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 cohost, Raza Shaikh. Twice a month, On Boards is the place to learn about one of the most critically important aspects of any company or organization – its board of directors or advisors – with a focus on 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 means to be an effective board member and how to make your board one of the most valuable assets of your organization.

Joe: Our guest today is Charles Shirley. Charles is the Northeast Regional Leader for PricewaterhouseCoopers Private Practice. He’s a trusted business advisor to companies in a [00:01:00]broad range of industries, including retail distribution, manufacturing, technology, publishing, among many others. Charles is frequently called upon by his clients around the globe for his expertise on both domestic and international matters. His clients are private companies with revenues ranging from $50 million to $4 billion.

Raza: In the community, Charles works with a non-profit called uAspire, whose mission is to ensure that all young people have the financial information and resources necessary to find an affordable path to and through a post-secondary education.

Joe: Welcome, Charles, and thanks so much for joining us today on On Boards.

Charles: Fantastic. So happy to be here. It’s a very kind and generous introduction. What was missing there is that I always introduce myself as the happiest person at PwC. It’s a big place, but I love what we do. I think it’s incredible. [00:02:00] I’ve been accused of drinking the Kool Aid and I do and that’s because it’s delicious.

Joe: Wow, all right. That’s great. Now, will this get you a raise anytime soon? Is that possible?

Charles: It’s going to glue in my spirits throughout the day. We’ve had the chance to get to know each other over the last several months, and it’s been fantastic. Actually, I’m getting much more out of this than you guys are getting out of me. It’s just been a phenomenal dialogue that helps me think broader about how I’m helping my clients and just folks become in contact with. It’s fantastic.

Joe: Well, thank you for saying that, but we’re going to squeeze everything out of your brain today, so we’re going to get a lot out of this too, so thank you again. Let’s start off with a little bit about your background at PwC.

Charles: Yeah. So, it started, believe it or not, 1993 was my internship so I’m not that great at math, but I’m pretty sure that’s over 30 years, which is pretty incredible. Kind of always been primarily in this private company space, it’s had different brandings over the [00:03:00] years, but kind of always working with family-owned businesses, some private equity portfolio companies or inbound companies, but kind of always in that capacity of private companies more formally beyond leading the private practice here in the Northeast. I am a tax partner and so like a technician as much as possible as well.

Joe: Thank you. Let’s start with the effectiveness of boards. You’ve seen it through the lens of your work as an advisor. What have you observed about the approach to board meetings while working with and watching management teams prepare for board meetings?

Charles: Yeah. So, obviously, at any given time working with a number of different clients, and primarily for me, that mix is a mix of businesses and high net worth families and individuals, I’m going to focus obviously primarily on the business side of things. But serving a number of clients, I attend a lot of board meetings, whether it’s our communities or board meetings, or just a regular series of events, and what I would say is, we’re going to talk [00:04:00] about, I think, good things and bad things or good examples and bad examples in the more constructive category.

I think what really gets my attention and gets me frustrated and actually calls me to action is when I see a process where the management team in preparing for the board meeting is really going through an exercise to curate materials that are perfectly positioned or worded or framed and so there’s this incubation period, this period of time where they’re curating the content, and then when they get to the board meeting, the board is somewhat passive or letting the clock run and not really asking the questions they should be asking to push and deep dive and dive deeper into the issues that are being addressed there.

Once again, we’re going to talk about positives to negatives, and I think on the negative side, once again, I think it’s when the content is just incredibly curated from the management team.

Joe: Do you say anything to management if you’re seeing that, particularly if [00:05:00] you’re there for some particular issue or series of issues about the materials that maybe they should open it up and bring in more information. Do you have that kind of conversation with them?

Charles: Yeah, I would say to a small degree. If i’m being honest, and I always am honest, in my mind a good board is going to see through that and push back and find the right questions anyway. So, in my mind, for it to be a non-success, the management would have to do their part to stare in the wrong direction and then the board would have to fail also kind of pushing back.

I may say some subtle things to kind of point in the direction, but then really hope that the board says something. And then if I do see a situation where both happen, management curates the content and board doesn’t push back, I think it’s a conversation after the meeting with the board to kind of advise them that, “Hey, there was an opportunity there to do something different that you missed”.

Joe: Oh, that’s excellent. One of the things we talked about is that when the material is highly curated and kind of the focus of the meeting is on a [00:06:00] presentation that that tends to make the board members passive during the meetings. They’re more like passive observers. Is that something you observe, and if you do, is that the kind of thing that would lead you to have a conversation with the client after the meeting to kind of maybe get them to get the board members more involved?

Charles: Yeah. And so the good news is, and I’m going to get ahead of us in a little bit here, I think in most instances, boards are engaged and they’re doing the right things. But there’s some that have not progressed the way they need to, to deal with kind of modern day issues. Where I do see that, you do have a conversation.

Typically, the path forward isn’t just a quick fix or pivot. There’s likely a bigger issue where companies need to re-evaluate their boards; maybe they need a different board member, maybe they need to mix up the seats, maybe they need to mix up the composition of the board seats, like do they have outside independent directors, like where are they?

So, usually, I think when [00:07:00] we see elements of a less effective board, it’s not just a quick fix, it’s really diving in and figuring out, do we need a different approach and do we need a different board and really digging into it.

Joe: Thanks. Yeah, that makes perfect sense. Now, from the board member side, as we all know, board members have a fiduciary duty. What are the things that you see when things aren’t going as well as you would like them to be going in terms of the board members? So, we talked about management maybe overly curating or maybe overly sanitizing sometimes the materials. What about the other side, when board members are not as active, what are the duties or what are the things that they’re doing that maybe you would advise if you were talking to them?

Charles: Yeah. In my own capacity as a board member, which is really solely on nonprofit boards or charitable work, I repeatedly made the comment to the board chair, like the ask needs to be [00:08:00]bigger. It truly is a privilege, whether it’s in the charitable sector or on the business sector, it’s an honor, it’s an opportunity to be part of a board and the ask should be pretty big. It really comes from the direction of the chair what the level of engagement is, and in today’s world, and I think it’s not lost in today’s world that there truly is a fiduciary responsibility to serve in that role as a director.

Joe: So, given the fact that there’s a fiduciary duty, what does that mean about the responsibility of a board member prior to and during the meeting?

Charles: I think it means you’re accountable for calling balls and strikes. You’re accountable for asking the questions. You’re accountable for looking around the corner. You’re accountable for sharing your perspectives and maybe getting at a rooted issue or new issue that hasn’t even been identified by management.

Once again, I think the management team is responsible for setting the agenda, setting the strategy, but the board is to listen [00:09:00] in, observe, provide input and feedback and question and challenge what’s happening.

Joe: When you attend board meetings, are there times when you’re concerned that board members have not properly prepared, in other words, not have read the materials, again to get back to the more passive observers listening to the presentation rather than having prepared and come with questions, do you see that often or sometimes?

Charles: I don’t think it’s often, which is good. And once again, I think a lot of the boards we work with operate pretty effectively. The biggest sign that that’s going to be an issue is when the board materials are distributed, god forbid, the day of the meeting. A proper board is issuing their materials with proper time in advance of the meeting and the expectation is that folks are digging in.

What I’ve seen it most effective is that sometimes you walk into a board meeting and materials have been properly distributed beforehand, but then the board in the meeting, whoever is presenting, goes [00:10:00] over the materials in a pretty deep dive when that was actually the pre-read. I think if people understand that in the meeting, there’s going to be a review of the materials, there’s a chance they may not prioritize and get to it in advance.

I think the best expectation and the best things I’ve seen is that the summary that’s provided in the meeting is really quick because the expectation is that everybody has done their homework and so if that’s the regular routine of the meeting, people understand if I don’t do it in advance, I’m not going to have the opportunity to join the conversation.

 I think once again, the approach of the board meeting, the way it’s run, the way it’s handled, really dictates kind of the individual board behaviors.

Joe: Couldn’t agree more about how materials are handled at the board. The rule of thumb that I often will discuss with clients is, the meeting itself should be 80% conversation and only 20% presentation. Often what I’ve seen is that [00:11:00] it’s the other way around. They fill the time 80% presentation and don’t allow enough time for actual conversation.

Charles: I had a team of folks, this isn’t a board meeting concept, this is just an advisor meeting where the team I work with had prepared a meaningful, robust deck of what we were supposed to discuss with our client, and I had reviewed the deck, probably not to the level I should have, but I had my arms around it.

When I got to the meeting, my client said, “Please don’t refer to the deck,” and just pushed it aside and said, “Let’s just have a conversation”. This was early in my career and I’ll be quite candid, I was not where I should have been on the issues. I was not as articulate. I needed the deck in order to have the conversation, and I wish I hadn’t had that experience, but I’m fortunate that I did because it was a great lesson in making sure you’re prepared for the meeting, even if you don’t have the deck.

I think that’s really the point, have you actually thought about it enough? Can you [00:12:00] put it in your own words? Have you digested enough to have your own perspective that’s separate from reading off a piece of paper?

Joe: I think that’s a great way to put it. You should be in the meeting and have understood the key issues enough so that you actually didn’t need the deck. What happens at the meeting should maybe be a reminder of here are the three or four whatever key points just to get everyone on the same page.

Charles: Yeah, just to double down on that. As we’re talking here, it reminded me of something we’re doing very recently. We’ve gotten in the habit of really over preparing for meetings lately. I’ve challenged my team to do so. These days it’s back to back to back to back to back meetings, like throughout the entire day. We joke about bio breaks in between meetings or whatever it may be because they’re just back to back. Well, it’s the same thing about preparation for the meeting, it’s hard to prepare for meetings when they’re back to back to back, so we’ve really gotten in the habit of over preparing where we actually sometimes even role play and [00:13:00] anticipate questions and figure out like who in the room is going to respond, and we actually do it.

I don’t know if my team actually enjoys the experience of the preparation, but the amazing impact, amazing effect, is that when we actually get in the room from the meeting, because everybody knows what we anticipate or how we’re planning to respond, we can actually listen. So many times you’re in the meeting and you’re trying to pay attention and you’re listening, not for the purpose of truly understanding it, but just trying to develop your understanding, whereas if you’re fully up to speed, your ability to listen in the present is enhanced in just a huge way.

So, going back to the original question, which was a while ago about board members actually being passive or just listening to curated presentation, if you have the materials in advance, huge expectation to over prepare so that when you’re in the meeting, you have your own perspective, you’re ready to contribute with or without the materials in front of you. [00:14:00] And being on that level of preparedness, you can actually listen to the conversation fully. You’re not analyzing and processing the core content. You’re analyzing and processing solutions.

Joe: I think you summarized it perfectly. The only thing I disagree with is the word over prepare. I think what you have described is the way a board member or advisors who are in the boardroom, how they need to prepare, because if you’re thinking about the subject and trying to take it through while the meetings going on, you’re bound not to be as effective. I mean, whether you’re a presenter or a board member listening and and getting ready to ask questions that are really meaningful.

So, yeah, I think that’s perfect. And if you’re doing that, then, wow, good for you guys and good for your team. I wanted to raise what I think is a great board practice or board composition practice and it’s the PwC boards that I wanted to mention. I know you can’t really talk about the boards much except the big picture which is that [00:15:00] In PwC, and there are other companies that do this, but I happen to know about your company, they don’t, what I would say, stack the deck in terms of who’s going to be on the board. It isn’t picked. People are not picked by they’re going to go along with management or they’re going to be easier to deal with.

My understanding is that your boards are populated by a vote of the partners and so anyone can end up on the board and it’s bound to be, I would think, a pretty broad spectrum given that you have thousands of partners. Have I described that accurately?

Charles: Yeah, I’m not going to speak very much about what our process is as a private company. I don’t think we share a lot. But I think the premise of what you’re saying is absolutely true, that one of the things that I think makes my particular situation special for the opportunity I have is that our management team or what I’ve seen at best in other places is the management team is truly independent from the board.

Actually, we’ve had conversations about this [00:16:00] before. When you have a board that’s comprised solely of family members, many of which are probably active in the business, like it’s just not an independent board. I think it fails, and so I think having the two be separate, having a management team that is separate from the board and sometimes there’s some overlap, that’s fine, but at a whole, they need to be kind of independent parties, and so I think you’re correct that PwC is a big place and we have some diversity perspectives and those diversity perspectives matter. But I think that the pillar of separating management from the board. to the extent possible, is hugely important.

Joe: Yeah, I think you’re right, and as I’ve mentioned in the past, if I am working with a family who has a board of directors and the only people on the board are family members, I will tell them they don’t really have a board because, while it’s great for families to get together, they should get together, they should talk about family issues, they should talk about distribution, but that is what a [00:17:00] board does, and it’s almost impossible to really do the work of a board if everyone is from the family or if there are no independents on the board, whatever that may mean in the context of the company.

I agree a hundred percent and I applaud any company, especially one as large as PwC, for really making such an effort to have an effective governance within their company. It doesn’t have to happen. You’re a private company. You could be doing anything internally, no one would basically know.

But I think that is something to be really proud of. So, I think it’s a great example that maybe sometimes you can even bring to your clients. If we do it, you can definitely do it. We don’t stack the deck. There’s no reason for you to be stacking the deck.

Raza: Charles, you alluded briefly about that a chair should be expecting more from the board members. How do you see the role of the chair in effective governance?

Charles: Yeah. So, the board chair sets [00:18:00] the culture ultimately, and culture really matters, and successful boards have strong intentions, they’ve done their assessments, they understand what they need to be and they’re mission driven. When you need to change that, you need a really strong chair to do that. If you don’t have the right chair, you really kind of question that, and most likely pivot to get you where you need to be. I mean, the culture that we talked about, every element we’ve talked about so far, and I imagine what we will continue to talk about during this session, it ultimately lies in the culture of the board, which is driven by the chair.

Raza: I think the culture of any organization or team and even a board is really hard to change, and I think you’re absolutely right that the chair will need to be describing the commitment to that change and coming up with a plan that gets them from a culture that’s not so conducive to effective board to a culture that can do that.

Joe: I agree with what Charles said about the importance of the chair. To change the culture, there has to be an [00:19:00] intentionality that the chair really needs to have, and if he or she doesn’t, then you might need a new chair, because it doesn’t just happen because you want it to happen. It’s not easy to change culture, so if you’re trying to change it or maintain it, there has to be an intentionality about it and that does, I agree, starts with the chair.

Raza: Charles, another area that we can talk about is, how do you approach your role as an advisor to management and boards? What do you expect them in terms of sharing information? How do you usually work with them and hope to see what they’re doing?

Charles: Yeah. So, I’m huge on collaboration and transparency and honesty and all those good things and those sound kind of virtuous. But it’s true, I always say like share your dirty laundry with me, situations where things don’t go well is where there’s a lack of transparency or lack of communication, especially when there’s actually a real root issue, so I’m always front and center and say like, [00:20:00]”Please share your dirty laundry with me.”

Because going back to collaboration, like my job is to solve problems all day long. I love doing it, and there are a lot of people in that category who are solution orientated, even in situations where everything is going fantastic and I feel like I have everything in control, if I bring somebody else into the conversation, it gets better.

My excitement or engagement with collaboration isn’t just in helping me dig out of holes. It’s everything I touch gets better when I collaborate, so I’m huge on transparency. Also, bad news doesn’t age well. It’s an old premise, but it’s absolutely true. The sooner you share, the quicker you share, the more people you get into the discussion, you’re going to have a better outcome. Even in the most troubling or dynamic times, it’s true.

The human condition. I’m going to get a little long winded here, the human condition, like our [00:21:00] flight or fight instinct is actually to seek other people. In those moments, transparency and collaboration are really important. If I’m an advisor to you, I need to know what’s going on with some clarity so that we can help solve the problem.

Raza: Yeah, this is such a strong concept that one plus one is equal to three, and the combination of perspective, especially diverse perspectives, always bring more to solving a problem or bring more effectiveness to the decision making,

Charles: Yeah. So, bringing that back to the discussion we’ve been having, if management is presenting to the board and the board is being invited to collaborate, and if the board doesn’t do their part, it’s just such a huge missed opportunity, and so it ties back to everything we’re doing.

Raza: One small thing that I wanted to go back to, Charles, was how you described very well about preparedness and its importance and how Joe was saying that in an effective meeting, hopefully [00:22:00] 80% of it is conversation and 20% is presentation. But have you seen the phenomena where the other flip situation is because the management maybe wants to run the clock on a topic, and maybe that’s not so great for the board.

Charles: Yeah, I mean, it’s just bright line obvious when it’s 80% presentation and 20% conversation that you’ve missed the mark. I mean, it’s just bright line, and fortunately I don’t think that’s the majority of the time, but I do still see it. I still see boards that just run through the motions. I don’t know that they’re aware that they’re running through the motions, by the way. That’s where the job of myself or you guys come into play to say, “Hey, wait a minute. Time out. You’re doing this the same way you’ve always done it and it’s not effective.” And so, you got to call it out when you see it.

Joe: I think that’s the hard part though. You’re right. If they’ve been doing it the way they’ve always done it, they may not even recognize what the problem is or that they have a problem. So, sometimes it does take a new independent board member, an outside advisor or [00:23:00] something, to really call attention to, “Boy, you could get so much more out of this board if you did it differently.”

Sometimes, unfortunately, it’s intentional, so that’s a different problem, but we don’t have to go there right now. But sometimes it really is management wants to run the clock because they don’t want to get too deep into something that they think they can handle and don’t want the board necessarily to get all over it. Do you see that?

Charles: No, actually, the trend I think is definitely going the other way. This idea of family business where there’s somebody that’s in a command and control position and kind of dictates how everything ebbs and flows, like that’s a model that I don’t think is current.

Things are complicated, really complicated, and I think they’re beyond the abilities of most anybody. So, in today’s world where there’s so many different factors and so many different levers and things you’re working with, [00:24:00] you have to have a broad group of perspectives in the room to collaborate and to figure out where you’re headed. I do think the actual trend is away from that, not because necessarily people just want to do the right thing, but I think the current state kind of dictates it.

Joe: That does lead me to the next question, which is maybe get an overview of trends you’ve seen in governance over the years. What are the things you think may have improved? You just touched on one thing that maybe it is forced because of complexity of life, so to speak, and what has made it more challenging for boards?

Charles: Yeah. In addition to the fact that I think that the trend being broader discussion of more diverse issues with people being engaged, we talked about it not just being friends and family. I think a huge movement to making sure you have truly independent board members. I know Joe and Raza, you’re big fans of that and I think you almost mandate it for the board to work with as super important.

I [00:25:00] think effective boards in addition to the task at hand of being a board for the company, there’s a portion of the agenda that’s focused on the board’s development as a board, educational aspects or things they’re doing to make sure that their governance is in the right place. There’s a lot more effort put into the construct of governance composition of the board than ever.

Joe: Yeah, I’m so glad you said that because I don’t think being a great board member is intuitive necessarily. It’s like anything else. Education helps, training helps, it’s any other profession and it is a profession because as we always talk about it, being on a board is actually a job. It’s not a volunteer position. Even if you’re not getting paid, it is a job and it carries a responsibility. I agree with you that the more training and education is better for the board members, but it also reflects a mindset about the [00:26:00] job, which is we’re not just assuming that you’re going to come into the room knowing everything there is to know about being a great board member, even if you’ve done it a bunch of times before. We all need to get better at this job, like other jobs that we may take.

Charles: Yeah. So, I think there’s plenty of momentum and the trends are definitely supporting that in a very favorable way. I guess looking at the inverse though, the things that I think have gotten worse, it really is this hybrid or remote approach to activities these days. I know I’ve been around a little while, so maybe I’m just too accustomed to doing things in person but there’s no doubt in my mind that for a board to be ideally optimized from an effectiveness standpoint, the more in person you can have is without a doubt the right approach.

I think we’ve had some boards that have gone the other way and they convinced themselves that being wholly remote works. I just don’t think it does. I’ll just say it categorically. I think the best ideas often come [00:27:00] in the cracks of the conversation. It’s not the formal presentation on a Zoom call, it’s on and off, one screen, one voice, and you toggle back and forth. You miss the conversations that happened in the cracks because the format doesn’t facilitate it the same way.

 I’m a huge fan of in-person meetings. I think they’re incredibly more effective. And once again, not because of the core content, but the conversations that happen in the cracks or the conversations that happen in the hallway afterwards. That’s where some of the best ideas that come from.

Joe: Yeah, I think Zoom is an effective tool to be used at times to help a board, but I agree with you, if you were relying totally on Zoom meetings, you’re missing the whole interaction that actually makes a board better. I mean, you and I disagree on an issue, let’s go have a cup of coffee afterwards and talk about it.

You don’t do that on Zoom. And what I observed during the pandemic when everything was Zoom is business got done, [00:28:00] but it didn’t get done completely or the interaction wasn’t as good. People kind of had lost the team ethic that develops on a good board over time because of the in-person interaction.

Charles: Yeah. It’s a trend that I think has slowed down, which is good, so I think it’s pivoting the other way. But overall, I think the engagement of the board is so robust that having that in-person kind of element to it is a necessity.

Joe: Yeah, I agree. Tell us about uAspire, the nonprofit, on whose board you serve. It sounds like an amazing organization.

Charles: Yeah, I love you aspire in a huge way. I was fortunate enough to find the organization a number of years ago. uAspire is, as you mentioned at the top of the podcast, focused on helping young folks have an opportunity through a secondary education and it’s challenging.

uAspire does the one thing really well and that’s helped them tap into existing financial aid programs. Believe it or not, there’s financial aid dollars that go unspent every year, and [00:29:00] so from a fundraising perspective, the linear relationship of gifting tuition dollars, that’s one-to-one, if I give one dollar, it provides one dollar tuition. If instead I support an organization like uAspire, there’s a real multiplier effect.

We’re providing consulting services that help kids tap into a huge multiple of one dollar. So, I love the idea of the leverage, and it’s pretty incredible.

Joe: I think it’s fantastic, and I did go into the website and there was one thing that really caught my eye, which is uAspire students are 80% more likely to graduate college. There’s probably a bunch of reasons for that, but that is a pretty stunning statistic.

Charles: It’s not just access to, but it’s being successful and getting through college, because I would actually tell you that you could actually disadvantage somebody if you help them get into school and then not matriculating, they could leave with an incomplete degree and debt. Well, that doesn’t help a lot of folks, so making sure that [00:30:00] they’re successful is as important as getting them access and uAspire is focused on that.

Joe: Yeah, amen. Really that is a fantastic mission and I’m glad we got a chance to talk about it Charles, it has been great speaking with you today. Thanks so much for joining us.

Charles: It’s incredible. I really do appreciate the opportunity.

You’ve opened my eyes to so many things over the last several months. I know we’re going to spend a ton more time together. I was on calls last week and I’m waving your flag. I just think the work that you guys are doing is incredible. I know the podcast is doing well, which tells me people are listening, and it’s a topic people care about, so I appreciate the opportunity to participate.

Joe: Thanks so much And thank you all for joining us today on On Boards with our guest, Charles Shirley.

Raza: Please visit our website at OnBoardsPodcast.com. That’s OnBoardsPodcast.com. We’d love to hear your comments, suggestions, and feedback. And if you’re not already a subscriber, please be sure to [00:31:00] subscribe at Apple Podcasts, Spotify, or wherever you get your podcasts. And remember to leave us a five-star review.

Joe: Please stay safe and take care of yourselves, your families and your communities as best you can, and we hope you’ll tune in for the next episode of On Boards. Thanks.