Month: May 2021

26. Annalisa Gigante on Innovation and ESG: A view from Europe

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.

Thanks for listening!

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

Links

Annalisa Gigante Bio

ILI.Digital – The Goldilocks Zone

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.

Transcript:

Joe: Hello and welcome to On Boards, a deep dive at what drives business success. I’m Joe Ayoub and I’m here with my co-host, Raza Shaikh. On Boards is about boards of directors and advisors and all aspects of governance. Twice a month, this is the place to learn about one of the most critically important aspects of any company or organization: its board of directors or advisors, as well as the important issues that are facing boards, company leadership and stakeholders.
Raza: Joe and I speak with a wide range of guests and talk about what makes a board successful or unsuccessful, what it takes to be an effective board member, what challenges boards are facing and how they’re assessing those challenges, and how to make your board one of the most valuable assets of your organization.
Joe: Our guest today is Annalisa Gigante. Annalisa has been an [00:01:00] award-winning innovator for thirty years, with a track record of commercial success, launching and building multi-billion new businesses across different industries; from life sciences and chemicals to services and digital technologies. 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.
Raza: Annalisa is also an advisor and thought leader in innovation, leadership, and corporate governance. Among other things, she is chair of Foundations for Learning, the co-chair of Women Corporate Directors in Switzerland and RemCo member at Jagex, the Cambridge-based game studio.
Joe: Annalisa, welcome. Thanks for joining us today from Switzerland.
Annalisa: Such a pleasure to be here.
Joe: We’ve talked a bit about ESG, but I wanted to start with [00:02:00] a headline from a recent article that you sent me from Bain that starts with the following statement: “A wide gap exists between Europe and the Americas when it comes to embracing global standards for responsible and sustainable investment.”
I’m not surprised to hear that, but I’d love it if you’d talk a little bit about that,
Annalisa: It was so interesting to see that analysis because that one was in particular on private equity funds and it showed that eighty percent of funds based in Europe have signed up to some sort of ESG tracking, but in the US or in the Americas, actually it was so much lower. We were at forty five percent, which is less than Asia, at fifty five percent.
I thought this kind of told that story so well, the discussion around ESG in Europe has been there for quite a while, perhaps not under this particular umbrella, which is now what everything is coalescing around, but it’s [00:03:00] been part of how we think about what a corporation should do, what kind of things should be highlighted, and it’s really important to see investors stepping up their pressure in these areas.
Joe: I agree. It did strike me that the percentage of companies that had signed up for something under the ESG umbrella was so different in the US. Because there’s so much discussion about it, it’s getting so much headline, so it’s kind of sound and fury, but it’s not signifying quite as much as it is in Europe. Maybe it’s not typically American, but I found that to be kind of a sobering reminder that while we have had good discussion about it, there is a long way to go here.
Annalisa: Right. But one thing is signing up to these things and another thing is then implementing it. So, the next part of that analysis showed that within these private equity firms, actually their investments in [00:04:00] businesses that do something in ESG, in particular, is getting there, that part of it. So, on average, they were in the fifty to sixty percent in European companies and around the forty mark in the US companies.
Joe: Yeah, that’s still great. I mean, it still shows significant progress. Do you think that combining all this, as you said, under the ESG umbrella has helped push this forward?
Annalisa: For sure. It gives us a hook, and actually it helps that we’re now all talking under the same umbrella. We might mean different things. So I think there’s still a level of development there, but it’s important, for example, I know that EU is working on a taxonomy that they want to get in place by January next year, so that the definitions are the same as people try and work on porting standards. So, there’s still a lot of variety in there, but the fact that it’s all under one roof helps us talk about it [00:05:00] and then explain what kind of things companies are doing.
Joe: I think one of the things we had discussed earlier was the fact that the US is talking so much about it and trying to catch up has really kind of accelerated this whole momentum throughout the world actually. Is that fair?
Annalisa: Yes, but also 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 being exchanged over time and 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.
Joe: I hope you’re right. I hope it’s not just that we’re better at marketing what we say and publicizing our good intentions, but hopefully, you’re right, it will actually lead to real change.
Annalisa: Opportunity is there. It’s up to us to take it.
Joe: The opportunity is there. But as you have said, it’s not what you say, it’s what you do, and that’s a standard that really has changed. [00:06:00] Good intentions is no longer sufficient at the top of a company. It really is. “Show me the money,” so to speak, “Put your money where your intentions are.”
Annalisa: Well, and isn’t that wonderful? Because it is about outputs.
Joe: Exactly. So, it feels like a lot of the momentum that’s being created is on the investor side. Serious investors, BlackRock, state Street have said to companies, “If you’re not taking ESG seriously, we consider that to be a potential risk, and it’s a risk that in many instances, we’re not willing to subject our investors to.” And that has had, in my view, a tremendous impact on how companies are viewing their role and how boards are viewing what they need to do to make their companies continue to be attractive.
Annalisa: Well, it’s the definition of risk that is so important, kind of trying to understand it’s both in a positive and [00:07:00] 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.
So, environmental areas take a lot of space right now, and I’m so happy that there’s momentum building around carbon zero technologies. I’m really deeply into that. But it’s also interesting to see on the “S” side, so the Social side. In the UK recently, there have been some huge debates around the Deliveroo IPO or around Uber, what happens if most of the people that work in your sector are independent contractors? Should they still be independent contractors or should they be regarded as employees? It has huge impact on the “S” side of ESG, and it was so interesting to see how much engagement there was around those kinds of issues.
Joe: Well, I think the fact that that issue is now under ESG also gives it a lot more [00:08:00] credibility. You sent me a great PowerPoint that you did showing how it started, how it’s going on each of the ESG components, and under Social, it says, “Don’t break the rules. That’s how it started in public. Don’t break the rules in public.” Now, it’s something like surpassing regulatory minimum as a competitive advantage. What a different mindset that is.
Annalisa: And to me that is so important. 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.
Joe: I totally agree. I think the fact that it is viewed as a competitive advantage is the [00:09:00] driver because boards and management can not ignore it. If it’s a competitive advantage, you’ve got to think about it. I agree with you, looking at it as another risk that companies are trying to manage changes the whole conversation. It really does.
Annalisa: So, I’ll just take one example in health and safety. So, I come from chemical industries, large manufacturing sites. It’s a huge area of discussion of 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, if you think about it in these terms,
Joe: Absolutely, one of the things you brought up in this context was that multinationals [00:10:00] and the EU might think about this term that, I can’t tell you how foreign this term is, tax morality, I think was the term. Maybe shame on me that I wasn’t familiar with it, but the notion is that it’s not what you can get away with, it’s what you should be doing to be a good corporate citizen and a good part of society.
I have to say. I think, that is not an American notion. I think here, if you want to be generous and want to have an impact on society, for most people, the last thing you want to do is give it to the federal government. People rather have control over where that money is going and how it’s being used. But in Europe it is really a different perspective, it seems.
Annalisa: So, we meet among our team with Women Corporate Directors. We discuss things that are kind of posing these existential questions for board members. And for me, it was so interesting to find out from the [00:11:00] guys working in accounting and audit committees so that they were starting to get pressure around reporting where corporations were paying what kind of tax rate.
It came under this umbrella of tax morality, and I was fascinated by the subject. It’s not something that you would immediately think this is so interesting, but actually it has huge implications. It is again, for me, part of ESG today, because it is a way that you look at your company’s purpose of how you interact with your stakeholders and how you see your role in helping local communities.
Now, having said that, 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 kind of being in direct control of what it is that you choose to [00:12:00] do as opposed to going through the tax system in order to help society. I think that’s kind of a fundamentally different history that we have.
Joe: I think that’s right. I think the one place that what we’re calling tax morality might actually have an impact here is actually getting some of the largest corporations in the United States to pay tax. Right now, as you know, many US corporations do not pay any tax, and there is, I would say, larger conversation going on now that there should be some tax paid no matter how much good they’re doing and no matter what the tax code said, and that we should make changes in the tax code to reflect that, that multi-billion profits should not be generated without some kind of tax liability.
Annalisa: I mean, it is a burden for the regulators to get through, but on the whole, I think it’s quite good to have a level of competition among countries. I [00:13:00] live in Switzerland, which each canton has competition around tax. So, it’s not about fixing a level, it’s about deciding what your positioning is in that system on how you want to regulate it.
Joe: Wow, interesting.
Raza: Annalisa, you are on the board of Cambridge Enterprise. Can you talk about how Cambridge Enterprise helps focus the acceleration and impact of the University’s research in real life?
Annalisa: Well, so Cambridge Enterprise was created to help researchers impact the real world as much as possible, to try to kind of bring up the volume and translate fundamental research into products, services, normally, technically-based things that can have an impact in real life. So, that’s what Cambridge Enterprise does, it looks after patents and then tries to get royalties from them and then helps seed companies based on that.
Raza: Well, innovation drives all the [00:14:00] improvements in the economy. How does the board work in that respect for that translation of innovation getting into real life?
Annalisa: Well, so this is a very particular focus of the board of having impact rather than just monetary impact. So, having royalties or seed funding that goes well 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.
For that reason, the board composition is also different from usual. So, you have some non-executive board members that you have everywhere. You also have representation from the university, many academics, and then people from other technology transfer organizations. So, it’s a very, very rich set of discussion.
Raza: How large is the board and how does it function?
Annalisa: It’s fifteen to sixteen members. We meet four or five times a year. There’s the usual statutory things that you [00:15:00] have to do; approving sales of companies that have done well and certain things like that, but more and more kind of an interesting discussion about which areas do we want to see succeed.
It’s been fascinating that there’s been some analysis done in the UK over the last seven years, so pre-pandemic, but the VC funding that has gone into the UK system is quite interesting the way it goes. So, about nine billion over this time has gone into IT, and those are the areas where you get a very quick return, very high returns.
Then about four and a half to five billion has gone into life sciences, so medical diagnostics technology, and only about 1.5 billion on everything else, and those are the things that I want to see more of, anything to do with energy, carbon zero materials, chemistry and then also anything to do with history, social [00:16:00] systems. It’s so interesting, all these parts of research that happened in the university and that don’t necessarily get the outlet yet..
Raza: I think you’re right though. Even here in the US, a lot of funding goes to, what I would call, not deep tech or not hard tech. The joke would be that we wanted flying cars, but we got a hundred forty characters on Twitter. If revenue generation is not the goal for the early stage of innovation that’s being rolled out of the universities, is there then a little bit of lack of seed funding in areas, or is there a lack of funding for areas that need it?
Annalisa: Well, so in Europe, in general, we have a very different environment around VCs. So, when I look at equivalent research universities in the US, they mostly just look after patents and royalties because the ecosystem is there to jump in to give seed funding, [00:17:00] a funding to a lot of different things.
This doesn’t happen so much. So that’s why it’s part of what Cambridge Enterprise does, and I see that needle all over Europe along the work that we do with the research universities. But the other part of the role that I wanted to really highlight is that whereas VCs would 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
Raza: Because at the early stage of research and development, you have to fund things. The only people who are going to fund those things are the ones that are not necessarily looking for a short-term ROI on their investment. It is for the long term.
Annalisa, bringing this whole innovation thinking to a more general level, you have led innovation and R&D for large global companies, but these companies do struggle in innovating, if you will, [00:18:00] and then talk about the board’s role in fostering innovation in larger companies and what have you seen on what works and how can boards really effectuate that innovation?
Annalisa: So, I think every company he has this headache, how much of your time and resources do you put on making sure that what is successful today works, as well as it possibly can; more efficiency, more investment in that, and then how much energy do you put in what is needed in the future and pulling that trigger?
So, all the kind of discussions about what do you do with your excess cash, do you invest it in innovation programs, in R&D, or do you do share buybacks. It is so interesting. You can tell a lot about how a company is thinking by looking at where those investments go.
Joe: You used the term called “avoiding a Kodak moment” for your company, and I thought that was so well put, and I think Americans would understand what [00:19:00] that means. Could you talk about that, and specifically, how does a board avoid that?
Annalisa: Right. So, it’s stolen from what it used to mean. Kodak had it as one of their ads. For me, I work in innovation, Kodak is kind of the poster child of not pulling that trigger. So, historically, they had all the patents for digital photography, and the company just chose not to make that transition from film to photography, and this has been pored over by, I think, everybody who is an innovation nerd, like any professor in this area.
I think, fundamentally, it’s because the companies saw themselves more as a chemical company, and in fact, Eastman still exists, than a photography company, because then they would have transitioned, and it really does hurt, especially if you wait until it’s too late because transitioning from Business A to Business B, because these are people who have worked with you forever who have built great things, and when is it that [00:20:00] you decide to divest from there and then invest in the next new thing?
Joe: So, I know that hindsight is always 20/20, but what might have made a difference, and the thing that comes to mind is maybe a more diverse board, or I would put it differently, maybe a board with more diverse perspectives might have understood that thinking of themselves as only a chemical company was limiting what they can do.
Annalisa: So, diverse thinking, absolutely, we need to kind of up it in I think almost everything that we do, including the team on supervisory boards, and it is that level of discussion but also that ability on the board to have these important strategic discussions; what happens if we don’t invest in the new technology:? What happens if we don’t have anybody in our team who knows about AI and how an AI application can have an impact on [00:21:00] what we do every day? These are critical discussions and risk-based discussions, as we discussed earlier.
Raza: On the other hand, Annalisa, you also talk about this term called “innovation theater” where companies are pretending to innovate or posing a lot of lip service to that. How can boards not make it so that you end up in innovation theater in a company?
Annalisa: Right. So, innovation theater is our version of greenwashing, and I think it comes from all these wonderful startups that go up on stage and tell a story to an audience of people who they think they might be investors, but actually, maybe they’re just there for the theater. So, that’s how we picked that word.
It’s so easy when you’re on a board to take activity for output. You see the executive team coming up and saying, “These are the kinds of things we do. We invest in corporate venture team or in an incubator,” all these [00:22:00] activities, but actually innovation is all about outputs, and for me, this is something so important to share because I think sometimes we don’t make the distinction quite correctly between what is research and what is innovation.
Research is understanding what something is and it’s often measured in things like how many papers have you written, and then you apply it and that is called development, and then that is all about how many patents you have. Innovation is about either sales or the valuation of your company, if you’re a startup, so it is very output focused and it’s important for boards to be aware of that.
Joe: So, I would say that both for the type of strategic conversation we’re talking about when we’re talking about the Kodak moment and for this innovation theater issue, where is the reality of it? Is this just theater or is this something we’re really doing?
The issue in part is making time during the board [00:23:00] meeting for real conversation that is not having so much time taken about presentation and discussion about the presentation, but actually setting a time for real deep conversation, because, ultimately, I feel that is maybe the single most important thing a board does. If the board is properly composed and if it has the opportunity to really have these conversations, this kind of thing will actually be less of a concern. I think risk identification would be a lot more likely because there’s time to do it rather than, “Hey, let’s get through the report and talk about the next big thing.”
Annalisa: It’s so important. So, spacing the agenda is so important and how the chair operates on a board just gives you that ability to have that open discussion as opposed to being forced to going through all the statutory elements of your job; you have to approve accounts, you have to look at various things, but it’s also that ability to [00:24:00] say, “Well, now we’re going to have this amount of time for an open conversation.” The chair will not give their opinion until after everybody else had. It’s those kinds of small things that make a huge difference in the quality of the conversation and the decisions that come after.
Raza: And Annalisa, you alluded earlier a little bit, when the pandemic would hit, there is cash in the bank and you can do share buybacks, or you can spend it on R&D or innovation, or you can spend it in other ways when times are tight. What do you say to boards in terms of thinking about that allocation of innovation and R&D versus share buybacks?
Annalisa: Well, so I’m biased. So, I think that if a company doesn’t have the right choices to invest in innovation, R&D or M&A, they should go back and think, ” What more can we do? What kind of problems do we want to solve?” Because that is so much more interesting than, “Oh, let’s do a share [00:25:00] buyback and this is how we kind of improve our financials.”
I think it’s a question of having those options that are more interesting and give you a higher return than something safe that you can get.
Joe: But it’s more complicated.
Raza: Yeah, I think data would show that companies in tougher times when they had made the right choices that still continue fund innovation and research development have fared out much better at the other end of those tighter times.
Annalisa: Right. And for me, it’s so interesting. There was some interesting research done by McKinsey at this time on the last recession, so what happened between ’07-’08 and now? And it’s very clear that the companies that only worked on cutting costs came out of it in a really tough way, whereas the companies who are able to, yes, cut costs because sometimes you have to do that and adapt, but also [00:26:00] still invest, also have a view of what is going to be needed now and in the future and invest in that fared so much better both during the crisis and then especially when the economy accelerated out of the crisis, and I think the delta there is something like thirty percent or something like that.
Joe: So, let me ask you about gender diversity on European boards. Again, not surprisingly, Europe is I’m sure ahead of the US on this. What I understand from our conversation is that in large part, that is due to legislation. And I’d like to just hear a little bit about that because I think folks would like to know why that is.
Annalisa: Right. So, Norway was the first country in Europe to legislate on a quota for different genders on boards, and what was so interesting about that legislation is that it was quite hard. So, the country had tried for the previous twenty to thirty years to go through soft measures or training or this or that, and then [00:27:00] saw nothing happening, and then one minister for the economy decided to make a change and say, “Here’s the output, so you need to have at least thirty or forty percent of women on supervisory boards. Otherwise, we will kick the companies out of the stock exchange.”
Then things started to happen. So, some companies decided that they didn’t agree and they came out of the stock exchange, but many companies went with it, and then since then every European country has tried, whether it’s with targets or one way or another, but actually the only significant changes happened when countries decided to then go for the legislative approach.
Joe: Not exactly surprising though, because when there are consequences to acting and not acting, people are far more likely to pay attention.
Annalisa: Right. So, it’s mandated, and then you kind of try and hit your targets, [00:28:00] but in a way it’s sad that that had to happen, but that’s reality. We now know that quotas move the needle faster than the otherwise glacial half of the percentage rise a year that happens.
Joe: So, maybe you’re right. It is sad in a way, but I think the good news is that now that we know, we know there are ways that we can kind of jumpstart this up or accelerate the effort and not just relying on effective advocacy, which is obviously important, but not enough.
Annalisa: But also what moved the needle in Norway was the fact that companies would be kicked out of the stock exchange. And we’ve seen in other countries like the Netherlands, they’ve had soft quota system for awhile with a comply or explain clause. So, if you didn’t manage to get to the system, then in the annual report, a company would have to write the standard paragraph saying, “Oh, we tried really hard. We really couldn’t find anybody. That’s just too bad.”
Now, they’ve gone to a much tougher approach [00:29:00] because that really didn’t change, and it’s interesting to see Germany being the first country to look at quotas for executive boards, so not just non-executive boards. They’re the first country to say, “There should be women on executive committees and we’re going to start measuring that.”
Joe: Wow. How revolutionary. I mean, I think the fact that it’s wonderful that it’s happening, it’s unbelievable that we’re in the twenty first century and this is considered a breakthrough.
Annalisa: Well, I’m sad that we still have to explain why, because we’ve been discussing all along how important it is to have different points of view, different skills. I think the whole point of a board is to bring people together who have different skills and who care for the company and want to see it advance.
So, the fact that for gender specifically, we had to go through all these analyses, these correlations and these discussions of why it’s important to have our [00:30:00] view when eighty percent of purchasing decisions are made by women. I think that’s kind of sad that we had to go through that and that somehow that’s still not landed.
Joe: Well, and it is the reason that I think that suggestions or proposals like NASDAQ floated last year that there would be some standard for gender diversity on boards or else they would be delisted. That is what we need to head towards, because….
Annalisa: With a female CEO.
Joe: Well, yeah, exactly. And I just think that if you don’t do that, the pace of change is going to continue to be glacial. It has picked up. There’s a lot more talk about it. I agree with you, the fact that we’ve had data, just reams of data about this, and yet we’re still talking about it and it’s not really happened. It’s happening, but not happened. I think the lesson is you’ve got to make it happen. You can’t just keep talking about it.
Annalisa: And that’s the red thread in everything we discussed today, whether it’s [00:31:00] ESG or innovation or diversity, it’s about output.
Joe: Yeah,
Annalisa: And you have to show the results, and once you have the results, then you see the benefits that all of these things bring.
Joe: Yeah, exactly. Annalisa, what a great conversation. Thanks for joining us today.
Annalisa: It’s been such a pleasure. I really enjoyed it. And thank you for the wonderful questions.
Joe: And thank you all for listening to On Boards with our special guest, Annalisa Gigante. To our listeners, we have a request. If you enjoy our podcast, please take a moment to review it and rate it on the Apple Podcast app. It really helps others find and discover our podcast.
Raza: You can go to the Apple Podcast app, but all of our podcast episodes are also available on our website, www.onboardspodcast.com. That’s onboardspodcast.com. All of our episodes are available there, and you can even contact us with [00:32:00] your questions, comments, and suggestions on the website as well. We’d love to hear from you.
Joe: Please stay safe and take care of yourselves, your families and your communities as best you can. Raza, you take care, too.
Raza: You too, Joe.
Joe: Thanks.

25. Guy Primus: Accelerate Board Diversification Now!

Guy Primus is a technology executive with over 20 years of experience operating at the intersection of media and innovation,.  He is currently the CEO of Valence Enterprises, which creates new paths to success for Black professions, and is launching the BONDS executive development community this summer.  Guy is also Co-Founder of The Board Challenge, whose mission is to improve the representation of Black directors in the boardrooms of U.S. companies.  In this episode he talks about ongoing efforts to accelerate the diversification of boards of directors in U.S. companies. 

Thanks for listening!

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

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.

Transcript

Joe:  [00:00:00]Hello and welcome to On Boards, a deep dive at what drives business success. I’m Joe Ayoub and I’m here with my co-host, Raza Shaikh. On Boards is about boards of directors and advisors, and all aspects of governance. Twice a month, this is the place to learn about one of the most critically important aspects of any company or organization, its board of directors or advisors, as well as the important issues that are facing boards, company leadership and stakeholders.

Raza: Joe and I speak with a wide range of guests and talk about what makes a board successful or unsuccessful, what it takes to be an effective board member, what challenges boards are facing and how are they assessing those challenges and how to make your board one of the most valuable assets of your organization.

Joe: Our guest today is Guy Primus. [00:01:00] Guy is a technology executive with over 20 years of experience operating at the intersection of media and innovation. He is currently the CEO of Valence, whose mission is to create new paths of success for black professionals.

Raza: Guy is also the co-founder of The Board Challenge, whose mission is to improve the representation of Black directors in the boardroom of US companies. He is an experienced board member currently serving on boards of several companies, including The Virtual Reality Company and the Southern California Public Radio.

Joe: Welcome, Guy. It’s great to have you today with us on On Boards.

Guy: It’s great to be here. Thank you for the invitation.

Raza: The description of Valence is a company whose mission is to “create new paths to success for Black professionals.” What does that mean?

Guy: Well, I’m going to make a slight correction there because I think it’s important. It’s a two-letter word, but the kind [00:02:00] of “to success,” I would say “of success,” because we really want to consider success as a journey, not just a destination, right? So, we want people to celebrate every moment along their career journey, but I think really the important part of that mission is that for too long black professionals have been kind of marching to the beat of someone else’s drummer. So, what we want to do is create those 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.

So, we look at that as a kind of a two-sided equation. One is that we want the black professionals themselves to be excellent in every way. We want them to be supported. We want them to have an incredible community. We want them to kind of not suffer from low aim. We want them to aim high.

Then from the corporate side, really understand that there is an artistic element of your black culture that can be brought to bear. There is a lived experience that is atypical of many organizations, [00:03:00] and all of that benefits the organization if it’s managed properly. So, when we talk about the new paths of success, it is about, yes, the individual and kind of finding where he, she, or they are in their career and where they aspire to be, but it’s also a recognition by the organization that the path less traveled might be the right one for the company and for the individual.

Raza: Great. Great mission, Guy. In essence, would you say that the Valence is a community or database of black professionals?

Guy: Yeah, I would definitely not say database. We want to maintain the humanity, honestly, right? And that’s coming from an engineer, but yeah, we want to make sure that, yes, it is, we do use a database, and it is 15,000 professionals brought together by technology, but we want to make sure that we maintain, again, the humanity, the connective tissue, the mutual respect for each other, the shared progress, right? So, all that happens. Yes, it can happen algorithmically, but it’s better when it happens in person and with heart. And so, yeah, we definitely use the word “community.”

[00:04:00] Raza: And when you bring this community together, do you have a process of vetting before you add them to the community?

Guy: Yeah. I mean, honestly, we want people to be who they say they are. That’s the most important thing, just stand up and be who you say you are. And really beyond that, we want people to share in this belief that success for black professionals is long overdue, right? We could go into the details, but a lot of success has been had by select individuals. The problem is that you can enumerate and you can name those individuals. So, all we ask is that people want the best for kind of some of the members of the community that have been under appreciated for kind of 401 years.

Raza: What type of career opportunities are available through Valence?

Guy: Honestly, everything from entry-level engineering, kind of imagined, kind of front end, kind of dev work products. We’re actually kind of searching for a head of community personally at Valence and a head of product, and so it’s everything from that. We have private equity firms looking for associates and partners, [00:05:00] and we have people looking for board members and C-suite executives, so it really runs the gamut.

We just really focus on mostly, and again, I would use this analogy, national, right? And again, assuming that engineers are in that category, but even though the community is open, what our sweet spot is, it’s kind of that where there’s career progression, even if it’s an innovation economy company or a Fortune 100 behemoth that’s been around for time eternal, we just focus on that where there’s a career progression that is well understood and well-defined.

Raza: That is tremendous. On the company and organization side, how do you enlist them to provide opportunities? And what are you looking for in those organizations that are able to absorb members of the Valence community?

Guy: Yeah, I think really, for the most part, people are aware that diversity breeds excellence, right? It breeds a different way of thinking, different approaches, different solutions, different considerations and framing of problems, and so the companies that come to us [00:06:00] generally have an awareness that, “Hey, we’re not doing a good enough job.”

We have 12 to 14% of the population that’s African-American or black depending on how you kind of categorize it. And especially in Silicon Valley, some of the biggest companies have a workforce that’s just 3% or less, right? When you look at Fortune 500 CEOs, again, those numbers start to get lower and lower, and the average starts to get thinner and thinner, and so generally, the companies that are coming to us are saying, “Hey, we know that this is an opportunity, right? Not necessarily a problem, but we realize this is an opportunity. And we’d like to avail ourselves of the opportunity of the excellence that we have not tapped into. We don’t like groupthink. We would love the diversity of opinion. We would love to kind of make sure that the people who are our customers, that are our partners are represented in our employee base. So, they’re coming to us with opportunities and they’re just saying, “Hey, we want to consider the members of your community that we may not have considered before, and that we don’t know.”

The reason why Valence was started was because people would come to Kobie [00:07:00] Fuller who’s kind of my board member and kind of founder of Valence and just saying, “Hey, I don’t know where to find black talent. Can you help me?  I would love to have a black product manager because we’re dealing in a realm that kind of where black consumers are predominant. Can you help me find a black product manager? Can you help me find someone, who as I’m developing algorithms and artificial intelligence, that will help us eliminate some of the bias that is implicit kind of in our coding?”

So, that’s where it started. That goes back to your question about the database. There is absolutely a database and we avail ourselves of data to make those connections, but the companies really just want to connect with and consider excellence, and they just want to come to us because they’re not sure where to find it as relates to black talent.

Raza: And Guy, we’ve spoken about this many times on this podcast that the excuse of the pipeline or people not being available or not being able to find them is long gone, and I think Valence itself is a testament of that, that if you are looking, you should be able to find good folks to [00:08:00] bring for your company.

Joe: If you’re really looking, you can find.  

Guy: And again, I would like to lower that bar because you really shouldn’t have to look that hard. I’m saying, if you come to Valence, you don’t have to look hard at all. We can help you kind of find those individuals, but also I want to kind of talk about one of the things that you brought up, which is the word “pipeline.”

As an engineer, it bugs me. It really bothers me, because to me, a pipeline has a point A and a point Z and has a homogeneous product flowing through it, and that’s not what we’re talking about here. We’re talking about people. We’re talking about people with different backgrounds. We’re talking about people with different strengths and weaknesses. We’re talking about different approaches to solving a similar problem. So, I try to think of this, again, wearing my industrial engineering hat, as a system.

There is a challenge with the system. Some people don’t know where to look.  There definitely is a problem with the system of people kind of making their way through the system. You have a really incredible raw material that doesn’t come out on the CEO kind of in the C-suite at the end, right. That not necessarily a problem with the [00:09:00] individual. That’s a problem with the system.

So, that’s what we look to kind of solve with Valence, too. It’s not just about finding the black talent, but ensuring, but again, this goes to this paths to success or paths of success that we want to be with them every step along the way to help facilitate the journey to excellence.

Raza: And to improve that system, Guy, does valence also offer programs to help develop further members of the community?

Guy: It’s funny that you should ask. We didn’t send that question to you ahead of time, did we?

Raza: No.

Guy: The reason why I say that is actually we’re launching an executive development program in May. So, in just a few weeks, we are launching an executive development program that really speaks to your question, that it’s not just about kind of getting people into this system. It’s about shepherding them through, just like you would, I use the analogy of a carbon, right?

Carbon has two naturally occurring forms. There’s graphite and, and there’s diamonds, and when you find a diamond, a lot of time it’s a diamond in the rough, and you don’t just kind of send that through the pipeline and hope it turns out on the other end. You hire a [00:10:00] master diamond cutter to make sure that it has the brilliance and resiliency and polish that you want it to have.

So, we think of this the same way, and that’s what our kind of forthcoming Valence Bonds program does. It’s to take those individuals who have been brought into our system and who ordinarily or otherwise might be left to wander in the wilderness, and we’re giving them kind of an incredible path of success and connecting them with like-minded individuals.

 We have a lot of other programs, too. We have something called the Valence funding network where we have 256 entrepreneurs in our program that we connect with investors and we connect with each other, and we connect with opportunities. We have another program that we call Boosts that really are one-on-one micro mentorships. So, if you put up your hand and say, “Hey, I need help with blank,” and we let you fill in that blank, and then we kind of connect with people who have volunteered and consider themselves experts in that area.

Again, we’re not just focused on the recruiting piece, it’s the retention, the promotion and the engagement piece that really is going to [00:11:00] make the difference in this system that we talk about.

Raza: I love the name Valence Bonds.

 Guy: So, you get the reference, right?

Joe: It’s a great add to what you already have. I think it’s terrific that you’re adding that on and it’s next month you said that you hope to do this.

Guy: Yeah. We’re announcing it and launching it in May, and the program will start this summer.

Joe: Fantastic.

So, I want to ask you about The Board Challenge, which I think is a phenomenal mission-driven organization. You co-founded The Board Challenge in September of 2020 to help accelerate the diversification of corporate boards in the United States. How did you become involved and what was your motivation to do it?

Guy: How did I become involved? Because people assume that because I was a co-founder, it was my idea, and it wasn’t. I’m the one black co-founder of The Board Challenge, but the idea actually came from my friend, Brad Gerstner, and Brad is an incredible individual. He’s enjoyed incredible success, but last summer Brad attended an event with his son who said, “Hey Dad, this is incredible. I understand [00:12:00] the challenges that black people face in America,” and Brad obviously being a really successful professional, he heard that and then his son asked him a really profound question, “This is great, but what are you going to do about it?”

So, Brad took that to heart. When your son, when your kids ask you something that profound, you can’t just ignore it, right? There’s no way to ignore it, and so Brad thought about it, and Brad was on the board of a number of companies and he considered doing what Alexis Ohanian did and stepping down from one of those positions.

We, actually, in the course of The Board Challenge, talked to him last week, and he was affected profoundly by the fact that his action really spurred The Board Challenge, but that’s what Brad was looking to do, was step down. He really had to ask himself, “Well, what is it that I can do?” And he considered stepping down from one of the board positions that he was on, but he realized that because he had so much influence as he talked to people, they gave them the idea of, “Well, why don’t you start a movement. Not just kind of open up one board seat, but start a movement that can shine a spotlight on where there’s opportunity for others to [00:13:00] add members of the board. There are a lot of companies that still today don’t have a single black board member.”

 So, that’s what Brad did, it’s to kind of step back and say, “Hey, how do I affect change on a macro level so that there are more black representatives on boards, and we’re starting with black board members, but the ultimate goal is to have more diverse boards in general.”

So, I was one of the early calls that Brad made, because we were a business school classmates and because of my work at Valence, we connected, and it was really kind of just us working through some of the opportunities and really defining how we want it to go to market. So, it was almost a typical business school case of like, “Hey, if you want to really affect change, how do you do it and not looking at it as let’s write a check thing or kind of let’s act as an individual, but kind of let’s really catalyze a movement to really increase representation on boards.

Joe: I want to go back to how it happened. I love the fact that our kids sometimes are the ones that hold us accountable for what we say. Who else is going to do that? If you think [00:14:00] about it, I think it’s great.

Guy: That’s a really good point. They’re not afraid of not getting in the next deal or not being promoted or any of that stuff. They have no fear. So, I believe the children are the future, so we have to listen to them.

Joe: I’m with you on that for sure. Did you talk to other organizations that are involved in trying to work on board diversification before you launched The Board Challenge?

Guy: Yeah, I think it was necessary, and one of the things I told Brad is that, “Hey, we’re treading on grounds where other people have walked. So, this is not a new problem. It’s not a new  kind of opportunity. This is something that people have been talking about for many, many years, and so we have to educate ourselves, but more importantly, we want to be part of the solution and not just kind of a distraction and really looking at this as, again, an ecosystem.”

So, understanding what others are doing and really doing our due diligence to find how we. And to the greater benefit of society, and that’s the way that we approached it. It wasn’t  kind of, “Hey, let’s just go off [00:15:00] and do this.” We called, I would say, 20 or 30 kind of black board members, those who are on boards, and kind of told them what we’re doing, and some of them came on board and kind of gave us their immediate stamp of approval. Some said, “Hey, well, I’m doing this over here, but I’m fully supportive, so you can count on me.”

Everyone is approaching this with the same mentality, which is a collaborative spirit, and there was no other way, honestly. We weren’t just going to set up another tent in the wilderness and hope that people will kind of follow our lead.

Joe: Yeah. Good. So, how have you developed a network of the companies to ask them to take the pledge?

Guy: Yeah, that’s actually the key to success here because, again, each of us comes to the table, so myself and Brad Gerstner and Sukhinder Singh Cassidy, who brought her CEO, Shannon Gordon, from the board list. Each of us came with a network. A lot of times those networks overlapped. It was great when it did, because kind of hearing three voices or four voices was much more impactful than hearing one. Each of us came with the network and we all picked up the phone and just dialed. We dialed for support [00:16:00] from the individuals that we knew that were serving on boards and that were head of nom and gov committees and that were CEOs.

Then a miraculous thing happened, which was people started saying, “Hey, let me call for you.” So, one of the recent successes that we had is Michael Milken, who met Brad and was really impressed with the mission, and Michael and his team, Ronnie Wiessbrod, over there have been making calls for us and, and kind of setting up meetings, and so those go fantastically well, because, again, Michael has an incredible track record of decades of success and he brought that to the table. 

Again, we’re talking about this ecosystem, Ken Frazier at Merck and Les Brun, it really is those companies. Shellye Archambault, Rodney Adkins, all of those guys are picking up the phone and calling for us and making introductions and lending their support, and that’s really when this movement starts to catalyze and it starts to become more than just the collection of individual forces, but an irresistible force.

 Joe: Now, what does it mean when you ask them to take the pledge? What are they pledging to do and how [00:17:00] do you follow up on the commitment they’re making to you?

Guy: Yeah, so that’s actually a really great question and we get asked that all the time, so thanks for that. There are two ways to take the pledge. One is that you don’t have a black board member and you are pledging to add a black board member within 12 months of taking the pledge. So, that is how we are actually going to get more black board members on companies. Again, 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.” So, we follow up.

We actually have an executive director that we hired recently, Sheryl Hilliard Tucker, who had come in, and she has an incredible kind of background in this area, black enterprise and others. So, she is kind of running the organization now that’s holding those in individuals accountable, but again, it’s made with good faith, and so we’re helping wherever we can to make sure that those companies find the right board members. So, that’s the first flavor.

The second flavor is, [00:18:00] “Hey, I already have a black board member, but I am pledging my support to your movement because I know it’s important. I know it’s important for society, and I know it’s important for the boards that we, kind of as a board members and CEOs, sit on to actually make sure that our boards are representative, and so we think that’s good for the country. We think it’s good for the economy. We think it’s good for corporate America in general.” So, that flavor is, “Hey, I just support you and I lend my name and my voice to this movement.”

So, that those individuals that are looking for board members, if there’s an open seat, they consider a black board member, if those organizations that don’t yet have a black board member, they see me, they hear me, they know me, that my voice resonates, and they’re going to now consider adding a black board member, because again, this movement that has been catalyzed is it’s not a one size fits all. It’s not a  prescriptive kind of pronouncement. It is kind of, “Here’s the challenge. Here’s an opportunity. Let’s work together to solve.”

Joe: How did you develop the list of eligible board members to [00:19:00] place on these boards?

Guy: Yeah. So, I’ll say we don’t have a list. There are dozens of lists that exist. There are dozens of companies who are not-for-profit and for-profit organizations, that are kind of dedicated to helping companies find board members, and so all we’re doing is saying, “Hey, take the pledge. We will make your pronouncement public. We’ll hold you accountable, and then we’ll introduce you to a litany  of organizations that can help you find the right board member for you. Everything from warm introductions, and you kind of saying, “Hey, I’m targeting this individual. You know him or her.  I’ve already identified someone and I’d love to kind of get to meet them” to “I have no clue, but here’s what we generally look for.”

We started off with the Boardlist, obviously, because of Sukhinder and Shannon being on board early, but we have major search firms and we have companies that do a fractional CEO placement and every flavor that you can imagine, we’re in the business of helping solve this problem, so it’s not our list because our list is, by definition, the moment you [00:20:00] release it, even if it were comprehensive, it would be incomplete, because there’s always a new qualified person. So, we leave that to the ecosystem and we just make the connections.

Joe: So, a question that I know you’ve been asked is, have you got pushback because The Board Challenge is focused exclusively on black board members? As important as that is, there are some that might say, “Well, why not diversification in general?”

Guy: Yeah, I would say, yes, we absolutely have, and I think that’s not uncommon and not unexpected.  So, the answer that we have is this, there was a moment in time that this makes sense and that this is right now where companies are waking up and understanding what their history has meant, and their lack of kind of representation has kind of birth in a variety of fashion.

I think people want to do something, and the challenge is if you make it so broad and so general, nothing happens, and so  the commitment that we have at The Board Challenge is this, [00:21:00] we’re spending our first year dedicated to adding black board members, because, again, it’s very tangible. It’s something, again, if you can go back to 1619 and think about kind of how we arrived on the shores of America and the challenges that we’ve gone through. Again, you can look at the numbers. I’m an engineer. Gap analysis is my friend. You look at the numbers about  how were disproportionately underrepresented in all shapes, forms and fashions of America, but especially in the board ranks, so you go there.

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 representative boards. That’s really where we want to get to. But, again, if you just kind of tell people that,” Hey, we want a representative board.” The inaction probably will dwarf the level of action.

So, again, the other thing is that you can go through every company’s website or their annual report, their 10-K, and you can look up the names. In some, again, it might be a lot of work, but you can look up the names [00:22:00] in those reports that are of the board members, and you can, for the most part, identify who the black candidates are.

We would love to have more Latinx candidates on boards as well. That’s something that’s really, really important. It’s a little harder to do, just to be frank. Women, it’s a little easier. LGBTQ, it’s almost impossible from the picture or a name, you can’t do it.

So, again, this being a public pronouncement of the desire to have a diverse board, and we know that once you have a much more diverse board, those board members feel free to speak up and they can affect change from the inside. So, that’s what this is about.  This is a stepwise process to get more representative boards, and we’re just starting with the zeitgeist and with the ability to kind of have a public pronouncement of this state.

Joe: What has been the biggest challenge or challenges that you’ve encountered so far?

Guy: Well, I think that one of the big challenges is that most boards are somewhat, especially at the very beginning, it started off very homogeneous. So, [00:23:00] you know that you can add someone who you trust and you look to your inner circle, and that inner circle is generally homogeneous. So, the network effect of adding to a board is challenging because a lot of people don’t have a deep bench of black candidates or women candidates that they kind of were in fraternity with or members of their country club or what have you. Or even the private schools, so that’s where a lot of people meet their board members at those places that they frequent, the houses of worship, and if we’re not there, we don’t show up on their short shortlist. So, that’s been the biggest challenge, it’s just kind of making people aware that, “Hey, even if you recognize this as a challenge and an opportunity, you don’t necessarily know how to solve the problem.” So, that’s been one of the challenges.

The other challenge has been that a lot of companies want public board service already. So, they’re shooting really, really high, and they’re saying, “Hey, I want someone who served on a Fortune 500 board.” And again, when you start doing that list, you can enumerate [00:24:00] and that the same kind of 20 or 30 board candidates serve on multiple boards, and so there’s there’s been not an expansion of the circle.

Now, very recently that’s changed. So, I can tell you that my friends, people that I’ve talked to, people that I kind of go to the playground with, they’re starting to serve on many more boards and they’re getting many more opportunities, and now the same thing is happening to them. So, the circle is slowly expanding.

So, I look at someone like Salaam Coleman Smith, who’s a friend, who last year joined Pinterest board and this year joined the board of the Gap. I can tell you that three people have reached out to me and said, “Do you know Salaam? Would you mind introducingher to me?” She didn’t have any boards last year. Now, she has board opportunities being thrown at her feet. So, we need to expand the kind of the circle from which people or the kind of pond from which people fish.

Raza: This is along the lines where our friend, Matt Blumberg of Bolster.com, mentions this as board experience problem [00:25:00] versus board readiness. Any thoughts on how basically, just like in the Valence community, part of it is polishing the diamond in the rough, that aspiring board members can do to become board ready?

Guy: Yeah, absolutely. I talk about this a lot. So, Matt is also a friend of mine. I’m a big fan of Matt. He’s helping me kind of guide my own board path. So, Matt is a great wealth of information. And one of the things that I did was I joined a Black Corporate Board Readiness Program that is at Santa Clara University and the Silicon Valley Executive Center.

It was tremendous. I have to say it. I’ve been on this journey for seven years to join, not necessarily a public board, but a big board. This is something I’ve been working on for seven years, and going through this kind of BCBR program at Santa Clara University, it was very, very eye opening because not only did they have a curriculum that they put together, which was fantastic, but they have had mentors and sponsors that were [00:26:00] parts of the program who were those people that I talked about, so Shellye Archambault and Barry Lawson Williams. It was Ken and Caretha Coleman who are kind of the godmother and godfather of black Silicon Valley with really, really incredible wealth of public and private company directors that came and gave their opinions and their perspectives and their recommendations of how to develop this.

But the other thing is understanding that we need to start. This is where Valence kind of plays, right? We need to start seeding the idea of board leadership at a very early stage in their career, because by the time you get to 40, you haven’t done the work that requires where you could have been working on that all along. You could have been serving on not-for-profit boards in your neighborhood. You could have been serving on, you mentioned Southern California Public Radio.

It’s something I’m very passionate about. I’m in media, they needed board members and they wanted to make sure that they had a diverse and representative Los Angeles to talk to, and so it was very easy for me to say yes to that, but if I’m not thinking about what my path is, [00:27:00] then I don’t know that I should be doing this earlier than later, and by the time you get to 50 or where I am now, it’s kind of like there’s a mad scramble for the best boards and  that track record helps you stand out.

 I think the training piece and then the awareness piece and then kind of just jumping in and doing it, find something you’re passionate about and serve that organization because it will lead to connections. It will lead to understanding. It will lead to expertise that then benefits you when you are going for those public boards later.

Raza: Yeah. So it is training. It is nonprofit or smaller boards. And it is also that have you been in the presence of boards, you’re presenting to the boards, you’re often in the boardroom for other reasons, and that makes you ultimately ready. A diverse board is almost always a stronger board, we truly believe, if it recruits the board member beyond the usual suspects. Has that been part of the effort for you at Valence?

Guy: Yeah, absolutely, it really is important. Again, the evolution [00:28:00] of technology and kind of the demographics of America, all of this, it’s constantly changing, and so if you’re not looking for ways to find a competitive advantage or a competitive response at a very minimum, you’re doing yourselves and your shareholders a disservice. So, as you kind of think about that, you have to skate to where the puck is going to be, not where the puck kind of is or has been, That’s how you win. That’s why Gretzky is the greatest hockey player in the history of the world is because he’d skate where the is going to be.

Joe:  Whoa, wait a minute here. What about Bobby Orr?  I’ve agreed on everything you said so far, and now, we’re getting into very, very troubling territory.

Guy: I’m from Pittsburgh, so I feel that my fellow Pittsburghers are not going to feel kindly that I didn’t say it was Mario Lemieux, but I recognize greatness, and again, if I could be the Gretzky of board members, I would be really, really happy.

So, again, all the boards that are looking to kind of nominate new board members, it necessitates a different approach. So, I’m not [00:29:00] suggesting that you have to have an entirely new board  to represent what the future, because there is an incredible value in having the experience of someone who’s served on those public boards, but there also should be, again to your point about diversity, not just diversity of experience or diversity of skin color or culture, it’s diversity of age, it’s diversity of kind of expertise. It’s diversity of experience, and so all of those things play into understanding kind of what your board looks like.

I would say that since I took over as CEO of Valence in June of last year, I knew probably three of the people that are at the company. Again, we’re a relatively small company, so we’re fewer than 20 employees, and I knew three of the people that are working for me right now and most of the people, I didn’t know. Of the people that I did know, I’ve only met two of them face to face. So, imagine what that world looks like versus you going in in kind of one of my former organizations, EDS, and when I was at AT Kearney going into EDS and you’re wearing your white shirt and your wingtips and [00:30:00] having kind of the blue suit or the gray suit and that world looks a lot different, and yes, you need that person because they’ve been there and done that, and they’ve seen this movie before, but again, we need people that can also predict the future.

Joe: Diversity of perspective. That is what we need. Anyway, Guy, it’s been great speaking with you today. Thanks for joining us on On Boards.

Guy: My pleasure.

Joe: And thank you all for listening to On Boards with our special guest, Guy Primus. To our listeners, we have a special request. If you enjoy our podcast, please take a moment to review it and rate it on the Apple podcast app. It really helps others find and discover our podcast.

 Raza: And to our listeners all of the episodes of the podcasts are also available right on our website. OnBoardsPodcast.com. That’s www.onboardspodcast.com. And you can also contact us with your comments, suggestions right there on the website as well. We hope to hear [00:31:00] from you.

Joe: Please stay safe and take care of yourselves, your families and your communities as best you can. Raza, you take care.

Raza: You, too, Joe.

Joe: Thanks.

© 2022 On Boards Podcast. All Rights Reserved.