Keys to the boardroom

Former banking executives who now serve on boards discuss how to get onto a board, what the duties entail, and what the pitfalls are. 

Transcription:

Martina Cheung (00:12):

Well, hello, good morning. We're delighted to be here with you. I'm particularly excited to be able to have a conversation with these two incredibly impressive women, Jane and Maria. I thought we would start with, maybe, Jane and Maria, you could just give us a quick overview since this discussion is around boards, on which boards you're on.

Jane Sadowsky (00:34):

Thank you. It's a pleasure to be here. Thanks to everybody in the audience. I serve on two public company boards, both in the mining space. One is a Sao Paulo based zinc and copper mining company. One is a Toronto based gold mining company and a private equity company, which is in the lottery and scratch off ticket space.

Maria Morris (00:58):

I don't have this exciting portfolio. I'm on the board of Wells Fargo and S&P Global and one private equity firm, which is Resolution Life.

Martina Cheung (01:10):

Fantastic. And we were just speaking beforehand at s and p, we've been very active in helping our senior leaders to get board memberships. So I've actually previously served on the board for a public company, which is the largest credit rate... credit rating agency in India, Crystal. And actually Maria and I share membership of a nonprofit board also which was sponsored by S&P. So before we get into the questions for Maria and Jane we were lucky and thank you. Thanks to all of you who responded to the poll questions that were sent out. So I thought we could take a quick look at those poll results before we jump in here. Here we go. So we have how many of you are on a board and not actually very, very high percentage on a board? That's fantastic. And the second question, there you go. How much more relevant could this conversation be given how many of you're planning to join a board? All right. Well let's get started with a question for both of you. What led you to your first board, whether it was a corporate board and non-profit board? Maybe Jane, we can start with you.

Jane Sadowsky (02:26):

So I had the idea that I think a lot of you in the audience have as well, that having a chapter of your career, which was giving back and meaningful board service could be a full-time career or a meaningful part of your career. So I started to look for a board at the beginning of 2012. I didn't sit on my first board until 2014, so it was a long process for me. I still on that board and have since been on a number of other boards. So I'd just like to frame what happens with board service according to numbers that will come out at the end of the year, across the s and p 500, there were under 400 seats that refreshed in 2022. So about 5,000 seats, about 400 refreshed, approximately half of those go to outside search and half of those go into the network that board members and their social networks already have.

(03:35)

So we're looking at 200 seats in any given year for the S&P 500, we don't have a supply problem. We have 200 women in this room today. If each of you took one of those seats would be done for a year. Unfortunately, there are a lot more people looking for boards. We have a demand problem, so board refreshment is not as rapid as any of us would like to see added onto that. New boards that come out of IPOs, SPACs, things like that have slowed to a drip this year versus last year. And of course, any m and a activity that you have when companies combine the board seats go away. So looking for a board, it's important to frame what kind of board you want to be on. There's a lot more than S&P 500. There's private equity, and I think Maria's going to talk a little bit about that.

(04:29)

There are family company boards. There are not-for-profit boards, which we'll talk about in a minute, but to really understand what it is that you're looking for and why, personally, I wanted to be on a public company board. I wanted to be a mid-size board, say one to 10 billion in market cap. And I wanted it to be somewhere where I had a lot of experience or experience adjacent. So I spent 25 years in as an electricity banker. Mining is not electricity, but it is commodity. It does use a lot. So as you're framing your story, think about unpacking what it is that you do and creating those adjacencies so that you can give yourself the widest possible permutations of where you could serve as a valued member of the board given the supply demand dynamics that I just spoke about.

Maria Morris (05:28):

So Jane and I just met through this process but our backgrounds are very similar in terms of how we decided around board service and the next chapter of our careers. I had been in insurance for 34 years. I worked for the same company that iterated many times and had many senior corporate roles. And I think one of the first things that you all have to decide is do you want to have a corporate trajectory? Do you want to have a corporate trajectory with a board or do you want to go into a portfolio of service as a next chapter? My dad, who worked until he was 91 and a half years old, told all of us that you have to be proactive with your career. And specifically after 50, that nothing good happens after 50 unless you plan it. So when I was turning 50, I stepped back and said, do I want to be an executive?

(06:18)

I had been on the executive group of my company for many years. Did I want to go off and do something in the field somewhere else? Did I want to consider ceo? And I made the decision that I really wanted to have a next chapter in board service. And so very similar to Jane, one of the first things that I did, and I would just recommend all of you that are not on boards to consider, is talking to a number of people that are on boards. I was fortunate, I had a great mentor from the last session. We talked about this who was on the MetLife board of directors, a woman who took me out to lunch proactively and said, I really think you should consider a board service and I'd like to talk to you about it, which was fabulous. And if you don't have a board member that's reaching out to you, feel free to reach out to them because they will be happy to help you think it through.

(07:06)

And when we did that I started to realize that I needed to change my CV and change my bio, the storyline, because what really gets you an executive position is very different than what's going to be attractive from a board position, much more around capabilities and competencies and really fitting in a synchronous way to what the board's trying to accomplish with the company. So as an example, I have a technology and operations background and a marketing background in addition to running major PNLs. I didn't know that was going to be so critical for my first board role at s and p Global, but when you start reading the proxies of the companies that you would be considering, you'll get a much better feel for what they're looking for. And you may have seen some of this tech background, operational acumen, p and l leadership, international and global experience.

(08:02)

And so you can start looking at your own CV and your own capabilities from that perspective. I joined my first board s and p Global when I was still an executive at MetLife. And the way that that was made possible was that my CEO did go to the board and recommend that we all be in a position to take on one public board. And that's another big piece of this puzzle, which is having the tone from the top, having your senior executives really encourage you to be on a board while you're still an active corporate executive. And by doing that then when I was retiring, I was already well on my way to interviewing for other roles. And then Wells Fargo came to be. And you may wonder Jane and I both said we wanted to stay adjacent to our backgrounds. Certainly for first board, that's critical. You could talk to other board members that didn't stay as close. They've gone into other industries, but their first board often is adjacent to what they've done.

Martina Cheung (09:00):

Wow. So much to digest there, particularly the comment on after 50, I'm going to take that one away with me for sure. So for some reason, I don't know why, but for some reason I get these emails from the Financial Times every week advising me on taking a course on prepping for a board. I have no idea how I got on that mailing list. But Jane, any courses that you would recommend or that you did in prepping for stepping into boards?

Jane Sadowsky (09:26):

 for those of you who are lucky enough to live in New York City or another major city, we are content rich. The professional services providers, whether they're banks, law firms, accounting firms, et cetera, will be able to help you get up to speed on governance areas in general on FCPA, AML, DEI, ESG, all of these issues through webinars, through newsletters. So try to get yourselves on those. Try to pay attention to what state of the art is what's happening in the Delaware Chancery Court. But more important, try to get yourself invited to when they have in-person presentations. Because I think what we would all agree to here is networking is so essential. And I know people groan when you say that, but think about what I said. About 200 seats going to search, 200 being found by networking.

(10:26)

We all have a recency bias. So you're going to, if you're asked to recommend a board member, you're going to recommend the woman you spoke to at breakfast rather than the one that you spoke to four months ago. So there be present. When I first got on a board, I did take a foundational board class from the National Association of Corporate Directors. Since that time, it's been almost a decade, there are any number of classes and certifications that you can get, you can certified in DEI, ESG, all sorts of cybersecurity is a big one. And those are useful to a limit. Remember, if you are certified in a one day or one month course, you are not an expert. So it's an enhancement. It is not a check the box in a board proxy for your skillset, but the education opportunities are abundant. Many to most of them are had at nominal cost or no cost at all. And again, reach out to your networks to make sure that you're on all of the right invite lists.

Maria Morris (11:34):

Completely agree with Jane. I did not take classes prior to becoming my first board seat, but I was on the boards of subsidiaries of my company. And as part of that, our company, which was insurance, so financial services, there was a lot of wonderful information. The company on governance, and I would just recommend for those of you that are on boards, maybe many of you are on your own subsidiary boards or FinTech boards which are very popular in the banking space as well. Try to get onto a board if you can, through your own company sponsorship because you're going to learn a lot about what matters from a governance perspective. And then I supplemented certainly Spencer Stewart had placed me, they have a very good new board onboarding program. And I will tell you one of the best parts of that is the networking, because obviously you're going to get a lot of great things about CEO succession and strategy and all the things that Jane just outlined. But you also get to network with both new and long-term directors that are outside of your industry sector that have different points of view. And frankly, that's been invaluable. I can't tell you how many times I've picked up the phone or texted or went on LinkedIn to say, do you have five minutes? We're dealing with something. I'd just like to get a different point of view.

Jane Sadowsky (12:56):

I can't stress that point enough. Talking with other board members from other countries, from other sectors is what enables you to develop a portfolio of thinking that allows you to see around the corners that once they matriculate within a company, it's urgent. So you have that muscle memory that you're building through all of the networking that you're doing.

Martina Cheung (13:22):

So in addition to this, fantastic advice on for the first board, picking something that's sort of adjacent or close to your areas of expertise what do you look for in terms of cultural fit? Maria?

Maria Morris (13:38):

One of the things I think we're probably all very similar certainly as women we've been socialized to be everything to everyone to be ready for the next role and completely ready before we even put our hands up sometimes. And so from my perspective, I thought I was selling myself and actually if you are already getting an interview for a board, you already made it. Your credentials are your credentials. So really it's more stepping back and having a two-way dialogue to say, are my capabilities the right capabilities for this firm? And then what do you look for in terms of board collegiality, board collaboration, et cetera. And so I would say that what I looked for was, number one, I went through all of the public materials I could find every time the CEO spoke, anytime the board chair spoke so I could get a better understanding of the culture of the company.

(14:38)

The CEO for me was really important. Now CEOs come and go, but the CEO's important because normally the CEO is either CEO and chair or very influential in the board. And I wanted to make sure I was in a company that had good values that the CEO actually engaged the board both for governance and for strategy because I didn't have an interest in just being a governor. And then the board itself, so the nice thing about s and p Global and Wells Fargo is I met with a number of directors. And one thing I would say for those of you that are going to go through this is if they only want you to meet with one or two people on noman gov nomen nominating and governance committee, you probably won't get enough information to make a good decision about whether it's going to be a good fit.

(15:24)

And I think most boards do have you meet with board board members, but it's really important. And I think that the next thing is we are in tough times and we're going into tougher times. Most of the management teams have never seen the economic realities that we're going to live through in the next couple of years. So it's really important that you're going to be part of a board where you have the kind of collaborative relationships that you feel like you can establish trust with each other because you are going to be dealing with stuff that no one's dealt with. Think about covid, et cetera. So when I think about both the boards that I'm on, I'm thrilled with the fit both in terms of why I'm there, what I think I could add, but probably more importantly, the phenomenal board leaders that I get to serve with and the relationships we have to enable us to triangulate things and really think through the issues.

Jane Sadowsky (16:17):

Yeah, I think that's really very important. I'm going to pick up on what you said about CEOs. The average tenure of a CEO right now is much shorter than the average tenure of a board meeting of a board member. So you will be through at least one CEO on every board that you serve. The other thing is pay attention to the little things. So Maria's absolutely right, meet as many board members as you can, but know who you are. So some of the questions that I asked, are there assigned seats and the board meetings, which made me feel like that was a sense of the flexibility of people. Could they take different perspectives by literally sitting in different parts of the room? Will you be required particularly for people that have substantial things in their portfolio other than this particular board, is it a requirement or an expectation that every board member sits in on every committee meeting?

(17:13)

If you would like to sit on a committee meeting and it's not an expectation, will you be allowed? What is the onboarding process like? How do you get reviewed? How do you get to review other people? What is the communication policies with board members or with executives in between meetings? So all of these can give you a sense of where's the company with its governance? Is it somewhat consistent with the way I know I can add value best? I can communicate best, and sometimes you can ask these questions and nobody's thought about it. So then you have opportunity to give your perspective on why something is an important issue. And

Martina Cheung (17:55):

Jane, just sticking with you how are you finding the timing commitment? Is it more or less than you thought?

Jane Sadowsky (18:05):

Okay. So when I started a decade ago the pundits said the average board seat would take about 150 hours a year. Now they say about 250 and they're behind the times between everything that Maria said, whether it's pandemic, supply chain, employee turnover, et cetera. Every committee has more meetings. If your audit, there are new disclosure rules. If you're compensation, there are new compensation guidelines. If your risk, oh my gosh, it's everything. So you're having more committee meetings, you're having more frequent board meetings just as a universal statement. And then any board that you are on can have its own specific reasons why you're going to be meeting more. You're entering into a transforming transaction. You've had a bust in the numbers and you have to restate. So that having that flexibility, you do move like a collaborative organism. So if you are the one person that consistently can't make the board calls and needs to be scheduled around, that's not a great, that's just place to be. So having that embedded, embedded flexibility and having earned the right to say to people on that board or other things, Hey, I can't do this for this half hour. I need to step out here is here's what I can do. And really use all of your negotiating skills to make things happen because it's dynamic. But board work, urgent board meetings really don't stop and wait for people.

Maria Morris (19:48):

And I would just say if you are a sitting member of a company, just being very clear right up front to say, I can join. I can be part of committees, but I may not want to chair right now and here's why. I mean that's all fine. And being as long as you're very forthright with regard to what commitments you can make. Because I would say certainly being a chair of an audit committee and a chair of a risk committee and a regulatory compliance and oversight committee, I'm meeting a lot more than other people because of the nature of the roles that I'm playing. There are other committees that meet less often during the years. So don't make the assumption that because it's a lot of hours by the way, which it is because what Jane didn't talk about is all the prep. You have to have the time to prep, to be in the moment and ask the credible challenge questions. You need to really think about whether the industry well enough to be credible in the room. So there's a lot of prep that goes in it, but I wouldn't say that if you are a sitting executive that you cannot be on a public board. It's you've got to pick really carefully.

Jane Sadowsky (20:55):

And the pandemic made everybody pretty fluent in hybrid meetings. So even with boards that want to meet in person again, if you have that kind of conflict, they will generally let you participate by phone. So great advice for the first board. For the second board, the first thing that you really have to do is check the schedule. Reporting quarterly reporting is basically right on top of each other for most public companies. So make sure that you don't have all those conflicts in your schedules first off.

Martina Cheung (21:32):

All right. So I'm going to ask a two-part last question for you. So the first part for both of you, the first part is what types of skills would you recommend to the audience they think about developing as they're thinking about joining boards? And then the second is, is there anything you would've changed about your own careers as you were preparing to be members of boards?

Jane Sadowsky (21:52):

So thank you for that. When I started thinking about board service back a decade ago, or I'll go further back in my career, women serving on boards. It wasn't even part of our field division. I started in banking in the 1980s. It wasn't discussed. It wasn't done if there were women on boards, they were bold-faced names. It just wasn't something that I thought about. So had I thought about it, I would have taken some detours in a career that was pretty much soup to nuts, investment banking, more investment banking et cetera, and gone into some of the opportunities like Maria did to work in operations, work as a chief of staff or something like that, to gain that kind of exposure, to really understand what it takes to operate a company, to have a p and l that was broader than my own p and l as a banker.

(22:54)

And I think that those are such amazing opportunities if you can navigate through them. The prior conversation was on mentor, mentorship and sponsorship. Maria said she had great sponsorship at her company. Seek that out. If it's not available or not apparent to you, try to make that happen. If board seats for executives aren't available at this point, try and find out why. What guidelines could help enable that and get what it is that you need to take every advantage that you have from the political capital that you have earned in your careers thus far to try to make the case while you're sitting on a board while you're working full-time is good for the company, good for you, good for women overall

Maria Morris (23:45):

Et cetera. Yeah, I mean, I'll just take a different tact on this since we talked a little bit about my career earlier. I do think having done p and l roles as well as operational and functional roles was a big help for me. But what I wasn't particularly good at was networking. And very frankly I had talked about that age 50 thing. I had taken on a new role around age 50 and I took on global relationship management for the company in addition to my other responsibilities. And I had a male colleague coming in from banking who was running it for us. And he came in and he shut the door one day, had a huge amount of respect for him, still do. One of my mentors. And even though he had worked for me, he was one of my mentors, and he shut the door and he said, Maria, your clients love you.

(24:31)

Everywhere I go, they talk about how engaged you are, how much you know about their business, et cetera. He says, but when I ask other people who are not your clients, they don't know who you are. And it really struck me after having worked so hard my whole career, that was my fault. I hadn't taken the time to network and get to know people outside of the roles I had as an executive. And I would just say, going back to what Jane said earlier, in addition to your actual cv, really that network matters. And so what I started to do at age 50 was I started to go around and say, I'm interested in doing board work. And I would just reach out to people that I saw at conferences. I would reach out to them on LinkedIn and people took the call. And very similar to I what I think that other people said. And what was great about that is I got a lot of advice about had a network because networking for networking's sake, none of us like to do. But how to network and then what the really pragmatically, how much time you need to put into it so that you have a broad enough group of people that when half of those board seats that open every year are board networking opportunities that more people when your name comes up are nodding. Yes.

Martina Cheung (25:46):

Well, fantastic advice, fantastic discussion. We're just about out of time, so let's say thank you so much to Jane and Maria. Thank you.