the end of the day

Employees Voice in UK

In the UK, they have said that directors and boards of directors have an affirmative obligation to reach out to the employees and bring the employees' voice into the boardroom, whether they nominate a director to be the workforce net designate or even bring employees on the board in some cases. The code says that either one of your directors needs to be explicitly designated as the director that interfaces with the workforce or, if you want to take another model, you can bring employees onto the board and bring the employee voice in in that way.

Compensation for UK companies

Part of the corporate governance code required that directors of UK companies are paid a salary. There is no equity component to the compensation and that is in keeping with the independent maximum, that you're not running the company for the benefit of the shareholders only. There's nothing stopping me as a director from purchasing shares, provided that you adhere to the relevant purchase windows. So, that's a pretty big difference between US and UK boards.

Big Ideas/Thoughts

When I say: “every company's a technology company,” what I mean is that over the last 20 years technology has become so pervasive as to how companies operate that even if you're involved in a non-tech sector, you still need to integrate, rely on and be mindful of companies that have more of a tech-focused approach than your company.

Whether it's brick or mortar retail, travel or leisure, or oil and gas, companies are now realizing that technology is integral to all parts of their business: how they measure the business, how they measure productivity, how their competitors are able to scale and acquire customers, how they are using HR to bring benefits to the companies - technology is a factor in virtually every facet of their business.

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Rob and Josh are each co-founders of BanyanGlobal Family Business Advisors which advises family owners on business, finance, ownership, philanthropy, and a wide range of other issues. They are each leaders in the field of family-owned business. They recently co-authored the Harvard Business School publication: “Family Business Handbook: How to Build and Sustain a Successful, Enduring Enterprise.”

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Why the 21st Century Will Belong To Family Businesses

Build a Family Business that Lasts

Order the HBR Family Business Handbook

Quotes

Family Business Myths/Facts

Myth: Family businesses don’t really matter.

Fact: “About 90% of all businesses in the United States are family owned and they account for about 50% of all employment.”

Myth: Family businesses don't last, after three generations, they're doomed to fail.

Fact: “Family businesses last longer on average than other forms of ownership. Some of the longest lasting and most successful businesses in the world are family businesses. Why don't Americans know that?”

Joe: Josh, why do you think that the myth that family businesses are less successful, that they never get beyond the third generation, why does that persist?

Josh: It's a great scare tactic, I think you keep hearing it is because people want to tell you, "You're doomed to fail and therefore you need my help to be able to overcome it."

Myth: Family businesses are rife with conflicts - family members are fighting and suing each other and just can't possibly get along

Fact: “Most family businesses struggle not from having too much conflict, but from too little conflict, because it's really hard to raise some of these issues about fairness and compensation and all the things that come in as being part of a family business.”

Rob: It's strange, but the celebrity or the business celebrities, when I went to business school, Jack Welch, and he was making a brand for himself. Now, it's Bill Gates or Mark Zuckerberg at Facebook or Elon Musk at Tesla. They seek the publicity. I would say most all of the family business that we know the owners, they shy away from publicity. They don't want to be the face of their family business. They actually know the downside that can come with that.

Josh: Most family businesses are private companies and the word "private" is there for a reason, that they don't want to be public. They see advantages in being below the radar. I was visiting a family business recently in a state out west and I drive up to the headquarters and I was like, "That can't be it. We must have the address wrong. That can't possibly be the headquarters of a billion dollar company." And of course, it was.

“One of the amazing things about family businesses is that they can break the rules in a way and practice business in a way that is fundamentally different than other companies.”

“Family business owners can, if they choose, own it for their whole lifetime and maybe set it up for their next generation. It's the difference between maybe renting an apartment or even being in an Airbnb overnight - you're day trading versus owning a home that you're hoping to bequeath to your children.”

Unlike other companies, family businesses actually talk about longevity. How often do you hear companies outside of the world of family businesses talking about how many generations do you last? Do we put like a second or third generation as if that's just a low number, but then you have to multiply it by 20 or 30 years and you realize that a third-generation family business has probably been around for a hundred years.

Josh: People say: "Oh, most family businesses don't make it for a hundred years and therefore they're doomed to fail." I'm like, "No, no, most businesses last for under a year, maybe five years."

Joe: Their success is actually used as a way of talking about their failure when it's not really a failure at all.

What we find in family businesses is that core decisions are really made at the owner level in family businesses, not like publicly-traded companies. If you don't like what's going on at GM, you sell GM and you're out and it wasn't really hard to sell. With a family business you're in. So, you're going to work really hard to make the owner decisions the right decisions.

The rights that come with that ownership are profound, the ability to influence the company in ways that are positive and negative are fundamental and learning how to effectively step into that role as owners is essence of the work that we do and the essence of the book that we set out to write.

If you're working in a family business or if you're on the board of a family business and you don't understand the owner strategy, like what trade-offs they're making, you're going to be very surprised by the decisions that are coming your way.

Leadership Transition

If you've been in this position of leading a family business for decades, maybe your entire adult life, you're not just going to quit that and play golf. In most cases, you need some place to land, some place to go to…. to give that up, it's super scary. It's psychologically very challenging for some people.

Joe: One of the things we talked about earlier … for the person that's been running the family business it is not just a job. It is his or her identity because they're really living their job. I think that provides a perspective of why it's so hard to let go.

Rob: That's a great point. It is their narrative and maybe it's been their narrative since they were five years old, is that they wanted to be the controlling owner or CEO of their family business, and their narrative probably never got to that final few chapters about how they're going to relinquish control over time.

Some do it, and some do it with such aplomb, it's really quite amazing. We're trying to learn from those people about what it is that gets them to the other side of that transition.

Getting to the next generation, the hardest thing often is the current generation! It's like letting go of the reins and really talking. We have some clients who it's fairly easy for, but they're the exception.

“One of the hardest things to get right in a family business is family employment. One of the things that causes the most conflict in a family businesses is who gets a job, who gets paid how much, who gets promoted, who gets the CEO spot. And it's really hard to navigate those issues.”

“Once your (family) business gets to a certain size, the value you get from the right independent directors is almost always going to be worth the time and investment that you make into them.”

Big Ideas/Thoughts

The kinds of things that family businesses are able to do in terms of investing in their employees, investing in their communities that they believe and see paying off in their company, they would never be able to do them if they had to focus on quarterly earnings.

It's so interesting, when CFOs come into family businesses from public companies or from private equity, they have to be retrained, just retrained about what the priorities of the family owners are.

Managing Expectations

Another one of the things that people say about family businesses is that families grow faster than businesses, so therefore a family business is doomed to fail because at some point the size of the family will outstrip the ability of the business to support it. That's where expectations come into play because that's a choice. Should family members actually expect to live off the business or do you expect them to find other ways and treat the dividends they get as a nice bonus to buy something, to buy a new car, or maybe if it's a great year, to get a new house, but not to treat it as sort of like the foundation of the family living on.

The Wall Street Journal is a great example of expectation driving decisions. The family (that owned the WSJ) lived off of a very profitable business, a growing family over time. And then as the digital age came in and disrupted newspapers, it was no longer as profitable anymore. And so the family was in a position where they either had to drastically cut their lifestyle or drastically cut the reinvestment in the business, putting them almost in a no-win position that Rupert Murdoch took advantage of and made an offer that they really felt like they didn't have a choice, but to accept.

Dividend policy and debt are two of the things that families have to grapple with, and that often leads to their demise.

Regarding debt: You go to business school, and they'd say, "Oh, look at all of the great benefits of leverage. You can get a much higher return on equity. Interest payments are tax deductible." So, you come out of business school saying, "Lever up, baby." and there are also these LBOs going on.

You go into the world of family business, and it's so, so different. Many of our large clients effectively have zero debt. And in fact, we had one client, it was in the agricultural business, and they had zero debt and they had two full years of operating expenses on their balance sheet. And we're like, "This is not what we learned at business school."

Family Business Goals

From an ownership perspective, there are three main things you might want. You could want to grow the value of the business - let's go from a million to ten million to a billion and so on. You might want to do that just because you want to be richer, or maybe you want to influence the world and you see your business as a platform to do that.

The second thing you might want as an owner is liquidity, and here we mean taking money out of the business. So, you might want to do that because you want to lead a nice lifestyle, or you want to give it away to charity. Or you want to have something that is yours and not belonging to your entire family.

And the third thing you might want is control, and control is sort of like you have it until you give it up. So, if you take on an equity partner, you are giving up some level of control. If you take on outside debt, you're giving up control because now someone else is in the room with you and has some influence over your decisions.

The most common path to building a successful family business is the mixture of growth and control. If you look at the largest family businesses in the world, most of them have been built in exactly the same way, which is that they make a dollar, and they reinvest 99 cents. They give themselves enough money to pay the bills and they put 99 cents right back into the business. They do that over and over and over again until they've built something very significant.

The growth and control is at the expense of liquidity.

Owners Room/Importance of Owner Decisions

In family businesses on top of the boardroom sits the “owner room” and here there are very few decisions, but this is about the longevity of the firm. What’s being traded in this room isn't the competency that's traded in a management room or the wisdom in a boardroom. It's actually power and influence. It's the power that if 51% of the voting shareholders do it this way, that's where it's going to go. But it's also the influence that if you stick it to your sister and she goes to her dad, oh, it may come back to haunt you somewhere else.

So what part of what we say is the owner room needs to have both the vote, the 51% we talked about, but really important to have the voice. Sometimes it's okay to be out voted if you had a voice in the matter and people have taken seriously what you have to say.

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Marcus Peacock is the Chief Operating Officer of the Business Roundtable, an association of Chief Executive Officers of America's leading companies. In this episode we discuss the Business Roundtable, its highly publicized Statement of Corporate Purpose (August 2019) and what it’s like to administer the BRT board of directors, composed of more than 20 CEOs of large US companies.

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Marcus Peacock bio

Link to Statement pf Corporate Purpose

Link to BRT website

Quotes

The purpose of the Business Roundtable is to promote policies that will result in a growing and thriving economy for everybody in the United States. We ar e made up of the CEOs of large US companies. So, if you think of a large US company, their CEO is probably a member.

The CEOs are the members – not their companies - and we help them develop and formulate policies that we think will meet the mission of the organization, and then we help them advocate those policies at the federal level - with the administration or on Capitol Hill.

The BRT is an issues organization, not a partisan one. We don't give campaign money. We don't have a PAC, but there are issues that our members care a lot about that, we think, if our policies are adopted, it'll help the economy grow and people find jobs and help out the general welfare.

Big Ideas/Thoughts

The BRT Statement of Corporate Purpose (8.8.19)

See full text below and here.

Just so people know, it states that a company, and particularly the CEO of the company, has a commitment not only to the shareholders of that company, but to the customers, the employees, the suppliers, and the communities in which that company works. Of course, there’s more detail in the statement.

In 2018, some of our members were receiving criticism from both the left and the right of the political spectrum based on a stereotype of businesses where it's all about maximizing short-term value, even if that hurt suppliers or communities or employees, and they felt “that's not the way we do business” and “we need to do something more than just push back when we see these people making these assertions.”

The statement sets a standard that is very much about long-term value, and I think some of the criticism we received may miss that point. You're not going to have, in the long-term, a thriving organization that doesn't treat its customers, employers, suppliers, and communities well. All those things are necessary.

Criticism of the Statement from the Wall Street Journal

JA: I wanted to ask about criticism that you've got from the Wall Street Journal and the pushback that you've received.

MP: They were saying, "No, this is about your shareholders. They are the people who are taking the risk. They're putting the investment in. This isn't about these other stakeholders who may have completely different objective functions."

And our response to the Wall Street Journal is “well, so you're against the long-term. You make commitments to these other stakeholders because you're trying to build this long-term value. If you're not interested in long-term value, then, yeah, go ahead and screw your suppliers, you get out of them what you can today, but pretty much from now on, they may be broken down and gone. That's a good way to get short-term value, it's not a good way to build up a company for the long term.”

Momentum Behind Change in Corporate Perspective

JA: I believe some of the momentum is driven because institutional investors who look at the failure to focus on the long term as a risk, and as long as there’s that risk, that creates a problem for the company.

MP: It does mean that, particularly for a signatory, people should be able to go to them and go, "How are you implementing [this]? How are you living up to the words that you signed on to?" And the fact is, they are.

Impact of Statement on BRT

Some CEOs who had not been members in the past have now come to us since the statement was put out and said, "We would like to join BRT." In some cases, I know the statement made a difference.

And some of the increased interest in BRT comes directly from actions our members took during the pandemic and also in the wake of George Floyd's murder. Our members have taken actions which people see demonstrate that they're living by the words that they'd signed on to.

Managing a Board of 20 Top CEOs

JA: I’d like to talk about your role as COO - one of your jobs is to manage the BRT board. Managing a board is always a challenging job but managing a board of 20-plus CEOs of the biggest companies in the US must be, let's say, particularly interesting. Tell us what that's like.

MP: Well, I’ve learned more from them than they learned from me. But for me, because they know what they're doing, in some ways it's somewhat easy, although their expectations are high.

The biggest job for me is to make sure that every minute of their time related to the board of directors is something that is of value to them - - including allowing them time to talk to each other, in a social way, which is something they do value because they don't often get to hang out with each other

Also, to make sure they're not dealing with anything that's too trivial, and that they're given the information that they need so they can have an informed discussion and come to a decision that's going to be right for them.

JA: Well, I think that’s the perfect confluence of all the things that you want for great governance: a group of people who are really good at what they do, who have high expectations, who want to use their time well, and from what you're telling us, willing to work hard at the job. They're not just showing up and show me a PowerPoint, they're really digging in and asking tough questions.

Every board, that's the challenge. You have high expectations for the board, but that means that whoever's organizing it - the chair, senior management, whoever, really needs to give a lot of thought to how are we going to take best advantage of this very valuable time of our board members.

Girl Scouts National Board of Directors

I have two daughters, they were girl scouts. My wife was their troop leader. My wife was a gold award girl scout. Her mother was there, too. I was a volunteer. It's just a great organization. They have a great mission. Their mission is to build girls of courage, confidence, and character to make the world a better place. I mean, how can you beat that? I feel privileged to be on that board.

I think that they have done a tremendous job. I'm forgetting the exact number, but I did read that a very large percentage of the women fortune 1000 CEOs were girl scouts at one point in their lives and in fact, a significant number of the members of Congress and senators who are women were girl scouts.

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Maria Castañón Moats is the leader of PwC’s Governance Insights Center and previously served as the firm’s Chief Diversity officer. In this episode she discusses the critical importance of incorporating diversity - and a clear understanding by board members of the board’s role - to achieve board effectiveness.

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Links:

Maria Castañón Moats Bio

PwC’s 2021 Annual Corporate Directors Survey

ESG oversight Corporate Directors Guide

Quotes:

“I am a woman, a Mexican-American woman, and admittedly, I did not know much about diversity and inclusion before taking the role [as Chief Diversity Officer at PwC]. I grew up in a small town in West Texas - El Paso - where everybody looked like me, so my diversity journey really started when I graduated from UT El Paso and started moving East all the way to New York. I like to share that because I don't want people to assume that I was an expert coming into that role.”

“When I was leading diversity, we would often say that feedback is a gift because if people aren't giving you good feedback, they probably don't care about you very much.”

“’Why would boards really lean into this [diversity] and really give great advice to management?’ Because that's what boards do, they give advice to management, they provide that oversight.”

Big Ideas/Thoughts:

One of my goals was getting the board of directors leadership to be more diverse. Our CEO was very open to not only diversifying the leadership team, but also thinking about how you get a more diverse board.

A question to be asked about board effectiveness is: how diverse is that board? How diverse are their experiences? And is that diversity and those experiences appropriate given the times we live in today with all the social changes, with climate, everything we talk about on ESG. How does that fit for the purpose of today and the future and not necessarily yesterday?

Board effectiveness really means “what's the value of the board to an organization.” And in particular, what's the value of the board to that management team and to that CEO? Are they really giving the CEO the right advice on strategy and the risks associated with that strategy? Are they really those trusted advisors, and then are they exercising this fiduciary responsibility to shareholders and stakeholders at large?

As you know, Joe, what investors want today is to see the numbers. I tell people when I meet with directors, it's not that they just want to kind of understand your demographics and get a baseline, but they really want to understand the goals and where you're going as an organization, then as a board, how you hold management accountable to those goals based on what metrics and data.That's what investors are looking for.

Offboarding. We need to critically say to ourselves, "The feedback is telling me I probably have given all the best I could to this board, and I should now move on, and, oh, by the way, maybe I can sponsor someone to come onto this board. Maybe that's the last big thing I can do here, and maybe it's someone that's not from the familiar network, someone I've been mentoring to get onto a board."

What I think that's different when you think about climate versus diversity is we've been talking about diversifying boardrooms and management teams for decades, and that pace has been, let's just say, unacceptable, until recently. There's a need to accelerate that pace of change. With climate, it's going to accelerate much faster, people want to see change much faster. We’re not going to get a ten-year timeframe to act on climate change and related risks.

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Michael is the CEO of Foxford Capital a strategic financial advisory and investment firm. He is also a General Partner at Eastward Capital Access Fund, a late-stage venture debt fund, serves on several Boards including the board of Veritiv Corporation, a public company where he is the chair of the Audit Committee, iAnthus Capital Holdings, Epicenter Experience, and he serves as a member of the board of advisors to Dubai-based Botho Emerging Markets Group. Michael has also been a guest lecturer at Harvard Business School since 2011.

In this episode he discusses different roles boards and board members play and the importance of treating being a board member as a job.

Quotes:

Relationship between Board and Management

“I think fundamentally having an open channels of communication where the board is free to express their perspective and opinions and advice is ideal, and this is beyond just a pure governance role.”

Big Ideas/Thoughts:

I want to just get back to the amount of time you're spending as chair of the audit committee. We talk a lot on some of these podcasts about the fact that being a board member is a job. When boards are seeking new members, they often write job descriptions, and that's an appropriate thing to do. This job, chair of a public company audit committee, takes ten percent of your available time, which is something like twenty days a year. So not only is it a job a job – but it definitely not a nine-to-five job!

Risk assessment

I think boards tend to be risk averse in the sense that their role is to safeguard the assets of the enterprise, a role, it's not necessarily the only role.

The general approach is to look at enterprise risk, financial risk, operational risk, anything that could impair an asset or create liabilities for the company. In general, what that often entails is looking at a heat map, which would identify all the various vulnerabilities a company could face and then trying to assess the likelihood of that occurrence taking place as well as the severity. So, depending on where the high risk, high severity initiatives come into play, the focus would be on trying to mitigate those risks from a risk management perspective.

Yes, but the job of a really effective board is to consider how aggressive a company should be in taking risk - not just avoiding risk. How much risk is a company willing to accept, how much should it accept, in creating value for its stakeholders.

Relationship between Board and Management

It’s important that the management team and the CEO are comfortable reaching out to an individual board member or multiple board members to bounce ideas off of them or discuss thorny issues that they're facing to try to get perspective on whether that board member has encountered the particular issue or what advice they may have outside of a formal board setting.

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Annalisa Gigante has been an award-winning innovator for 30 years. She serves as a board member of the Henry Royce Institute for advanced materials research and innovation and Cambridge Enterprise, Cambridge University’s seed funding and entrepreneurship hub. Annalisa is a thought leader in innovation, leadership and corporate governance. She is Chair of Foundations for Learning, the Co-Chair of Women Corporate Directors in Switzerland. In this episode she provides a European perspective of ESG, talks about the governance of innovation and bringing innovation to the real world.

Quotes

How Risk identification and management is driving ESG because its seen as a competitive advantage

Well, it's the definition of risk that is so important, kind of trying to understand it's both in a positive and in a negative way. You can really mitigate your risks by understanding what kind of problems you want to solve as a corporation and what kind of things are important for the company.

The fact that you can understand this as a competitive advantage is incredible in so many different things, not just in terms of what kind of products or services you put out in the market, but also in terms of employer branding or in terms of attracting the kind of investors you want. So, that's why it's an important thing to discuss really on the board level, because it has so many implications around the various stakeholders that allow your company permission to operate.

How attitudes toward ESG have changed

So, I'll just take one example in health and safety. I come from chemical industries, large manufacturing sites. It's a huge area of discussion and activity, and we used to think of these things as “what do you need to do in order to meet regulations in the various geographies in which you work?” Today we are discussing health and safety about people who've been stuck at home working on Zoom and being tired, how can we make their life easier? This is a completely different way of looking at this, and it's so important because it has a huge value add.

Tax Morality

I know that in Europe, we have a little bit of a different view about this. I've worked for American companies before, and it's not that they didn't do anything for their local community. They did a great many projects, but it was done individually, separately, each company at a time, and it is that idea of being in direct control of what it is that you choose to do as opposed to going through the tax system in order to help society. I think it’s fundamentally a product of different history that we have (in Europe).

Impact of Innovation

“Cambridge Enterprise was created to help researchers impact the real world as much as possible, to try to bring up the volume and translate fundamental research into products, services, normally, technically-based things that can have an impact in real life. This is the very particular focus of the board - having impact rather than just monetary impact. Generating royalties or seed funding is a consequence of doing the right thing as opposed to the reason why it exists, and that makes the discussion on the board so much richer.”

Big Ideas/Thoughts

On the US coming a little late to the party on ESG, but accelerating action on the part of business:

What I love about things in the US is once they get talked about, they happen quite fast, whereas in Europe, we'd be talking about it for a while and then over time we improve gradually. I think the US starting to embrace these things is going to help us create much more critical mass and then implement these things so much faster.

On funding environment in Europe compared with US at the seed stage:

In Europe, in general, we have a very different environment around VCs. When I look at equivalent research universities in the US, they mostly look after patents and royalties because the ecosystem is there to jump in to provide seed funding. This doesn't happen so much in Europe. One part of the role that I want to highlight is that whereas VCs normally look at what is the return on this idea, the job of Cambridge Enterprise is to look after the researcher, so things they do don't get completely diluted.

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Links

https://valence.community

https://theboardchallenge.org

Quotes

“For too long Black professionals have been marching to the beat of someone else's drummer. So, what we want to do at Valence is create new paths where people can recognize their contributions, their excellence, bring that to the table and have that be recognized by the organizations that they're a part of.”

“The idea for the Board Challenge came from my friend, Brad Gerstner, his thought was: "Hey, how do I affect change on a macro level so that there are more black representatives on boards.” We're starting with black board members, but the ultimate goal is to have more diverse boards in general.”

Big Ideas/Thoughts

There are two ways to take The Board Challenge pledge. One is if you don't have a black board member you are pledging to add a black board member within 12 months of taking the pledge. So, that is how we are going to get more black board members on companies, recognizing, "Hey, I don't have one. This is a good chance for me to add one. I'm going to take the Pledge. I'm going to make a public pronouncement of my desire and I'm going to be held accountable."

If your board already has a Black board member, then you can take the Pledge to support our movement because you know it's important for society, it's important for the boards that we sit on to actually make sure that they are representative, and it’s good for the country, for the economy and for corporate America in general.

There are still a hundred S&P 500 companies that don't have a single black board member, so that's a good place to start, but our goal ultimately is fully representative boards in all public and private companies, that's where we want to get to. But if you tell people that," Hey, we want a representative board" the inaction probably will dwarf the level of action, so right now we’re focused on adding black board members.

Valence is also helping to solve the perceived issue of a lack of qualified board talent by introducing board service as an aspiration to the members of our BONDS executive development community. Black professionals need to start thinking about serving on boards early, and not wait until they are ready to retire to begin preparing themselves for board service.

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Our guest today is Ralph Ward. Ralph is an internationally recognized speaker, writer and advisor on the role of boards of directors, how benchmark boards excel, and the future of governance worldwide. He publishes the online newsletter, Boardroom Insider, and he editor of the Corporate Board, the nation's leading corporate governance magazine as well as six acclaimed books about boards and governance. In this episode Ralph talks about how increased transparency into a board’s actions are accelerating changes in behavior in the boardroom and in how boards are composed.

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Boardroom Insider

Quotes

The Boeing Shareholder Case

Boards of directors need to understand that there is a lot more transparency on all their communications. There's a lot more that a good plaintiff lawyer can reasonably look at to determine just exactly how a board of directors acted – personal and work emails and texts for example.

Is the transparency, the additional transparency, the extraordinary transparency that is now available to plaintiff lawyers, is that a bad thing?

I think it's a good thing if it's a whip to better board operations and oversight. It’s forcing Boards to up their game.

As you said, good lawyers have scrubbed the meeting minutes to the point that you really don’t know exactly went on at the meeting. It's really a record created for other people to read rather than necessarily a look at what transpired. So, isn't it holding the board of directors to the fiduciary duty that they're responsible for?

“The reality is that how the sausage is made is not always really a thing that you want everyone to see, but what's important is the balance.”

Do you think the heightened level of transparency might, in some way, stifle open and honest conversation or deter people from becoming board members?

I have an issue of Forbes that has a discussion of director liability issues in it, and the author raised a very good point, "Are we going to make it so dangerous to serve on a board of directors that no one wants to anymore?" And it sounds like a valid point – it was from a Forbes article in 1968. If there has been any overall frightening away from serving on boards of directors, I haven't noticed it." but what they will do is take a closer look before they go onto a board of directors, do some more digging; what's in the background, what legal issues have come up here, who are the leaders here, what's the current climate in this boardroom, why am I joining the board? Well, because someone left. Well, why did they leave? What was the story behind that? And that's I think all to the good.

“I think if you ask the question, is it a good idea to avoid "groupthink?" Everyone would give you the right answer. Of course, we don't want "groupthink" in our board or in any kind of group of people that are making decisions. And yet, the diversity of perspective in a boardroom is something that's only really coming in to its own now.”

“Serving on a board is not something you do in your spare time and make a few extra bucks. Whatever the size of the company, no matter how small or whether it's a Fortune 50 company, the job is really important to the company and to the stakeholders of that company.”

Big Ideas/Thoughts

The sabbatical in the boardroom (during Covid) I think, really refreshed our governance in ways we never anticipated.

Why do we need to get all these folks together every three months in a room for a day or two to make decisions? Why can't we do it as a sort of a bite-sized chunk information. Have this section of the board meet for fifteen minutes online tomorrow, have this committee meet little bitty meetings all over the place, giving them the information, they need on a drip feed basis instead of a 50-pound board book just before the meeting. Why not try that? What could we do?

The reality is that what we’ve learned from virtual meetings, along with the heightened scrutiny, has brought us back to focus on the fact that being on a board is a job and it's a difficult job and a serious job and a time-consuming job. The reality is that to get the best people with the expertise and the experience and the other attributes you're looking for, you have to go beyond that limited network that you or other board members may have, or people that were former CEOs and have served on boards, and that I think is a positive as well.

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Micho Spring has been a highly respected political and business leader for many years, beginning as a young Chief of Staff to Mayor Kevin White and now as an advisor to companies around the world as the leader of Weber Shandwick’s Global Corporate practice and the Chair of the Board of the Greater Boston Chamber of Commerce. She talks about the critical importance of corporate culture, and for companies and company leaders to deliver on the values they claim to hold. “It used to be enough to have a conscience, but now you've got to have a plan - and you have to deliver on it!”

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Weber Shandwick

Quotes

“The role of corporate culture has evolved dramatically. When I started working, it was the Jack Welch days when culture was Six Sigma, and it was all about military discipline to deliver shareholder results. Now comes this generational change, where we see a generation of employees who come to work expecting their values reflected and expecting that their companies are working towards solving societal problems.”

“It used to be enough to have a conscience, but now you've got to have a plan - and you have to deliver on it!”

“The delta between what you say and what you do has become the greatest area for reputational risk.”

“It is not easy to lead in a divided society and we have had really have seen with a lot of our clients they have to make decisions that are not 80/20 favorable, but are 55/45 favorable, and no matter which way you go you're going to get an undertow of complaints. But, if you can stick to values as opposed to issues that you stand for, then you can sort out specific situations with a little more of a compass.”

“Now talk about a change, employees (at Coinbase the digital currency exchange) challenging the CEO who is trying to define what could and could not happen in the work culture (discussing politics and activism at work). That is something that we haven't seen before.”

“We (at the Greater Boston Chamber of Commerce) want to lead and our (diversity) goals are based not on the Boston we are, but on the Boston we want to become.”

Big Ideas/Thoughts

Cultural Audit

I remember very well in one crisis where we saw the incredible difference when we went in and surveyed between employees who were able to work from home and employees who had to experience the culture at work - that was the dividing line. It wasn't that the company wasn't principled and welcoming across gender and race, it was that the office culture was toxic.

When you referred to a culture competency analysis, what is that, and what is the information you're trying to elicit that will help your clients?

Well, you're trying to elicit what are their values and are they clearly understood throughout the organization and are employees seeing that the behaviors of the company are consistent with those values.

We're talking about an era of diversity; a generational diversity, it's certainly racial, ethnic, gender, and it's important that the culture becomes something that can bring all that together. That's very different than the old simplistic, "Here are the three things. Let's put them on the wall and have people know that we believe in something."

When Twitter kicked the former President off, the reason they said they did it was because of their employees and how they felt about it. Clearly, whatever values they have articulated were not consistent with enabling this kind of civil discourse, and so it was interesting to me that The New York Times story I read was actually the number one reason they made the decision was ‘our employees didn't feel comfortable with this.’

"No high-performing jerks" is a phrase was really coined by Arianna Huffington in the Uber situation, Think about it, right, because that's the tension. You've got people who are delivering results, but boy, they're corrosive in terms of the culture. Now, I don't know about you guys, but we would put up with a lot of high-performing jerks in my time, right? It turns out that the balance, the risk reward balance, of having people who are corrosive to your environment, but delivering results has gone the other way. Now, in a lot of places, there's no second chance because it's just too visible and it shows that you're not committed to your values if you're going to make an exception, just because this person makes enormous amounts of revenue for the company.

How can boards hold senior management accountable for sticking to their values without getting into the weeds?

I think it's really the same way we've always held CEOs accountable, which is really how we measure performance, how we reward them. This has become important enough that, however it's framed, it's important that they know that company's reputation, as Warren buffet has famously said, it takes a long time to build, but boy, it can go quickly. Right? It's holding them accountable at the performance level. I don't think boards can get into the weeds because we don't know enough about the company's day-to-day hiring and firing decisions to really make good judgments.

The model is really to hire CEOs who have societal acumen as well as business acumen. And that means that they understand the 360 impact on people of their actions, whether it's people internally or externally, and that are sensitive to it, are taking it into account. That is a new mark of leadership. It requires EQ for sure - and much more EQ than it has in the past.

Taking a leadership role in Boston - Becoming the Chair of the Board of the Greater Boston Chamber of Commerce

I do think it's a pivotal time for the city and there's no question when I arrived at City Hall we had just been through a civil war with busing and not only was the economy questionable, but really the threads that united us were so torn apart, it really was a civil war. So, to weave that fabric back together and lift the city into a world-class city it became, was very much Kevin White's vision and I was lucky to have a front row seat and play a role in really that pivotal time.

Now I think if that (past time in Boston) was after a civil war, I think now the city is coming out of a world war. You go and walk through downtown and we've a lot of rebuilding to do. And I think it's a time again, hopefully the bright side is so much of the solutions for this pandemic have come right from Boston. Our life sciences ecosystem has led in addressing the pandemic.

What goals have you set for diversity on the Board of the Chamber?

Our goal is to lead in this regard and to set standards for the business community. So not only have we set five-year goals of 50% women, 37% people of color and then goals beneath that. We intend to ask our members, not only ask our members to follow suit, set goals and make them public but we're gonna help them get there through partnerships that we have formed and helping them find candidates for their boards.

Under the leadership of Jim Rooney, who's got both political and societal acumen for sure, we have been able to be very proactive and weigh-in throughout this last year and I think we can play a role in being a very good partner and leader that can get the Greater Boston economy to really deliver on its full potential.

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Leading a world class board is one of the single most important things startup CEOs can do to help their businesses thrive and become industry leaders.

Matt Blumberg is the author of Startup CEO: A Field Guide to Scaling Up Your Business, the second edition of which was published last year, and Startup CXO, the sequel to Startup CEO, coming out in May, and also the co-author of the second edition of Startup Boards scheduled to be published in the fall. In this episode he talks about the importance of creating a great board for startup companies.

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Matt Blumberg Bio

Quotes

A great board can be your secret weapon for world-class strategic and operational advice, for access to capital, for critical introductions, and quite frankly, for learning how to be a great CEO.

A so-so board is just a waste of time - and a bad board can kill a great company.

Big Ideas/Thoughts

I think that really separates startup boards from boards of larger organizations, other than their size, is what the board does.

I always say there's kind of a sliding scale. If you take a raw startup on one end of the spectrum and a huge public company on the other side of the spectrum, GE or Apple or such, there's a sliding scale where at the very early stage, your board is probably spending less than 5% of its time on governance and oversight and financials and 95% of its time on strategy and product market fit, and then at the other end of the spectrum, the board probably spends almost all of its time on governance and oversight, and it certainly engages in strategy, but not minute by minute.

Why is it important to have truly independent members on these boards?

Independent directors may have some stock options to be compensated if the business does well, but they don't have a material stake in the business and they're not management. They typically either current or retired operating executives from the industry or from an adjacent industry. They provide a third leg of the stool that can bring an independent point of view to the table. They know what it's like to be an operator, but they're not operating this business and they're not heavily invested in it. They can truly look out for sort of the interests of all shareholders.

Bolster

Bolster, is a B2B marketplace that is seeking to connect venture-backed startups, venture-backed CEOs, or heads of HR with executive-level talent - vetted and vouched executive-level talent.

We find when we are going through the needs assessment with a client doing a board search, the first two questions we ask: number one, is it important to you that we find someone who's an experienced board member, and number two, is it important to you that we find you underrepresented talent?

Most frequently, the answer is yes and yes, and that gives us an opportunity to sort of take a step back and talk about the fact that the talent pool, if you really limit it to people who've been corporate directors or, and in many cases, CEOs, is not going to be a particularly diverse talent set.

What we do at Bolster is we try to define and help our clients think through what it means to be “board ready” as opposed to board experience, and there are handful of things that that make you qualified as board ready. One is you've been on a board. Two is you've been on a board that's not a corporate board. Maybe you've been on a nonprofit board, maybe you've been on a board of a community organization, like the town soccer club or the Girl Scouts or the PTA or the school board, that's a pretty significant experience as well. Or, have you been on an advisory board, or have you been an advisor to a CEO or to a senior executive? And then finally, the last thing is, if you haven't done any of those things, have you spent a lot of time in a board room, so have you been a senior executive reporting to a founder or a CEO and found yourself four times a year face to face with the firing squad of a venture-backed board? And if you have, if you've done that for a number of years, that's as good an experience as you can get.

if you're a venture-backed CEO, you're running a startup, I think one of your best calling cards in life is, "Hi, would you be interested in being on my board," and it gives you access to people and time with people that you wouldn't otherwise get, and not in a disingenuous way at all, but you will end up face to face, or whatever the digital equivalent is, with industry leaders and with people who've had incredible success, incredible success in lots of different walks of life that even if all you do is a one hour screening discussion and it doesn't go anywhere, you've learned something, you've added someone to your network.

I really designed Startup CEO, which I wrote it after fifteen years of being a CEO, to be the thing that I wish someone had given me when I started my company and I didn't really know how to be a CEO.

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Cathy Minehan has been an active for profit and not for profit board member of a variety of entities over many and worked for 39 years with the Federal Reserve System, including as the President and Chief Executive of the Boston Bank Chapter. In this episode she talks about the momentum of ESG (Environmental, Social and Governance) and the focus by business on long-term issues that will lead to long-term success.

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Cathy Minehan NACD New England Bio

Business Roundtable Statement on Stakeholder Capitalism

Quotes

For a long period of time there has been a discussion: should a company driven by the quarterly earnings releases and all of the interaction with the street, or should it really focus on the long run? Should it have a purpose and a commitment? Is that what the board of directors should be espousing, or should the board be right behind the CEO in terms of hitting short-term objectives?

This has been a debate for a long-time and the longer-term look is gaining ascendance. I think that was clear in the 2019 letter from the Business Roundtable. And now that organizations that are very important to boards of directors and to senior management - ISS, Glass Lewis, the major financial custodians who vote a lot of the shares - it needs to be very important to boards of directors.

Big Ideas/Thoughts

What is it that is motivating this movement towards stakeholder capitalism?

I think it's a frustration with quarterly balance sheets and the quarterly demands that are made because it doesn't really give you the best picture that you could have of companies that are being challenged by a lot of different things. I also think some of the current challenges have made this even more important. When you think about racial equity issues that were highlighted in the spring of this year, when you think about pandemic issues and how much climate change fed into the pandemic, there are longer-term issues there, that businesses, to keep themselves healthy, have to come to grips with.

Am I saying that quarterly reporting of data and progress against what you've told the street, your goals are for the year, is going to go away? No, I'm not saying that. That's not going to happen. But there has to be a balance. You have to feel the short term needs of the markets, but have that longer run focus because that's, what's going to keep you in the running against a whole range of different challenges

Well, I think what's driving it is exactly what we were talking about: environmental footprints; social capital, both internal and external; major governance issues, what's the board look like? Is it diverse, and what is its focus? These are just really important topics, and I believe they come out of this longer-term focus, this idea that companies need to be run for a purpose, that they have multiple stakeholders.

ESG is a way of reflecting the multiple stakeholders mindset. The environment, the climate, your supply chain, your customers, people who work for you, the communities you work in and how your board, the direction that your board gives you, the kind of governance principles that the board works uses.

Ron O'Hanley of State Street and Larry Fink of BlackRock are just two of the big names that have committed to working with companies, investing in companies, holding the stocks of companies, encouraging people to vote shares in a particular direction that are It's all about long-term. ESG is risk management.

And when people like (O’Hanley and Fink) are saying “we're going to be looking at your company to see, are you managing the risk of the future in an inappropriate way, because that is an investment risk for what we do” that is really a strong motivation to move in that direction.

ESG provides a powerful lens for focusing on the long-term, and the key driver of a company's long-term success is effective, independent board oversight

If the CEOs of companies really are talking to their boards about stakeholder issues as opposed to shareholder issues and if the boards are really focused on that concept and that idea of purpose and commitment, I think it's going to change the lens with which the board members focus on the company. It won't be enough that we paid everybody a bonus. We want to know who everybody is, and we want to know what's the gender equity, what's the racial equity, what's the wage equity in the company.

We're so used to thinking of equality, i.e., equal pay for equal work. Equal pay for equal work has been the law for sixty years, but when you look at the wage gap, the raw wage gap, i.e., what do women make versus what do men make, you will see that the gaps are large and staying large and get worse when you put women of color, men of color, when you compare them to the wages of white men

Cathy, when we spoke earlier, you said something that really stuck with me. There is a lot of focus on skills you need to serve on a board, but one skill you mentioned that a director must develop is the ability to realize. "If I don't have the skillset that is needed on this board at this time, I should step down."

Well, I personally think that this ought to be something that every board member considers on at least on annual basis in some of the annual material that you are asked to provide - an analysis of your own participation and your own contributions to the board.

I went through this on the Visa board. I was on the Visa board for ten years before it went public. I had a wealth of payment system experience from the Fed, but I did not have the technological background. Visa is a technology company. It does payments, but it's a big technology company, and the more and more they got into that, the more they wanted and needed tech CEOs' experiences to add to the board's perspective.

We did a grid and it was clear the kinds of skills I brought, a lot of people on the board had them, and there were definitely some openings. So, it wasn't something that I raised my hand and said, "I'm going to step down," but in the context of these conversations, it became obvious that this was an opportunity for Visa, and it was something that I needed to recognize, and I needed to do, and I still look upon that as a very good decision on my part and a very good way of dealing with it on their part.

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Bob Sherman has served as the United States Ambassador to Portugal. He is a shareholder at the law firm of Greenberg Traurig and serves on board of Novo Banco, a US PE-backed bank based in Portugal. In this episode he shares his journey in the Obama campaign and then the Biden campaign and through that lens shares what he believes boards and companies should expect from the new Biden administration and how they may want to take advantage of the opportunities that will be available. We also talk about what governance structure for a US embassy looks like and the importance of getting it right.

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Bob Sherman Bio

Business Roundtable Statement on Stakeholder Capitalism

Quotes

On What Presidential Elections are about

“When it comes to presidential races, it's really only about two things; stay the course or change. And if it's about change, the issue is, what kind of change?”

“The thing that I learned in that campaign starting in Iowa was the presidential campaigns are about the future. It's not what you've done in the past. It's what you're going to do for people.”

Who Joe Biden is?

“Joe Biden embodied these values: personal integrity, a commitment to national values and a desire to restore international relations.”

“He believes in his bones that people need to be respected and that they should have a sense of dignity themselves. This concept again of dignity and the notion, to use his words, of dealing people back into the process is going to be highly important.”

“Joe Biden, by DNA and by disposition, is a different person than Barack Obama. He's a moderate, first and foremost. He's a creature of the Senate.”

I believe that what we're going to see is a new social contract. I think you're going to see is a lot of focus on the business community and corporate America being a partner in the solutions to the problems that we face.

Governance of a US Mission

When I was preparing to be Ambassador to Portugal, Bill McRaven the four-star navy admiral, who just a couple of years previously was the architect of the raid that killed Osama bin Laden, said something that really stayed with me: "I am a four-star navy admiral." he said, "But you have to remember, when I'm addressing you, you have a fifth star; so you're welcome to call me Admiral, and you're welcome to call me Bill, but I call you sir, and not the other way around." “This is important. Chain of command is important to us. Military authority always reports to civilian authority. That's the way our government is set up, and that's the way we operate.”

Big Ideas/Thoughts

Based on what Joe Biden has said and based on who he is, we have clues on what boards and corporations should expect in the new administration. The notion of stakeholder capitalism, beyond just shareholder fiduciary duty, is likely to be accelerated. Diversity of boards reflecting the diversity of the population will get a big push; equitable pay and executive compensation is also likely to get emphasis; and science being basis for decision making in addressing existential threats in areas like climate change, energy, and healthcare.

My wife and I went to Philadelphia together [during the first Obama campaign] and we were in South Philly at the time. Again, the cornerstone of the Obama campaign was engaging voters one by one. That's what we did, and we were walking through neighborhoods, knocking on doors, engaging with voters, when we saw three African American women sitting on a stoop, and we thought, "Aha., these are probably good people to engage and likely voters for Barack Obama over Hillary Clinton given the fact that they were African-American.

We went up to them to talk about why they should be voting for Senator Obama, and one of the women looked at us and said, "You know, my son has a learning disability. I can't get services for him; He's failing in school. He feels isolated, so now he's joining gangs because he feels like he's a part of something. I'm worried every day that I'm going to get a call that my son is dead. You tell me what Barack Obama is going to do for somebody like me."

That was an eye-opening experience because you realize that within the country, there are so many people that don't feel there's any connection they have to the federal government, and there are people that feel that the American dream is out of reach.

What Joe Biden has made clear during the campaign is that he believes in predictability, that government should be predictable for the business community. So, I think we're going to see a much more consistent approach to the issues than maybe we have seen in the past. That decisions should be science based so, I think that science is going to play a big role in how decisions get made in a Biden administration. And perhaps most importantly, there is his commitment to human dignity. He believes in his bones, that people need to be respected and that they should have a sense of dignity themselves.

I think you're going to also see, not incidentally, non-politicized decision making. He said he wants to be a President for all the people and will work as hard for the people that voted against him as for those that did. This concept again of dignity and the notion, to use his words, of "dealing people back into the process" is going to be highly important.

The concept that boards owe fiduciary duty to all stakeholders is gaining momentum, and has been for a while, and if what you're saying comes to pass, it will be something to really keep an eye on because leadership from the top could accelerate the momentum that’s been building and it'll be interesting to see where it leads us.

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Paul Ayoub has served as the chair of several boards, including two significant nonprofit organizations, and is about to become the chair of the board of the largest nonprofit health care organization in the country, St. Jude Children’s Research Hospital. In this episode he shares his views on board composition, the relationship between the board chair and CEO and the critical importance of diversity, equity and inclusion to the effectiveness of the organization.

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Links

https://www.nutter.com/people-Paul-J-Ayoub

https://www.linkedin.com/in/paul-ayoub-0941959/

https://www.nutter.com/trending-newsroom-news-paul-ayoub-boston-business-journal-power-50

https://hbr.org/2018/03/how-to-be-a-good-board-chair

Quotes

On being chair of the Board

First, you have to remember you are not the CEO -- you're the chair. So what does that mean? It means that you're really the coach; you're the producer. It’s not your vision. It’s your job to bring forth the collective vision and the collective wisdom of the people who are on your board and to help the CEO be the best he/she can be. You also have to remember that you're really just the temporary steward of that position. I'm sure you've both experienced this, but sometimes people will start to own their titles and own their positions and it becomes their identity.

When I have become a board chair, my first principal is that the CEO’s success is my success and so I have no desire to be out front from a management/organization point of view. The Chair represents the Board and there are speaking opportunities and public-facing events where the chair represents the organization on behalf of the board and the organization. The chair may sit at the head of the table, but there can be no ego of the chair. The meaningful reward the chair receives is knowing in his/her heart that the organization is successful and the CEO is successful.

How important is board composition and what's the best way to approach it?

Board composition and culture are everything. I think of it much like a sports team . You can have a really talented team with a weak culture or you can have a great culture and a weak team and, in either case, you're only going to get so far.

So, I think that the composition is critical. It's actually not just a good thing, it's an essential part of the fiduciary duty of a board to have the right mix of diversity of skill, talent, thought, background and, of course, critically, diversity in terms of women and people of color. It is not opinion, but proven fact, that diversity makes a board stronger and better . Also, it takes a dedicated investment in time to recruit, build, train and integrate a diverse board.

What have you found as effective strategies with respect to off-boarding board members?

Off-boarding begins with onboarding. So, when you are bringing people onto your board, it's important to tell them what the expectations and responsibilities are in every respect such as meeting attendance, doing the reading, and serving on committees. One of those expectations also should be being prepared to leave the board when their term is up, regardless of whether you have limits. I think the culture of term limits is more powerful than a bylaw that sets term limits .

Serving on the board of a nonprofit organization

If you're going to be involved in a nonprofit, you should understand why. In my view, it's a combination of duty, privilege and responsibility. I think we all have a responsibility to give back to our community, whether it's our immediate neighborhood or the larger community of the country of the world, and it's a privilege to do so. But, upon beginning serving, understanding and fulfilling the fiduciary responsibility of being a board member is critical.

Big Ideas/Thoughts

Progress toward diversity, equity and inclusion has been slow - shamefully slow. It's been better of late, because world circumstances have dictated that it has to be better. There's a heightened sensitivity and deeper understanding that diversity means strength. People understand that even if you don't approach diversity from the moral point of view or that it's the right thing to do, studies have shown that a diverse board is a stronger board and makes for a stronger organization. As Justice Louis Brandeis, the founder of my firm, Nutter, said: "In the frank expression of conflicting opinions that lies the greatest promise of wisdom."

Also, keep in mind that you can't be a board member and support diversity, equity and inclusion unless you are willing to rotate off a board to make room for someone who is diverse. So, in driving diversity on boards I’ve chaired, I use that approach and it's rare to get a “no” when asking someone to rotate off of a board to make room for others.

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Didier Cossin is the founder and director of IMD Global Board Center based in Switzerland, where he works with owners, boards, and senior leaders to enhance organizational performance using strategy, best-in-class decision-making and enhancing board culture and governance best practices In this episode he talks about creating a high performance thru enhancing board culture, fostering constructive dissent and focusing on governance best practices.

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Links

https://www.imd.org/faculty/professors/didier-cossin/

https://www.linkedin.com/in/didiercossin/

Quotes

Governance has been the key driver of performance in the markets and for organizations and the way I define governance, which I think is all encompassing, is the art of decision-making at the top of organizations.

Constructive dissent is pivotal in the high functioning board. Dialectic is the meeting of well-informed great minds that through a dialogue, builds up towards a better decision and thus constructive dissent. Yes, dissent, having a different view, but in a constructive way for the organization, bringing the decision to a higher level and whatever we do in governance, it's about fostering that constructive dissent towards decisions.

When a board is looking for a new member, what should it be looking for to determine that this new member will fit into this structure that it, that he or she will add to the constructive dissent, will add not just to the diversity of opinion, but will be - and I'll use the term "cultural fit" - with the board.

I like the way you asked your question, because is it the cultural fit or is it enough of a cultural tension? My observation is that competency has less impact on decisions than personality. Real diversity is going to be painful and you've got to figure out the level of pain that somehow is acceptable to drive effective governance. So the dialogue has to remain, but you need enough tension in that dialogue somehow.

I'm a strong believer in meritocracy. We do not have enough meritocracy in boardrooms. And we have many boards that get comfortable with board member, And somehow it's not very well socially accepted to remove board members.

Is it possible that you have a high performing board, but the company's not performing well or vice versa?

It's very hard for me to see a well-organized and highly performing board in an underperforming organization. I haven't seen that.

Risk work is essential to good board work

Big Ideas/Thoughts

What makes a great board?

Several items. Skills and competencies, dedication from the board members, the level of caring for the organization, the level of passion, the level of commitment because we are human beings and part of our human quality is that level of commitment.

The second one is what do people pay attention to? Do you have a board that focuses on what matters to the organization?

And diversity, but in a deep way: diversity of perspectives, which of course is fostered by gender diversity and by ethnic diversity and by culture diversity, but truly should lead to a diversity of perspectives in order to foster that constructive dissent that is at the heart at the very heart of the governance principle.

I was quoted in a famous financial newspaper for saying that 90% of boards are failing. I think it's improving a bit because people have more awareness now and in general I see better boards. But the state of health of boards is still not great, but it is improving. When I say failing, I mean they are not fulfilling their fiduciary responsibility to the organization.

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James Lam is a globally recognized risk expert, an early advocate of Enterprise Risk Management and the first-ever Chief Risk Officer. He has served as a director and chair of the risk oversight and audit committees of both publicly and private companies. James was a commissioner for the NACD Blue Ribbon Commission on board oversight of disruptive risk. In this episode he shares his most current thinking on the evolving state of risk management and the challenges and opportunities ahead..

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Links

https://en.wikipedia.org/wiki/James_Lam

https://jameslam.com

Quotes

I think taking a proactive approach to risk management is one of the key responsibilities for the CRO. So, think about yourself in the first line of defense. You're running a business. You're running the IT function. You're really focused on the day-to-day, and you might be responding to risk incidents or minor crises, but a Chief Risk Officer is much more forward-looking, much more proactive, looking at things outside in, looking at things much more long term….the Chief Risk Officer really provides the expertise, the time, the attention and focus on the most critical things that are going to drive performance in the future. So being proactive, being forward looking at key trends outside in, are really important things.

I think it is important that the board provides input in terms of the kind of risk management reporting that they want to see, the kind of metrics, and also guidance on the risk appetite statement and the integration between risk and strategy.

The Risk Committee and the Audit Committee wear different hats. They have very different scopes and mandates. The Audit Committee is paid to think inside the box: SEC requirements, financial disclosure, Sarbanes Oxley, FASB, etc. You don't want to be creative in your accounting. You really want to make sure you're in compliance of all the laws, regulations and standards.

Whereas the risk committee is paid to think outside the box. What are the uncertainties, what are the external drivers that could impact our earnings, our cash flows, our value? How do we expect the unexpected? How do we think around corners? So, you're really paid to think outside the box, and I think that is a very compelling way of contrasting the scope and mandate of the Audit versus the Risk Committee.

Big Ideas/Thoughts

Even companies with risk committees might say appropriately that strategic risk, and reputational risk ought to be a full board agenda item. There are different ways of doing it, but I think the most important thing is to make sure that the risk agenda is well represented in terms of board and committee time.

What are the things that we should look at in determining whether, and to what extent, a board bears the responsibility for the catastrophic problem that might derail a company?

I think your listeners could benefit from looking at the Blue Bell Ice Cream case (link) and the Clovis Oncology (link) case, both of which I think have really elevated the standards for duties of care and duties of loyalty in terms of risk management and compliance, and that it is important for the Board of Directors in exercising those two standards to make sure that there is a risk management and compliance system in place, and that system is working effectively and that the board is getting the right metrics, the right reporting and red flags in terms of risks, and that they hold management accountable.

https://scholar.google.com/scholar_case?case=11357134939420858969&q=Marchand+v.+Barnhill.&hl=en&as_sdt=6,30&as_vis=1 (Blue Bell case)

Delaware Supreme Court Ruling in Fatal Blue Bell Listeria Shareholder Suit (natlawreview.com) (Blue Bell case commentary)

2019-ca-2017-0222-jrs.pdf (justia.com) (Clovis Oncology case)

Another Reminder From Delaware About the Duty of Oversight | WilmerHale (Clovis Oncology case commentary)

Chief Risk Officer

The Chief Risk Officer is really tasked with making sure that there's a robust and effective ERM program, that risk management policies, risk assessment and analytics, risk management strategies, and executive and board reporting are appropriate.

I would say the CRO is responsible to help the board and senior management to imagine the unimaginable. To expect the unexpected and be able to prepare for any scenario. I worked with one Board of Directors and the company had a very strong ERM program. In 2018, the board approved a pandemic management plan. Last year they stress test that plan and then when the pandemic hit early this year, they had a playbook. The playbook didn't anticipate everything, but it had a curve with different stages of a pandemic, it had social distancing, PPE, you know, working remotely and so forth. We probably had 70 to 80% of the eventualities and that really helped the company be prepared for this scenario. I would say that company probably wouldn't have this plan in place if they hadn’t already addressed some of their core risks in their ERM program.

A lot of companies get stuck in risk identification, So the way many companies do risk assessments and heat maps, they generally get people in the room, they say, what are the risks facing the company? They might come up with 20, 30 different risks and they would assess the probability one to five and then severity one to five and they'll multiply the two scores to get an overall risk rating.

I believe this approach is fundamentally flawed. Let me give you a very specific example. What's the probability and severity of a Cyber Security attack that's happening to the company right now? Your firewall and your controls are able to protect against it. Probability is high. One to five, it has to be at five it's happening. Hundreds and thousands of times. What's the severity? It's low. The lowest you can be. It's a one. So, five times one is a five. What's the probability and severity of a major data breach. The probability is low. It's a one. Severity is high. It's a five, one times five, it's five. So, you end up with the same score for two very different situations. The math behind probability times severity gives you expected loss, but your risk is not driven by expected loss, it's driven by stress loss or unexpected loss.

In determining how to assess risk, I like to start with the key strategic, business, and operational objectives of the company. What's your strategy? What are the KPIs - Key Performance Indicators - that would indicate whether you're achieving that strategy? Then you say, what are the risks that could drive variability in those KPIs. What are the key risk indicators and risk tolerances for those risks? So, start with the business objectives of the company and let that drive your risk assessment and quantification.

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Mohamad Ali is the CEO of International Data Group (IDG, Inc.), a private technology media, events and research company. He has also served as CEO of a publicly traded company and has served on many public, private, and nonprofit boards. In this episode, Mohamad shares what he has learned about being a good board member as well as the intricacies of boards through his wide range of experience on both the board and company leadership sides. He also integrates the importance of giving back and the support he received after moving to the United States as a child.

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Links

https://www.idg.com/

https://twitter.com/mhsali

https://www.linkedin.com/in/alimohamad/

Biography

His bio is available here: https://www.idg.com/about-idg-inc/

Mohamad Ali was appointed Chief Executive Officer at International Data Group, Inc., the world’s leading technology media, events and research company, in July 2019.

Prior to this role, Mohamad was CEO of Carbonite, a publicly traded data-protection and security firm, where he grew the company’s revenue four-fold, to more than a half-billion dollars in four years. Before that, Mohamad served as Chief Strategy Officer at Hewlett-Packard where he played a pivotal role in the company’s turnaround and led the decision process to split HP into two companies. At IBM, Mohamad acquired and integrated various companies to create the firm’s $8 billion analytics software unit. At Avaya, he oversaw the $2 billion services group and served as head of the company’s research labs.

Mohamad holds a B.S. in Computer Engineering, a B.A. in History and a master’s degree in Electrical Engineering, all from Stanford University. He serves on the board of iRobot (NASDAQ: IRBT) and was previously on the board of Carbonite (NASDAQ: CARB) and City National Bank (NYSE: CYN).

Mohamad was honored as 2018 CEO of the Year by the Massachusetts Technology Leadership Council, was a member of the 2018 Public Board of the Year by The National Association of Corporate Directors New England, was named a 2011 All-Star by Massachusetts High Tech magazine, was named a 2008 40 Under 40 honoree by Boston Business Journal, and was a finalist in America’s prestigious 1988 National Science Talent Search.

Article: “I am Living proof of the American Dream” – link to article https://medium.com/authority-magazine/i-am-living-proof-of-the-american-dream-with-mohamad-ali-ceo-of-carbonite-851f0bd33c90

Quotes

Onboarding

I think one of the most important aspects of onboarding isn't actually the content that you learn, but the personal dynamics of the board and the board. It could be 8 people, it could be 18 people but it's a small number of people of often very high caliber people with very strong opinions…how you onboard someone culturally onto the board is a very important thing. That's something I've seen done poorly and it's something I've seen done well. We spend so much time and money with recruiters getting the right skills, doing the skills matrix and so forth and then, once the person's here, that's kind of when the hard work starts.

What's the best thing a board can do when a CEO has a major challenge, or the company is in a crisis?

Great question, because in some ways we've all been there in the last six or nine months. I would say that if you have a good CEO and the CEO has a good management team, probably one of the most important things is be supportive of that team, be available, be engaged, but be supportive… if you have a good CEO and there's a crisis, you hunker down together.

Big Ideas/Thoughts

What was impactful in the path leading to your success as you were growing up

I'm one of the lucky ones to have gotten all the opportunities that I have gotten and to where I am today. It wasn't just my mom and my dad that encouraged me because they were new to this country. they didn't know how to navigate it. There were people who went out of their way to help me for really no gain to them. There were two school teachers in particular, in the public school system that showed me the way and guided me and eventually I ended up at one of these elite public schools where you have to take a test to get in and that launched me on my way to Stanford and my career. Without these two people, who out of the goodness of their heart just decided to help me, I don't think I would be here today. I always try to keep that in mind when I look at where I am and I think all of us are wherever we are, whatever success we've had, it's because other people have helped. I think it's really critical for us to all give back.

First Board Experience

My first board experience, I would have to say that I really didn't know anything about boards, so it was very much a learning process for me. One of the things that I did was just first assume that I didn't know anything about how boards work and that they had brought me on board for a specific reason. That's where I focused my time, helping them determine how to sell the company. Then the other thing that I did was I observed, I watched what the other board members did. I asked and I learned - there were several really great people on the board who were willing to teach me.

Learning what works for Boards by observing what doesn’t work

I've seen a lot of things work. I've also seen a lot of things, not work and that's really important. We all talk about how failure is a really important component of education and learning and it really is.

How serving as a CEO has helped him as a board member

It's tremendously helpful actually. In some ways, it allows you to relate with a lot more credibility to the CEO. It's not that other board members who haven't been a CEO aren't credible, but in the eyes of the CEO of the company, I think knowing that a board member has been CEO and has been through the pains of being CEO, been in the trenches, has had to navigate the landmines that CEO deals with, it goes again beyond the technical aspects of the role and more to the emotional connection, and understanding that is shared with CEO

Board Composition and offboarding

One of the things that I've seen done at multiple companies where I've been on the board is the use of a skills matrix and the skills needed to the company changes periodically, the use of the skills matrix has been very helpful. For example, at iRobot, we do a skills matrix every year and we publish it as part of our SEC filings and it gives the board an opportunity to discuss what we might want to change, in short term, medium term, long term and all the board members are part of that discussion. It's not just transparent to our board members, but to all of our investors.

Diversity on boards

I see progress, but not enough. One example is that a few years ago there was a target of getting 20% women on boards. We've met that target, but if you think about it, it's only 20%, it's not 50%.

M&A

Most M&As, or a significant number of M&A transactions, ultimately don't meet the goals or produce the value expected. So where is the disconnect in this if two parties are really trying to do the right thing?

There is a three-letter answer to that and it’s ego, right? So, 75% of all transactions fail to meet their business cases. The good companies, the companies that know how to do M&A well obviously perform much better than that, because they do it for the right reasons.

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Dede Orraca-Cecil is a member of Egon Zehnder, an international executive search and leadership advisory firm, where she leads efforts in almost every aspect of what a company or organization needs in leadership and governance. She talks about identifying company leadership and board building – what it takes and how the conversation has changed.

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Quotes

“How have recent events, including the death of George Floyd and everything that's followed, impacted how diversity and inclusion is viewed on for-profit boards?”

I would say it has had a material impact. I think going into this we have had this conversation about diversity on boards over the last few years – it is not a new one. We've seen slow progress with an initial focus on gender. But what we're seeing now is a shift where there is more comfort or directness in engaging on discussions around racial and ethnic diversity and it's not just the boardroom.

I think what we've seen since May is really a more openness and in fact, more of an expectation coming from the client around running inclusive processes. People feel more comfortable or more empowered to say: “we need to do something about the representation on our board and in our organizations and we need your help and support in doing that.”

So, the client is driving a lot of these discussions asking: “How do we focus on this? What can we do differently? How do we think about our pipeline for our board? How do we think about board readiness? These are conversations that maybe before we might've been introducing or leading with and now we have a lot of clients who are beating us to the punch and asking that before we even get to it.

Big Ideas/Thoughts

Building a High-Performing Board

You’re looking for a more colorful tapestry of experiences on a board. You want to understand not just a person's capacity, but you really understand what is it that this board is trying to solve for and what are the certain skills that will help accomplish those goals.

We're in a time where, when we say "culture fit" that can sometimes set people off on a path where you're worried about creating a homogenous environment, so I want to just clarify. We're not trying to create a board where “culture” means we all act the same, we all speak the same. In fact, what we're looking for is actually different, the underlying kind of rules engagement. How do we communicate? How do we show up? How do we create a space where you get that right level of critical thinking, creative abrasion, if you will? You want a space where people can bring themselves fully to the board, in a way that also doesn't create sharp elbows or knock others out from being able to contribute their voice.

Board searches and board work operate on a different cycle. In the best-case scenarios, you start looking for your directors with enough time and window to bring somebody on board. Not only just to find the right director candidates, but to actually spend enough time with the board itself, to get a feel for how they engage and interact.

Off-boarding board members

Nobody wants to be the bad cop. Nobody wants to off-board, especially in a scenario where they are preexisting relationships, where you've gotten to know person over time and then I think that's fine. A little tongue in cheek, but that's probably why we have a some of the work that we have. It's much easier to hire an outsider to come in and help facilitate that process than to be the ones that tell your fellow director and off board someone.

If you think about it, the board is one big team, and you really want to establish a sense of how effectively they are working together as a team. It used to be that some people would call this board assessment, the spirit of it is “how do we make sure that we're the most high performing board that we can be.” Often in those discussions or in those kinds of, engagements, it gives, the board chair a way to look across the team to see where new kind of capabilities could come in and, and where maybe some contributions are not as valuable.

“Why would a company pay six figures to find a board member? You know most boards believe that through their own networks, they can identify and recruit board members. How do you answer that question? What's the value proposition?”

We've seen an era where bad performance at the company level cannot just take down a company, but an entire industry, it makes you take a step back to think about the roles and responsibilities of boards. That has led to a shift in the nature and seriousness around board composition and responsibility and duties. What competencies do we want to look for? What skill sets are we looking for? And how can we actually create more diverse and inclusive representation on the board as well? These are areas that are complex and it's hard to necessarily just rely on your own network. Going to a firm like ours or the others, allows you to tackle those efforts with reinforcements.

Diversity Pipeline

“Raza and I have had conversations that for a while people used the lack of pipeline as maybe an excuse for not actually being as aggressive in diversity as they might otherwise be and in the conversations we've had in the last couple of months, it feels like that just isn't going to fly anymore. That's really, it's really just not a valid, like no one buys that excuse anymore.”

You can't say, well, I don't know where they are. Or they don't exist, you know, we do exist. We are here and people's willingness to rely on some of that old complacency isn't there really anymore and the across the ecosystem. Each of us is being challenged around norms that we used to assume or accept. One of those things being the pipeline. What does that mean and how does that shift the work?

It can shift the work in a few different ways. When some says they can’t find somebody I ask - is it true that you can't find anybody? Well, it depends on what the spec is. It depends on what we're looking for and how we're defining a director's experiences in each event. If you were to say, well, we only want a sitting CEO of a Fortune 50, well, of course that pipeline going to look very different. Do you then rely on that very specific spec and say, well, we tried, but the pipeline is different? Or do you think about what's underlying that request? What are the true needs of the board.

Is it important to have a Fortune 50 CEO? Or are you actually looking for something else in that executive to contribute to the board. If we go there, we can actually move the spec a bit further and give ourselves room actually build a more robust and diverse pipeline.

What are the new models of leadership that you're exploring, what does that refer to?

If you look at how the world has changed, we’ve seen greater convergence around sectors. Often if you're leading a large institution, you're thinking about your employees, you're thinking about your consumers, but you're also thinking about governments and you are thinking about civil society. When you're looking at new models of leadership, it’s how do you actually engage across those things? How fluid are you as a senior executive moving from the public to the private, how facile are you in terms of engaging with heads of state and not just your consumer base.

Then there's that other piece that we alluded to earlier, which is this notion of moving beyond thinking about shareholder value and really this concept of stakeholder capitalism. What does that require of a leader? How adaptive are you? How are you looking at the individual?

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Diane Hessan is successful entrepreneur, CEO, author and has been highly recognized for the broad range of impactful work she has done. And she has served on virtually every type of company board and seen the work of the board from many perspectives. In the fascinating conversation, she shares her insight and opinion on the experience of running and serving on a board.

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Quotes

First Board Experience

My first board experience was very hands on. It was a real passion project because we all were completely dedicated to the mission. I started by spending way too much time on operating issues and eventually sat back and became more strategic.

I thought it would be great for my family and my job and my learning, to broaden my horizons and to learn how to do some other things. I had a conversation with a friend of mine who was on a whole bunch of boards, and I just said to him, I feel like I want to do something bigger. I feel like I want to give back and not focus on myself so much and yeah, he said, what are you passionate about? I said, I'm passionate about kids. I'm passionate about antiviolence, I'm passionate about homelessness.

He was just like "Diane. I have a great organization for you and they really need marketing help" because that was why people wanted me on their boards at the time. It really was a great fit and I basically got it by talking to somebody who had already been there.

There were times when I would say something and I learned to say, “is this a board issue or is this not a board issue?” I mean, I was just very explicit about it.

Changes in the Boardroom because of Covid

Every organization that I'm on the board of no matter whether they're for profit, nonprofit, et cetera, have had talks about the impact of COVID on how their employees are working, how they're building culture, how they're recruiting, retaining, onboarding, what the impact is on people working from home, when they should open up again, whether they should give their employees free stuff to be able to be more effective at home, how they handle the huge challenges of employees who are parents and how to make everyone feel fairly treated there.

(Companies are) Looking for shifts in customer behavior and customer requirements is also a really interesting topic. Most of these companies have new go to market strategies, new strategic partnerships, interesting new acquisitions, and I think in general, new ways of actually reaching out into the marketplace and building strategy around that.

And for me it's meant much more time on my boards of just doing my homework and reaching out and try to see what other companies are doing and just generally getting educated so that I can be as helpful as possible.

What makes an effective board meeting?

I think the great board meetings are when the CEO says, “here's your deck or here's three pages about what's happening in the business. I have three issues that are keeping me awake at night, and I really want your help on them. Here they are. A, B and C. Please come prepared to help.” Spending a board meeting with four hours of PowerPoint is the worst most boring thing in the world. And it really doesn't help.

Big Ideas/Thoughts

Learned about being a Board member from being a CEO

Number one, when your business is going well, you want your board to just ask questions and beat you up and challenge all of your assumptions. You're energized. You're doing well. You want a board that gives you watch outs and says, well, what about this? And could we grow this faster?

When a business is not going well, you don't really, as a CEO, want to get beat up. So, when things weren't good, I really appreciated board members that were supportive, that helped me look on the bright side that shared with me information about how other companies were also struggling. So, when things are good, you want to tough board when things are bad, you want a board that walks in your shoes and also knows how to be supportive.

I learned how sometimes asking questions is more valuable than giving advice to the CEO.

One of the things that I learned from being a CEO, but also from being a board member. Guess what: the board meeting is not just about the CEO making the board happy. The board meeting is also about making the board members feel that they're contributing.

One of the things that I've done in one of my boards…. We're going to talk about this for the next hour and a half. I'm going to leave the last half hour of this conversation to just go around. I'm going to give each one of you a chance to just do two to three minutes more of final thoughts on this issue….Sometimes you're in a big room, you got a lot of people talking. You feel like you can't get a word in edgewise. I know I feel that sometimes and if you're an introvert, and some of my best board members have been introverts, they just give up, they just don't want to interrupt and jump in and say, I have something.

So if people know that they'll have their say at the end, because you're going to go around the room and give everyone a chance to talk, you sometimes get extraordinary advice from people who otherwise just would have given up on participating… and after a while you get really good at packing your 120 seconds with everything you wanted to know.

We all as board members want to feel that we're adding value and we can't do that unless the board process works really, really well

On the broad range of company boards

I wanted to broaden the industries in which I work and it is particularly fun as a board member to just dive into an industry where you've never really looked at financials before. You've never really thought about how they make any money. And you have to learn an entirely new language. It's just a great stretch experience

Term Limits

I don't love term limits, but I love bringing fresh faces onto a board. In some industries that's more valuable than others. If you're in an industry, banking is an example, sometimes business knowledge, knowledge of the industry and knowledge of the company and its functions has an outsized impact on your ability to be successful on the board. And year after year, the more you learn, the more valuable you become. You get to the point where you have somebody that's been on the board for 10 or 15 years and they are outrageously valuable. They have the history, they still are full of impact, et cetera, and it's hard to say goodbye to those people. But every time you bring on a new, extraordinary board member it changes the conversation. It opens up the possibilities. It brings in all kinds of perspectives that you thought you never had before, and I think that's really valuable. Especially now that the world's changing so fast. As the world changes, the skills that we need and the perspectives that we need are also changing.

Boston as a collaborative investment community

Boston is an extremely collaborative community, so that whereas other ecosystems like San Francisco or New York have a reputation for being competitive - you know: My fundraising is bigger than yours. My product is better than yours. My app is cooler than yours. My black turtleneck is blacker than yours, - in Boston I really believe that the biggest question that you get asked when you're trying to build a company is “what I can I do to help you?”

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Ed Pendergast has served on numerous boards - public, private, and nonprofits - for more than 40 years. Very few people have had the opportunity to serve on such a broad range of boards over such a long period of time as Ed, and for good reason. He is the consummate board member. Armed with a deep understanding of business finance and operations, and what it takes to be an effective board member, Ed exemplifies the qualitied that every company seeks on its board.

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Quotes

Impact of the pandemic:

“Well, it's varied pretty dramatically. I sit on five boards…and some of them have been hit very hard, some are booming. It seems to depend upon the industry they're in or the impact that coronavirus has had on the business.”

“You probably have heard more talk in the last few months about supply chain than you have in the rest of your life.”

“In our investment bank, we are advising companies generally not to sell the business right now because valuations are so strange.”

Question: If you're advising a family owned, operated business, and they're thinking about forming a board for the first time, but they're hesitating and there are several reasons why they do. What advice do you give them?

Answer: Well, I advise them not to start out with their uncle's lawyer and their brother's banker, but that they try to think about “why are we having this board?” What type of skill sets do we need that would be helpful to this business and try not to pack it with all people you've known for a long time? It's okay to have a couple of people that you've known a long time, but it's very helpful to think outside of the box.

Question: When people say “we don’t have time of the money for a board, what kind of advice to give them? What do you tell them?

Answer: Well, what's the return on the investment? If we can bring together five people with great talent, some of which you don't have in your business who can help in business development and it costs you $50,000 and it generates a strategy that builds the business from $50 million to $250 million, pretty cheap. On the other hand, if you don't put it together properly, it can be a pain in the ass and not be successful.

When there's a crisis is when the private company board is really helpful to calm things down. How are we going to get through this? How are we going to work our way out of it?

Big Ideas/Thoughts

Board meeting haven't changed much – we’ve had a focus on coronavirus that we didn't have before , but board meetings always have talked about risks and how do we deal with risk and what are the risks we haven't foreseen? And how do we think through that process?

One difference is that when you're in person, you have some casual time, you usually have a meal. Something when you're off the topic. When you're on a zoom board meeting, you're on topic, the fraternization, the getting together, the personal aspect of it is missing and so it's harder to gauge how people really feeling or what's going on. When you're sitting across from somebody at dinner, you really get a different approach. And that's particularly true in boards where we have traditionally had the senior leadership team present at the dinners.

And that's key because one of the major parts of being a board member is to make sure that the people are the right people. That they're performing properly, that motivated properly, and develop properly. And that's harder to do through video conferencing.

Going forward, I think you're going to see a lot of closings, a lot of bankruptcies, particularly companies relying on disposable income: airlines, restaurants, hotels, casinos, even clothing. I think it was Bloomingdale's that said they're only selling tops.

On why more private companies are forming boards.

Well, part of it is that the visibility of governance has expanded dramatically. I think a good deal of it as to what the National Association of Corporate Directors has done, to raise the visibility, the standards of sitting on a board have clarified over the years and, many people who have started their own business had worked for a larger company and have seen that there was some efficacy to the board in family businesses. Particularly when family members say we need somebody outside of the family to have a role here so that we can listen to people who have had outside experiences.

Question: One thing that seems to be a constant challenge for many companies is refreshing the composition of their boards. The board that may have been right five years ago is not necessarily the right board today. What is the best approach of reviewing the composition of the board and offboarding when necessary?

Answer: Refreshing the composition of a board is probably one of the thorniest issues any board faces. One way to address it is to have a regular evaluation process. How the board going, how individual board members are going, how committees are being operated. but it's a tough process. I have some ex-friends that I have counseled off boards and, as I sometimes say, it's not who got you here it’s who is going to get you there

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David R. Koenig has been fascinated by and focused on understanding risk virtually his entire life and is recognized as a global leader on the governance of risk. He has held executive and board positions, published across multiple media (including 2 books: Governance Reimagined and The Board Members Guide to Risk), founded the DCRO (The Director’s and Chief Risk Officers Group), co-founded PRMIA (the Professional Risk Managers’ International Association) and advised many companies in a wide variety of industries and sectors, over many years. If you listen to this episode, you will understand that managing risk, in a comprehensive, forward-looking manner is an essential best practice in running any business.

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Quotes

My father introduced me to the stock market when I think I was 10 or 12 and I was just fascinated by what made stock prices go up and down. It's, you know, it's kind of a sad story, but that was part of what I was raised to understand.

“Any company not doing the type of risk analysis you've described is not really looking at its strategic plan in a holistic way. They're missing an important piece in trying to project what it can really accomplish.”

The reason you put a Risk Committee in place is to understand the impact of let’s say cultural changes. Once you start piecing those all together and say, “where does this come back and impact us?” it becomes much more clear that it's akin to understanding your clients better, to understanding market share better, to understanding your competitors better. You have now a much clearer picture about the things that affect the bottom line of your success and what you might do about them. That's the forward-looking aspect of risk management and again, culture is but one example.

The really good Chief Risk Officers are the ones who think like businesspeople. They're not control people. They are people who have the same mindset of an entrepreneur, the same mindset of the head of a business unit. In fact, the best thing that risk managers can be doing within the business units is advising those businesses on how to take risks well. Since they think like a businessperson, questions a board might ask are "What opportunities to take risks better do you see?” "Are we competitive in terms of what it's costing us to get the capital to pursue our objectives? "What aren't we looking at closely enough?"

Big Ideas/Thoughts

I started by helping organizations to understand the risks that they could or couldn't control and ways to change that more to their liking. I worked with airlines, endowments, portfolio managers, banks, all sorts of different entities to help them change their risk profile,

You want to understand as much of it as you can. You're never going to understand every part of it.

Let's, for example, look at factories that pollute. In the 1970s, I grew up not far from Gary, Indiana. We would get some of the steel mill air that would come to our town. Lake Michigan was polluted, there are places up there that you couldn't believe people were swimming or eating fish from. But those companies weren't being charged for that pollution. Then the Environmental Protection Agency came along, rules about clean water, clean air came along and now the Southern shore of Lake Michigan in most places is pristine and beautiful. Those firms a lot of them aren't there anymore, or if they are they've significantly revamped what they were doing, and the problem was that they were not accurately paying for the cost of doing what they did. One of the things that risk management does is give you inputs that you're generally not seeing now - which is: what is the cost of pursuing our objectives or in some cases, the cost of not pursuing something else.

I've been in this risk management profession for 35 years or so and most companies still don't have formal risk management departments.

I think the question really is for a board to have a conversation about how well they understand the complexities of all the systems they depend upon for success. If they feel like they've got a handle on that, they can have a really deep discussion, and if they really feel comfortable that they get those complexities and how they interrelate, you may not need a risk committee. But I find it challenging to think an organization of $100MM in revenue, or maybe even half that size, can't generate enough positive return through a better understanding of risk to justify some investment in risk infrastructure.

I'll just talk about a company I talk about in the book what in essence was the equivalent of a Risk Committee at an executive level that was looking at the kinds of things that would threaten their ability to serve their customers. There's a good story in Texas Monthly talking to CEO, their senior executives around sustainability and supply chains. They started looking at the possibility of pandemics back, I think, 15 years ago and so they knew what to do. They had a plan laid out.

Another example, and this is not a formal Risk Committee at the company at that time, but it would be the equivalent of such, saying, “how are we going to make sure we can stay in business?” If something interrupts our normal facilities for operation?

When I worked there in Des Moines, Iowa, which is where the company is based, it was the largest city at the time in the country to lose its entire water supply because of the confluence of two rivers flooding that overwhelmed the 30 foot high banks of their water treatment plant. Suddenly everything in downtown Des Moines was flooded and unusable because there was no fresh water. The next day I was told to meet at a specific point. I went to that point. I was handed a folder. The folder told me exactly everything I was going to be doing for the next 12 hours and over the next week. We were up and running, managing a multibillion-dollar risk portfolio in about a day and a half. If they hadn't been thinking forward within what was the equivalent of their Risk Committee, that would have been never happened and I can't tell you how many millions we might've lost, because we weren't able to do anything about our exposure

The case for a Chief Risk officer. Once it gets up to the board, you don't necessarily want to have business unit specific discussions about whether you're taking the right risks. It's really a question of how is the CEO looking at this and how is the CEO incorporating all these different moving parts? I would say the Chief Risk Officer is somebody who has that task of taking all these disparate technical skills and technical roles and bringing them into a common risk framework.

Cyber risk has become a massive concern and it's been there for a while, but the DCRO did a survey recently and there's a multiple fold increase in the amount of phishing attacks that companies are seeing because they have employees working home. I've seen people who are really smart fall for these because they're getting really good.

To the extent that our corporations are more effective risk takers, they're better employers, they're better at returning into their community, they're better at serving their customers, they're better at serving their suppliers. All their relationships become better.

If you have a board nominating people to join the board, to replace people who are leaving, they're almost always going to be more naturally drawn to people who are like them. We see that in our social sorting in all parts of our own lives. It's much easier for us to be around people like us, who agree with us in times of threat when an organization's facing a competitive challenge or crisis, like we've got with COVID. But lack of diversity in board composition creates risk.

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Ian Sheridan has been innovating in the financial world, in a variety of roles, for many years. He has brought that innovative mindset to the venture fund where he is a managing partner, Vestigo Ventures. In this episode of On Boards we discuss the fascinating approach in the use of data they employ in making investment decisions and to how they work on the boards with the entrepreneurs that lead the companies in which they invest.

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Quotes

“The boards are small, they're, intimate - business conversations dealing with every aspect of business.”

“The best entrepreneurs are driving the company and their teams … the board is there in this early stage to be a coach, to help them navigate, maybe it could be networking within the industry, whether that's growing the business on the distribution side or working with the regulatory compliance side of things – whatever it takes.”

“We use data to source, underwrite and empower our portfolio companies.”

“What’s different about this crisis? Well, I think the first piece is working from our home. Right? So, how do you stay connected? How do you keep that relationship at the right level and make sure you're really understanding where is that person today and what are they facing and how can I move through that issue? ……I would say as challenging as these times are, and the real pain that's happening across the planet and our country, I do see an unbelievable spirit of innovation and drive from these entrepreneurs that hasn't been shaken through this process.”

Ideas/Comments

FinTech is about two things: reducing costs and providing an delightful experience to the customer. This is what all the innovation and improvements in FinTech revolves around. Now we live in a world very if you can think it, we can probably create it and that is what investing now means.

The opportunity that Cogo Labs affords us is the ability through big data to predict with a tremendous amount of accuracy which is the next IP address in North America that has the potential to go viral. What are the big ideas that consumers are thinking about? And then we train our machines to go through that data and say, Vestigo, these are the companies you should look at, these are financial services or FinTech companies to consider and do it very early in the day. If you know what the early adopters are doing on one side, and then you can see what everyone else is doing, you can run some really cool math to understand and predict the next thing.

When Vestigo invests in a company and becomes part of the board the company gets the benefit of the collective expertise of all partners at Vestigo regardless of who actually is on the board. All partners at Vestigo have been operators, serial entrepreneurs and that is really an excellent value-add for the company.

Boards at this early stage are very intimate and although there are various committees and other governance practices and there are a lot of hats to wear and as a board member one is thinking across the business model. The role as a fiduciary does not change but there is a lot more of a bigger white board to work with.

The CEO or the founders of these companies, these are passionate people who are going to run their companies. and, and the best know how to, how to use their board for counsel and advice, and, and potentially, networking. So, whether as an investor a board member or a board observer, we're here for the people we've invested in and that's kind of a 24/7, whenever they need us, we’re there for them.

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David Rosen has been a CEO, served in other C-suite capacities has served as a board member and is a life-long entrepreneur – and has developed a passion about the importance of boards in private companies. As a result, helped found the Boston Chapter of The Private Directors Association (PDA), a national organization whose focus is to support the owners, board directors, investors, and C -suite executives to improve their board caliber as well as the governance practices for private companies.

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PDA Boston

Quotes

“I won't start a company without creating a board almost from the beginning.”

Big Ideas/Thoughts

There are a lot of governance needs is on the private company side, which is why I believe the PDA is so important.

There is more money on the balance sheets now, as of 2019, in private companies, then there is in public companies, while the number of publicly traded companies since the .com bubble is almost half for what it is today.

The private capital formation into companies has been a tremendous driver of activity and wealth not only in this country, but worldwide

I advise my clients from the beginning that they should think about board governance- after they've learned cashflow balance sheets and cost of goods sold it is time to start focus on governance issues

It really behooves a board to understand the skill sets that are required for the current and long-term future of a business, which may be different from what it was three-five years ago.

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Episode Description

Larry Stybel talks what a board need to do to really do its job properly and the critical role of the Nomination/Governance Committee in that process. Do we have the right talent on this board? Are the board members sufficiently educated to handle their fiduciary responsibilities? And does the board understand that it has primary responsibility for defining the corporate culture?

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Links

https://www.boardoptions.com/

https://www.stybelpeabody.com/

https://www.issgovernance.com/

Quotes

“If you really don't understand the industry that you're in, who is your chief learning officer for the board of directors, and in many cases, by default, the chief learning officer of the board of directors is the CEO and if the board also has the responsibility of evaluating the CEO's performance, is there something wrong with this picture?

Board evaluation is that time when the board shines a spotlight on itself and says, “what are we doing positive and negative to advance shareholder value?"

“Every company that I have ever worked with says we are innovative, and the question is: who's the role model for innovation? If it’s not the board, then where?”

“I think the board has primary responsibility for defining the corporate culture, and then the CEO has the responsibility for executing the corporate culture.”

“The board is usually putting the spotlight on the CEO and senior management. So, in that way, I can understand why putting the spotlight on themselves is not something they actually want to do.

Right it goes like this: “I think performance evaluation is great for you, Joe, but not for me.”

“There is a song by Leonard Cohen, and I think you know it, Raza, “Everybody Knows.” And that song applies to boards. Everybody knows who's making a major contribution and everybody knows who isn't. They just don't want to talk about it.”

“There's a kind of cliché that I that I see among young, inexperienced founders it’s called "the problem solved problem." And that is: we had a problem, you know, 70% of our revenue is coming from one company and that one company is threatening to go to a competitor.

I flew to California and I talked with the CEO and I got him not only to stay with us, but to increase our business. And I go back to my friends and family board and I say, we had a problem, its solved - and they say, great, what's for dinner?”

“I think podcasts like these are, are an excellent way for board people to learn while they're driving or learning while they're exercising.” (Thanks Larry!)

Ideas/Comments

If a board wants to keep what is often a superficial sense of collegiality, they don't want to do board of directors self-evaluation because you're going to get to issues that one or more board members are going to be uncomfortable with.

When board self-evaluation is defined as an event, it usually is a onetime event.

If a board is really serious, they're going to do board of directors self-evaluation.

People think of diversity in many ways. Gender diversity is one of them, racial and ethics diversity are others but the way, somebody does problem solving is another important dimension to add to the matrix of what you need on a board to make it truly diverse.

I have encouraged CEOs to do on boards is to send something to the board even once a month or a one pager. It could be a snapshot of financials. It could be three or four sentences about what's going a brief, but helpful, update so that when you're walking into the board room, or even when you're getting the materials for the next board meeting, you have been updated all along. No surprises. The board should not be surprised. You should not walk into the board room and find out something's been going on,

What happened with Equifax (theft of the credit records of 143 million people) should be part of every board education course., First, they did not immediately inform people that their data had been stolen. They delayed it for six weeks, which gave the hackers a chance to really use the information they had stolen. And the second thing, maybe even more egregious, members of the senior management team actually sold shares of stock during the time before the public knew that the breach had occurred so they would not take a hit on their stock shares. And this gets back to corporate culture. So, what was going on at Equifax that made senior executives think that what they did was okay to do?

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Planning for a crisis is not a luxury and boards must be a very good at crisis management - we’re seeing just how important that is right now. For this topic, we’ve assembled an incredibly experienced panel - our first panel episode - to delve into the role that boards are playing, and must play, during a crisis.

Jay Lorsch Bio

Jay Lorsch is the Louis E. Kirstein Professor of Human Relations at Harvard Business School. For the past 35 years he has specialized on the functioning and operations of corporate boards and is widely recognized as Recognized as a leading expert on the subject. His full bio here: https://www.hbs.edu/faculty/Pages/profile.aspx?facId=6502

Ellen Richstone Bio

Ellen Richstone is a former Fortune 500 CFO and former CEO of a private company. She has been sitting on public company boards for over 15 years- on micro caps up to Fortune 500 in size. She is currently sitting on the board of three public companies in : Technology; Industrial and Clean Tech. Her prior board experience includes companies in: Consumer Products, Bio Tech, Financial Services and Pharma. She also sits on the Board of NACD New England and is both an NACD Board Leadership Fellow and also received the first Distinguished Director Award from the Association of Corporate Directors.

Rick Williams Bio

Rick Williams is Managing Director of Williams Advisory Partners, LLC. He has a breadth of experience as an executive and board director for technology companies including medical technology, software, and financial services. Rick is a nationally published thought leader. His soon to be published book entitle “Create the Future – for your company and yourself” is a is a “how to field guide” for leaders who want to think creatively about where to take their organization. Williams Advisory Partners provides CEO and board advisory services for middle market technology companies. He was Chairman of the Board of Point Care Technologies and formerly was Chairman of a quasi-public bank/VC firm. Rick is on the board of an ocular drug delivery company and a leading company in gene therapy. Rick is past President of the Harvard Business School Association of Boston. He was a management consultant with the global consulting firm Arthur D. Little, Inc. He is a physics graduate of the University of Pennsylvania. www.WilliamsAdvisoryPartners.com

Quotes

“Clearly, number one is the focus on employee health and employee safety. The takeaway I would give on this area is the need to balance empathy, safety and yet execute where execution is still critically needed.”

“There is a demand for increased communications with all parties promptly, clearly with increased transparency, and this is all stakeholders - employees, customers, supply chain, and of course shareholders.”

“How does all of this change our long-term strategy - or not? What pivots should we be making within our strategy for the long term?”

“I think it's very, very important to have board leadership and to recognize that one of the board's primary duties is to make sure that leadership is in place and functioning effectively, not only with the board but with management.”

“I think the “trick” of being a lead director or a chairman is to figure out how to build a relationship with management through the CEO and how to maintain cohesion within the board so that the two groups, that is management and the board, can work in a collaborative way for the good of the shareholder, for the good of the company.”

Ideas/Comments

We're going to rethink the reliance that companies have on their supply chains and critical resources: are they exposed to getting cut off in the kind of crisis that might happen over time?

In today's world, boards have to be ready to move in and deal with a crisis - whether the crisis is externally generated like this one is or whether it's a CEO who suddenly has a heart attack or decides he wants to quit, the board has to be very good at crisis management, and that really goes back to the leadership of the board.

Succession planning is being done very differently than the way we traditionally have done it at the board level, given that you need to really dive down into many levels, which the board doesn't usually do. The reason we must do that is because, as people get sick, you need to make sure that the critical areas are covered. We’re learning lot about management at levels below the very top.

Has there ever been a time when honest, authentic communication has been more important for a company?

Messaging must be realism about the challenges facing the company, a message of brutal honesty as to what is going on and what the threats are - and at the same time, a message of hope.

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George Davis has been a trusted advisor to multinational, public sector and private equity backed organizations seeking guidance on critical boardroom issues for many years. We discuss with him what boards of directors need to do in a crisis, how this crisis is different from those in the past and what it may mean in the future for companies and the boards that serve them.

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Links

https://davispartnersgroup.com/

Quotes

A good board member understands their role and how to be supportive from a governance perspective and to fight the inclination to become a part of the management team. 10:38

I try to counsel people to say, look - this is when the CEO needs more room to breathe, to be able to pivot, to react. Don't choke him or her with a hundred questions because you're concerned about something you have not agreed to that the board thinks is a concern. 11:44

Some of the fundamentals that have always been true will, post crisis, be even more of a focus as it will be clear how important they were. A truly diverse board, with many different perspectives and skillsets, is far more likely to be able to advise their CEO than a board that wasn't as well constructed. 17.19

I have a strong belief that after this crisis board appraisals and board succession planning will become a hot topic. Just like CEO succession planning became a hot topic after the 2008 crisis. In each case the question will be: did we have the right people around the table? 19:36

How do you layer the competencies and the matrix skills of the board to match where the future of the company is going to be? And with this huge consumer disintermediation that's going to happen post Covid-19.

Fight the urge to be false predictions of overconfidence. Be extremely clear in your communications, honesty right now is way more appreciated than anything. So, if it's uncertain, say it's going to be uncertain. If it's going to be hard, tell them it's going to be hard.

I think false positives destroy morale. 25.50

Ideas/Comments

Crisis management protocols and feedback loops and risk mitigation are pertinent to today's crisis, but in the past, everybody felt that it was either an economic turn or there was a cycle and we’ll pop out of it. The magnitude of change in board rooms today is quite different.

If you've developed a strong foundation of trust and transparency with your CEO and their team then it's going to be a lot easier to say:

“Go do what you got to do. We just need a briefing. We need a one hour. We don't need a long board meeting, for example, because we know you're going to do the right thing. We know you're going to tell us what we need to know, and we know you're going to tell us the truth about it. We trust you.”

The boards that don't have that relationship are going to struggle ansd it's going to highlight this fundamental thing that we talk about all the time about having that relationship with the leader of the company.

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Joe Baerlein, a nationally known strategic communication advisor for some of the country’s largest companies, trade associations, large non-for-profits, talks about what matters: always consider the long-term impact on the company’s brand and reputation - and never be afraid of providing truthful information or being proactive about providing it.

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Links

https://baerleinpartners.com/

Message from Arne Sorensen, President and CEO of Marriott International

https://twitter.com/MarriottIntl/status/1240639160148529160

Quotes

If you are a CEO of an organization, you need to say we're doing everything we possibly can. We're observing everything that the CDC, the various state departments of public health are telling you. But we want you to know that we care about you. We are one community…this will eventually recede if we do everything.

If the CEO of a particular company can't deliver that message and come across as authentic after two tries, then I would say that's not the messenger. And you’d have to think about who might be the best messenger. It could be the senior vice president of health and safety who may live this in his or her bones every single day. It could be the chair of the board - because people will smell in a second if you're not authentic. 13:08

I think this [Covid-19] changes everything. Why? Because it's unknown and I think smart CEOs are going to look at their board and say, what do you think? 7:46

[Information you provide to the press] must be 100% accurate because you do not get the proverbial second opportunity to make the first impression. 15.10

Ideas/Comments

Companies have to have a communications vehicle that can speak to all of their publics, broadly defined, meaning who's important to them: their employees, their customers, their vendors, the community where they do business. And they have to be able to talk in real time.

During the coronavirus crisis the separation of management and governance for boards will shift - it's all “hands on deck.” Companies need the expertise of their C-suite, of their outside experts and their board now more than ever because they need to figure this out, together.

When there is a crisis, the company's brand and its reputation is a responsibility of the board.

When an unknown hits, you should at least have to have some operating principles on how you would react. What are our highest risks? What could happen in this company from A to Z? How would we manage those risks? What level of resources would we need? What are the five worst things that could go wrong? What are the first five things you do? It depends on what the business is, but it allows you to have a game plan, that you will alter depending on circumstances, when and if something bad happens. But at least you have a game plan on how to respond when a crisis strikes.

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John Hession, legal advisor, business advisor and angel investor, holds the world land record for number of board meetings attended. He’s been working with emerging growth companies for over 35 years and he has seen it all.

He talks about the discipline, tough love and results required if investor backed companies are going to be successful. It is a message that all boards would benefit from listening to and following.

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Links

https://www.morse.law/attorneys/hession_john

https://www.firstlightdx.com/

https://seraf-investor.com/compass/article/key-angel-investing-tax-issues-infographic

Quotes

Well, if they're investor backed (companies), you know, there's an insistence on having a good strong board and that often means that simple phrase: tough love. 3:01

If you don't hire a good board and build a good board, you don't have great guidance for the company. ….an investor-backed company, it needs results and oftentimes they're going to be a more difficult, they're going to be more challenging on management strategy. 4:00

Investor backed boards, are much more conscientious, much more deliberative, much more demanding on management (than most private company boards). “You need to solve this problem.” 8:33

I'm delivering this advice (to you as CEO of the company), Joe, and it has to come through everything. Because I would like to see you succeed. And even if I have to give you tough love, it's not personal. It's because I want to see you succeed. 15.47

You can't have the CEO/founder be the chair. If you're going to build an outside board, the chairperson, usually has to be someone who's got a lot of scalps on the belt, a lot of scars, a lot of experience, and been involved in boards. 16.29

Bill Moffitt, was probably was one of the best chairs I ever worked with. He had a way to drive the discussion, drive the agenda, to stop tangential discussions to stay focused on those action items that I talked about and demand performance and, on the action items.

He was the most masterful, yet at the same time, urbanely diplomatic chairman I've ever had the pleasure of working with. He was just so good about assigning tasks, not only to the management team. But to other board members. 17.13

What if you don't find Mr. Perfect (as a Board chair)? How do you find the next level? How do you find a chair that you can make it work? Because the person you described, you just said he was one of the best chairs you've ever seen. Not everyone's going to deliver all the goods. What do you do if, you can't find that person or the chair is not that person? 18:49

1202B stock (capital gains stock) …. is the heart and soul and sinew of American capitalism. Why? The first $10 million of gain is zero capital gains tax. Now, who said the uncle Sam will, they'll give you a gift from town to town Joe. 23:09

Big Ideas

The disciplined approach used to identify board members in investor backed companies should apply to all private company boards as well. It can be a board of five, seven, eleven - it doesn't matter. Exactly what do we need? What are the skills, expertise, attributes that we need in this person and let's go find him or her.

It also applies to off-boarding unproductive board members. It happens that there may be a more definitive incentive to do it in investor back companies. But what's the difference between those companies and a really productive, successful family company board where some of the board members really are just mailing it in?

Transparency and trust are fundamental to the management/board relationship, no matter what size company, what type of company. And “brutal honesty” goes both ways. So a founder has to be brutally honest with himself or herself.

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Beth Boland is a force to be reckoned with. Named one of Massachusetts “most influential lawyers,” Beth was first initiated into the world of shareholder defense working as a clerk for a district judge on the Mike Milken and Ivan Boesky cases. Now chair of Securities Enforcement & Litigation Practice at Foley & Lardner LLP, she also serves as President of the New England chapter of the National Association of Corporate Directors (NACD).

An expert on how boards operate, she champions the expansion of diversity on boards and has worked tirelessly to bring gender diversity to the boardroom.

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Quotes

“I think folks are really growing away from the idea of thinking of their board as a potential nuisance that they have to deal with, and [thinking of it] as one that is really a strategic asset.” [12:10]

“I guarantee you that there are some rock star women and aspiring directors of color who will knock your socks off.” [19:05]

“Take care of your people, who will take care of your product, which will take care of your shareholders.” [27:40]

Big Ideas

The increasing interest of private companies to run their boards more similarly to their publicly held counterparts. [09:50]

Board expansion and diversity. [14:53]

Delaware courts’ decision to hold boards accountable for additional stakeholder interests. [22:38]

Links

Beth Boland's Website

Beth Boland on LinkedIn

B Corps

Business Roundtable

NACD

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Yvonne Schlaeppi is passionate about corporate strategy, and she believes it’s one of the most important things a board can do for their company. Spending a significant amount of time on board work, across many companies and several continents, Yvonne is highly experienced and enthusiastic in her work as a board member.

Having built a strong background working on boards in the U.S., UK and Europe, Yvonne shares her insight into the differences in boards across countries, how to navigate difficult decisions, and what we can learn from observing other boards in action.

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Big Ideas

Differences in structures and culture between U.S. and European boards. [08:27]

What we can learn from observing other boards. [22:31]

Quotes

“I do believe that being more present and involved and learning more about the company and what it’s going through makes for a more effective board.” [05:45]

“Most boards would be well-served to spend more time on strategy, which is really where they can make their best contribution.” [27:27]

“The baseline for good board practice is to ensure, as best as you can as a board member, that your board undertakes decision-making in a deliberative, prudential and reasoned way.” [30:03]

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It’s easy to think of companies as big, faceless organizations, valued only for profit margins or stock potential. But it’s precisely when organizations are viewed only by the numbers, and not by the people working within them, that company culture suffers and things can go south.

Rick Williams knows that the key to success is creating an atmosphere of openness and trust that makes for a great board of directors or advisors, and a healthy company overall. Rick spent many years as a consultant, founded his own real estate investment company, and returned to consulting once again. He has been an executive, board member and board chair - in addition to mentoring CEO’s. Now authoring his first book, Create the Future For Your Company and Yourself, Rick shares his most valuable insights into corporate culture and governance boards – namely that the best thing you can do for your company is to honor the people within it.

Links

Arthur D. Little Consulting

Boston Consulting Group

McKinsey & Company

Quotes

“It’s a very human process…The truth is [companies] are collections of people working together.” [06:42]

“You have to be somebody who’s an empathetic listener.” [11:40]

“The leader has to set cultural expectations. So it has to be expectations for openness, trust, willingness to actually engage in difficult conversations. That’s where the culture part of it comes in.” [20:42]

Big Ideas

The nexus of Williams’ new book and how it can benefit companies as a whole. [06:56]

Creating an atmosphere of faith in transition of leadership. [11:30]

How to develop a culture of trust and openness. [21:04]

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Episode Overview

Larry Siff joins hosts Joe Ayoub and Raza Shaikh to explore what makes a board of directors effective and productive, what qualities makes a strong and valuable board member and how can a board add value to and help drive a business to achieve its goals.

Larry has deep and extensive board experience, both as a board member, averaging 6 board seats a year for over 30 years, and as an advisor to hundreds of companies, half of which have been family businesses. He has been the CEO of Neptune Advisors which helps middle market companies position themselves for strategic growth, since founding it 10 years ago. He is also the CEO of C-Level Community, a membership based platform that connects middle market leaders, which he founded 3 years ago, and has served as CEO of 7 middle market companies.

Highlights Include

Larry’s first board was a non-profit board at an early age and he has been driven to give back to the community throughout his career. Importance of understanding the mission from the perspective of those that the organization serves. A person served by his first non-profit said to him: “You brought the outside world back to me”
C-Level Community – they have consistently hosted some of the most interesting breakfast gatherings in the business world.
What sets the stage for an effective Board - an actionable, viable business plan, and a board built on the skills/expertise that will drive that business plan to the future.
Discussion about building a business/strategic plan with actionable steps – and the role of a board in creating that plan.
A business plan should define priorities and how to achieve them. It must be an active, workable, livable plan – everyone needs to understand their role in servicing the plan. And everyone has to be vested in making the plan succeed and be accountable for their role in doing so.
Attributes of a strong Board member. Experience helps - one way to gain board experience is in the non-profit world.
A board member must understand that is a fiduciary obligation to deliver enhanced strategic value add that accelerates a company's growth. You've got to be able to mentor the CEO and the senior management and build a culture of both innovation and accountability.
A strong board culture, built on trust and transparency, are paramount. Among others things, communication should come to the board from the CEO every month – it can be an email or a call, but the board should not go three months without knowing what's happening in the business
Preparation by board members should always be done before the board meeting, not during the meeting. You should never see a board member reviewing information during the meeting for the first time or hear a question that is clearly addressed in the materials.
PowerPoint presentations should be sent in advance – focus on key issues during the meeting rather than “dog and pony shows.”
Boards should focus on long term strategy 3, 5 and 10 years from now. For the board to add value for the company they need to focus on the success of the company. How do we make this company successful? How can we as board members really focus on the future? Not on yesterday, not on today, but on the future and making sure that's where the board is spending its time.
The board cannot be afraid to challenge. There has to be constructive dissent. That said, when a decision is made, even if you don't agree with a particular decision as a board member, the decision has been made.
Board members have got to think and act like an owner, whether they actually own stock or not.
Challenge of off-boarding: easy to ask someone on a board, very hard to ask them off! A lot of CEOs or Board chairs don’t want uncomfortable conversations and hesitate to have one they think will be uncomfortable when it comes to asking someone to leave the board.
A conversation with an unproductive board member starts with the expectations set when that person joined the board. You've defined the expectations up front, and by doing that, when you have a board member who's not performing, you can to sit down with the board member and have a conversation.
Value of executive sessions with and without the presence of the CEO.

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Co-hosts Raza Shaikh and Joe Ayoub discuss the January 2020 launch of their podcast On Boards Podcast: A Deep Dive at Driving Business Success.

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.

On Boards Podcast: Recent Episodes

Joe Ayoub & Raza Shaikh