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 board 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 means to be an effective board member, the challenges boards are facing and how they’re addressing those challenges and how to make your board one of the most valuable assets of your organization.

Joe: Our guest today is Meghan Juday. Meghan is a fourth generation leader and Chair of the Board of Ideal Industries, a family business, which has been in operation for over a hundred [00:01:00] years. She has served on the board of Ideal since 2008 and became its Chair in 2020. Her leadership role at Ideal has given Meghan a unique platform to advance family businesses as a thought leader.

Raza: In addition to her work with Ideal industries, Meghan is a transformative family business leader who shares her expertise and vast experience through public speaking engagements, writing, podcast content, and consulting work. In addition to Ideal, she serves on the board of Kingsbury Inc. as well as several not-for-profit boards. Meghan was named one of the 2023 directors to watch by Private Company Director.

Joe: Meghan sits on the editorial board and contributes to NACD Directorship, contributes and sits on the editorial board for Family Business Magazine as well as for Private Company [00:02:00] Director. She also works as a consultant focused on family and corporate governance, and has served as a director of the Family Business Center at St. Joseph’s University. She also founded the Lodis Forum, an international peer group for women to focus on governance excellence and peer exchange.

Welcome, Meghan. It’s great to have you today on On Boards.

Meghan: Thank you so much for having me. I’m looking forward to our conversation.

Joe: So are we. Let’s just start with a little background about your family business and how you became involved with your family business.

Meghan: Sure. Ideal Industries was founded by my great-grandfather, very humble beginnings, his mother’s kitchen. He used pots and pans, so it was uh, very uh, low cost enterprise at that point, and it has ,been in the family for 107 years, a hundred percent family owned. Ideal is a manufacturing company specializing [00:03:00] in the electrical and infrastructure markets, and we have operations all over the world.

Joe: What was it that brought you into the family business? Was that something that you had aspired to your entire life?

Meghan: No, it’s funny, I did not. First of all, I was not a male, so I was never really expected to be or nobody ever kind of talked about Ideal as a potential opportunity. I do remember going to the office with my dad on Saturdays; he would do filing, which I would help him with. I don’t know how he ever found anything I put in the office. I think I was probably eight or nine.

I loved it. There was adding machines back then. I mean, that is just so satisfying. But although I liked my experiences and I did grow up with Ideal feeling like the fourth sibling at the dining room table that we always had to compete with for time and attention, I did really kind of walk away with a strong sense of pride in what Ideal did.[00:04:00]

However, I didn’t consider an employer mostly because at the time when I was graduating from college, the majority of the enterprise was located in Sycamore, Illinois, which is where I grew up, super cute town, but very small, and it was super male dominated and you just don’t see yourself there if you don’t see other women there. And of course, again, it hadn’t really been kind of spoken to me as an opportunity and so I went off and messed around. I had no direction post-college and somehow it just was super hot employment market, and I ended up getting a job at one of the big five consulting firms, which I loved.

I worked at massive corporations really doing a lot of project management and business analysis and organizational change, like all these things that kind of created this amazing foundation and working with all these people running around all the time. I loved everything about it.

While I was there, I met my husband. We didn’t work at the same place, but kind of coincidentally at the same [00:05:00] timeline, I met my soon to be a husband, and that was why I kind of realized there were no women working at this consulting firm between the ages of 30 and 45 because you’ve never really knew where you were going to get staffed. You could be at the same place for eight years, or you could end up with different month-long engagements at various locations, on a plane every week.

They hadn’t at that time figured out how to job share, how to remote work, so really, it seems like a long time ago now in terms of technology, but it really doesn’t feel that long for me, and so I ended up deciding I was going to stay home with my son for a year. I was super excited about that and just wanted to be there with him.

I got a phone call from my dad, I think I had a three-week-old at the time, and he called me and said, “Now that you don’t have anything to do, can you just come work on this project?” But you know what’s crazy? It’s like people talk about how challenging parenting was and I was like all kind of ready to go, and that three-week-old [00:06:00] sleeps all the time. I was like kind of poised and ready for the big onslaught.

Really, in my mind, I was thinking, I do not know what the big fuss is about, this is fine, and so I said yes to this opportunity. Honestly, had he called me with a six-month-old, I would’ve been like talk to me in three years.

Joe: Yeah, are you out of your mind.

Meghan: Yeah, but it was perfect and I feel so grateful. It was super. You really used a lot of the skills that I got in the consulting practice and ended up taking a lot of that and bringing it to the family as well, but it also allowed me to work remote. I’ve been working remote for 20 years.

Joe: Right.

Meghan: Although I did have to travel a lot for the majority of the time, I was there present with my children. I could take ‘them to the doctor’s office and go pick them up from school, and those things, they’re so important and I just had felt like it was like such a gift.

Joe: Especially then, I mean, really, it was not typical 20 years ago to be able to work remotely in a job of this caliber.[00:07:00]

So, you learned about your family business while still being able to spend time with your children, a nice combination, and sometime in the early 2000s, you began to really get involved in the governance of your business, so just talk about that if you would.

Meghan: Yeah. I came in on the family governance side, so I came in to try to help engage that, the fourth generation, which is my generation, in the family governance, recasting the family governance so that it was really relevant to all family members, not just the third generation who had started it.

Soon after I became Family Council Chair within a couple years of me coming in and working on this, and as part of that Family Council Chair role, I was offered a seat on the board, and that’s when I really started getting very intrigued at the interplay between family governance and corporate governance.

I think in talking with other families, my exposure with them, a lot of times family businesses will [00:08:00] have a very strong corporate board and they’ll put a lot of their money and time and investment into it, but they kind of starve the family as like something that’s not important.

In my mind, I really think that family governance has to be equally invested in and taken just as seriously because you’ll find, I bet you, there are so many family businesses who ran into this problem where if you had a weaker family governance, or a major business issue so that the board was kind of not handling or missed a step on, the family will start getting involved with the board and trying to make business decisions, or the board will start hedging against the risk of the family and start getting involved on the family side.

It’s when you have that crossover, it’s super distracting for management and it’s very unproductive, and so my rule of thumb is family businesses should expect to spend and invest as much on their family, their family engagement, risk mitigation, and family education [00:09:00] as they do on their corporate board. A lot of people think that that’s crazy, but I think it’s irresponsible not to.

Joe: Well, I think it may be irresponsible, but it also ultimately leads to a lot of family governance issues. The ones that we all hear about are likely a result of a failure to address the family governance side. I think what you’re saying, we see playing out in the front page of the Wall Street Journal on a regular basis.

Let’s just go back for a second just outline who your family is, how many shareholders, family members who own shares.

Meghan: We have 30 shareholders, and then we have 50 family members, and we try not to make a distinction between who owns shares and who doesn’t, because all of those spouses and partners are likely parents of future shareholders or current shareholders.

I want everybody in the circle. I want to hear all the voices. If there’s any concerns, I want to know it because they are [00:10:00] massive contributors to the organization and significant influences in that, that next generation, which you really want to have a positive interaction and a positive experience with the company and the family.

Joe: But you only allow people who are blood relatives to actually own shares. Is that right?

Meghan: Yes,

Joe: How did that decision come about?

Meghan: That was, mostly enacted by the founder, J. Walter Becker, and by the way, the only reason why we owned this company a hundred years later is because of estate planning.

Joe: Hmm.

Meghan: This stock was put into trust, it’s been passed down. Super proactive estate planning and I really owe it a lot to that second and the third generations as well because they limited their current growth for the future benefit of generations, and I think we owe them a lot because we wouldn’t be here without them.

Joe: Great foresight on their part to be very focused and organized really on what was going to happen to [00:11:00] ownership of the company.

Raza: Meghan, when we last spoke, you defined family governance as the structure necessary to keep disorderly system of a family ordered. What do you mean by that? And maybe talk about that structure that you guys have put in place for your family governance.

Meghan: I think that the family, like any system, really wants to kind of descend into chaos. A lot of decision makers, a lot of influences, everybody wants the key roles, everybody wants to be able to tell the CEO what to do. I mean, I’m saying this hyperbolically, but I think that family governance, it’s really important that it’s intentional.

One of the conversations that we have in our family council every year is what is going to change in the next 10 years whether or not we have a plan, and we look at several different systems. We look at the families, so we have all those cute 8-year-olds, they’re going to be 18, we better have a plan. We better [00:12:00] have talked to them about the company. They better have been exposed to the family between now and then.

You kind of get this arc of responsibility or action items that you have to take care of, and we do the same with the management, the company and the board, because I think what happens often is that family businesses are caught off guard by change and transition because it makes sense. My father was Chairman essentially my whole life.

Have I conceived of him not being Chairman? No, you can’t. It cannot, like this is this person and this is a role, and I think it just makes sense that families kind of get caught off guard by that, and that’s why I think it’s that kind of disorder surprised by transition, which literally should be the most obvious thing. You have to make a plan for it and be intentional.

The same with relationship management, the same with communication, the same with. Interactions between the family and the board and the family and management, that it has to [00:13:00] be this. I’m not saying rigid, but it has to be organized and intentional.

Raza: In terms of structures, you have a Family Council. Do you have a separate board that’s separate from the family, and is there any other governance structure in between?

Meghan: We have a family council. it’s not making the same business decisions as our corporate board, but kind of similar overarching responsibilities. We have the family council who kind of oversees the engagement, interaction and kind of policy development agreement, et cetera, and they’re of the family and the family ownership, and all they’re trying to do is mitigate risk, maximize engagement so that the family feels fantastic about owning this asset and then making sure that any interaction between the family and the company, or the family and the board is super organized and orderly.

Raza: Who is on the family council?

Meghan: We have a non-family member [00:14:00] running it. She was director of a family business center and we kind of lured her away, and so she works full-time and then I have another family member who’s chair of the family assembly working full-time, and then we do have other resources that we tap into for various matters.

We have outside development education firm that helps us with family director readiness. We have executive coaches that work in that program as well, and then we have a development education director that is helping us with some of these matters who works at Ideal and then in the family council, it’s willing volunteers who are able to commit. We’re happy to have visitors, but if someone calls themselves a family council member, we really want them to show up.

Raza: You mentioned family assembly. Is it different than the council?

Meghan: Yes, so the family assembly is really just the word we use for the entire family, and we do have objectives that we have around that family assembly. We do a lot.

[00:15:00] Our company evolves and changes very quickly, and we were finding about 10 years ago that we were having family members who would come to an annual meeting, go home, think about other things, and then come back the next year for the family assembly meeting, and they just didn’t understand. Everything had changed. We made acquisitions. They didn’t know what these companies did. They didn’t know the conversations that were being had, and so we actually started doing a lot of education with the family assembly.

We do quarterly calls with our CEO to talk about business update, quarterly call with our CFO to do financial overview and some education and training around just being comfortable with understanding some of these financial dynamics. And then we do expert series as well where we’ll bring in subject matter experts on various topics that may have some relevance.

We actually had someone come in and talk to us about crypto, which I don’t think any of us understood. Blockchain, definitely there were steam coming out of some [00:16:00] families here just for their brains trying to figure that one out. But we do education and training around a lot of various matters. We bring in a lot of subject matter experts to talk to us on various topics.

Raza: Meghan, maybe talk about the board itself. Is that like a regular corporate board? How is the board composed? Maybe what committees does it have, and how does the whole board system work for your family?

Meghan: Sure. The corporate board is a fiduciary board working on behalf of the shareholders in the company and we’ve made a lot of changes over the years, which we’ll get into, but one of the things that we’ve moved towards is really trying to make sure that the board is adding maximum strategic value and has oversight of some of the key programs that have been implemented at Ideal.

I am chairman as a family member. We have an outside CEO who is a sitting director. We have three independent directors and then two other family members. I want to like put a little disclaimer. We are actually short two directors right now [00:17:00] and we will be starting a search. Under normal circumstances, it would be one inside, five outside, and three family is our normal operating process.

We have a nominating governance committee who also oversees our ESG programs, which we are in our infancy around, and that’s led by a n outside director. We have an audit and risk committee that’s also led by an outside director, and then we have a culture and compensation. We moved our compensation committee to also embrace culture because we want to make sure that the compensation is driving the culture we intend as well as the business results.

We don’t want to be like business results at all costs and forget about the people because that’s not really our values, and that is run by a family member, because I think that’s really important to get that right.

The nominating governance committee also has a [00:18:00] responsibility for, first of all, making sure that we have a great governance program in the boardroom, and I work very closely with the nominating governance committee’s chair just to make sure that we’re aligned on how we want to pivot the board over time.

The other thing they do is put together the slate of directors. We do this on an annual basis, and that slate is really derived by thinking around what is the strategic direction of the company and do we have the right skillset to be helping pull the company into the future, and so I really think the board needs to be kind of forward leaning or future leaning and have the skillset sets and expertise of where the company wants to go directionally, strategically.

Raza: Is there a specific way how shareholders vote in these directors?

Meghan: We put together in the nineties a voting trust, [00:19:00] and so of those shareholders who had voting shares, they essentially put them into this trust, and depending on how many voting shares you had, that’s how many units you own, but then you basically take those units and vote on the voting trustees, and those voting trustees, there are two, have a responsibility to review the slate of directors and approve or disapprove. Hopefully it’s approved if we do our job right.

In fact, the voting trustees come to all of the board meetings because there’s no way that they can actually know if the board is being effective and representing interests of the family unless they’re there in the room.

Joe: But they are not voting members of the board.

Meghan: They do not, I mean, unless they’re full directors.

Joe: Right.

Meghan: If you are a voting trustee, you’re just kind of passive observer. In fact, for decades, our voting trustees were also directors so they would be voting as a director, not as a voting trustee.

Joe: I see.

Meghan: I’m in close contact with the voting trustees at all [00:20:00] times just to make sure. A voting trust is really the rip cord if everything is going wrong, you’ve got a rogue board, they don’t understand what the family is doing or something terribly goes wrong, you have that final protection of the family to intercede and stop whatever is going on. They do have the capability of removing the entire board if they need to or whoever.

Raza: How did you come to this structure?

Meghan: Again, I think this is what’s so interesting about the previous generations being so thoughtful and thinking with such a stewardship mindset, and so one of the things that they saw was that our family essentially, and you’ll hear the word branch a lot in family business, but our family basically had two branches, and depending on who died first, voting control would flip flop between the branches.

But they really just wanted to work together. If you kind of harmonize the [00:21:00] elections, then you don’t have these big swings, and so they decided unanimously to put all of their voting shares into this voting trust. They still get the financial benefit of that, but the voting control goes to the trustees and the people who own voting shares, they can remove a voting trustee at the drop of a hat as well. There’s like a lot of moving parts in making sure that the voting trust is working on behalf of the full interest of the family.

Raza: I think this might be a great process to get it right with close communication with all of these moving parts, as you said.

Joe: One of the things I remember is that the two people who are currently serving as voting trustees have done it for about 30 years, so that is remarkable in several respects, one of which is it must really create a great amount of stability in governance for your family. How did this stability really take place? And by that, I mean, the transition from the second and third [00:22:00] generation to you, the fourth generation, and going forward, how did that become not so contentious?

Meghan: I think it’s more contentious now, actually, and that’s not even pejorative, and so the voting trustees who served for 30 years, they did step down a few years ago and we’ve put on some new people. But what happened, I think it is super common in family businesses. The founder, runs it like a patriarch, makes all the decisions mostly for their entire life. Whether or not the second generation is in charge, they’re still pulling the strings and making things happen.

The second generation, once they get a chance to lead will follow that same dynamic, because they really think that it’s the only model, and in fact, this is probably the father or uncle of everybody and superior, and so what happened in the third generation, my father was the only boy born in the third generation.

Joe: Ah.

Meghan: That’s nuts, isn’t it?

Joe: Yeah, wow..

Meghan: There were seven of [00:23:00] them. He was the only boy

And

Joe: The others don’t count!

Meghan: Sadly, it’s tragic, but they were not offered meaningful roles at the company, and, you know, dirty Midwestern manufacturing company, ladies didn’t work there, and they were all ladies, very proper. We ended up with a scenario where my father ran the business as a patriarch for the first half of his service to the family.

It worked because his sisters, the fourth generation was too young, and his sisters were like, “Yeah, he’s the boss.” By the way, he’s CEO or chairman, so these leadership roles, only guy, like everyone kind of deferred to him, and once we started running into problems right about when I came in, I would say, not because of me, I will assure you.

Joe: Interesting though.

Meghan: But that fourth generation was starting to come of age and say like, “Who is this guy? He’s not my dad.” Oh, he was my dad, but like my cousins were saying, “He’s not my dad. He is not the leader, like I want have a say. ” So, [00:24:00] his leadership model just wasn’t effective anymore, and so we made a lot of changes in the family governance to try to adjust for that.

But now this is what’s happened. I became chairman, the first woman really family leader ever, and the first female chairman ever in the history of the company and the first time we’ve had a woman in a senior leadership role in the family, and of course, it all happens over COVID, which was terrible timing. Although it was planned and everything, it was just crappy timing.

What happened was, I realized that I can’t make these 50 people do whatever I say. And by the way, the company is way too complex, the family is way too complex, so that if you only had one person’s ideas being executed, we would be missing out major opportunities. I really moved to much more of a collaborative model, not really consensus, but collaborative, where we’re bringing [00:25:00] people along, we’re asking for opinions, we’re getting insights from the family side.

We’re not asking them about business decisions, but just in terms of our interaction in our family governance side is bring people along collaborative together rather than that top down model that went on for the first a hundred years essentially.

I think that it took time for the family to adjust to like they have a voice, they have a say, they have insights to share, that it wasn’t all just top down, that really did take time, but I think we are seeing some very positive results and it’s too much burden, I think, for one person to take full responsibility for whether or not a company remains a hundred percent family owned for the next a hundred years. It’s just not possible because then, I was finding myself getting frustrated with family members who were doing things that was making it really hard for me to carry the entire family.

Joe: Right, [00:26:00] right.

Meghan: And then I realized, “Oh, I mean, if the family doesn’t want to remain family owned for future generations, well, let’s not do it. It’s not solely my responsibility,” which believe me, it sounds so silly, but because of the way that I was grown up and the way that I have seen previous leaders, I really did feel like it was only my responsibility and that no one else was going to be held accountable, and I can’t tell you, in doing my own work over the pandemic, how freeing it was to realize that we’re all going to be responsible. Yeah, I’m going to do my part and I’ll probably do more of my part just because like of my role, but I’m not the only one responsible, the rest of the family has to agree that this is how we want to go too.

It’s funny, I talked to my dad a lot who kind of ran the company and the family with a lot of oversight, I shall say, and this makes him uncomfortable, and I can [00:27:00] see why, because the other thing is that the family don’t have like a generation’s history of being seen as a participant and a collaborator, and so it’s kind of hard for them to wake up and say, “Yeah, this is on me. We got to make this right.”

Joe: So, your father has accepted what you’re doing, obviously, even though it may make him uncomfortable because he must see that the evolution has actually addressed, let’s say, some of the issues that the first couple of generations kind of passed onto your generation. Is that fair?

Meghan: I know it is fair. I mean, he will voice his discomfort mostly because of his past history. He always felt like he was the only person responsible and he has to follow on authority; he has to do the duty. My thing is, “Hey, we’re all in this, we’re all responsible, we all have to take ownership, and if people don’t want to take ownership or it’s a consensus that they want to do something else, then let’s go do that.”

Joe: When we talked earlier you mentioned that there was a[00:28:00] branch of the family, a small but vocal branch, that was very difficult for a long time and that has shifted, and I wonder if you could just talk about how that shift took place and then we’ll move on to the transformation of your board.

Meghan: Yes. Disclaimer here, you can only go day by day with the family, so I would say today it’s good. Tomorrow I may be like crying in my pillow. It is just because you just never know what’s coming up.

What happened was we noticed at my generation that we had some dysfunctional communication dynamics, that were really making it hard for us. We had all this amazing governance, but it was really making it hard for us to make proactive steps forward, and so a bunch of the fourth generation, I was super proud of them, decided that they did not want those kind of dysfunctional dynamics to be continued and passed down to their children as it was to us.

We did a big search and we hired a [00:29:00] licensed therapist who specializes in family business dynamics, and we did therapy as a group every two weeks for two years and we did a lot of like one-on-one therapy as well with the therapist, and it was so unpleasant. It was like over the pandemic, everyone is stressed out anyway. We’re doing all this work.

People are upset about not with the people, they were upset about things that had nothing to do with the people in the group, but they didn’t have an avenue to go out to the other people that might have passed away. A lot of the issues that we have started in that second generation and they’ve long passed away, and so a lot of it kind of got transferred to me as the current leader, and so it was super challenging and very stressful.

However, we’ve made progress. During that therapy process, it really brought the rest of that fourth generation along and said like, “Here, we’ve done a lot [00:30:00] of really strong and powerful things and we’ve now seen all the opportunities given to those family members who feel disgruntled, and we are convinced now that they have been treated correctly and that they’re not taking their ownership and their part of the issues.”

Having done that work, it totally shifted the dynamics, so now nobody’s falling for it anymore. They used to fall for it all the time, ‘Oh, you’re such a victim. We feel so sorry for you,” and now it’s like, “You’ve had your opportunities, you have your resources, go fix your problem,” and so it’s calmed down significantly.

Joe: So, this change in dynamics, I think you said something like that the message is that bad behavior is no longer welcome. Is that a fair…

Meghan: Yeah, and it’s no longer welcome in unhealthy ways. If I did something that hurts somebody’s feelings and they call me up and say, “You did this, that hurt my feelings,” that is a completely different thing, and I would welcome [00:31:00] someone saying that because I want to know I didn’t do it on purpose, from like someone being passive aggressive or nasty over public emails in the family and all that hoopla around that.

Joe: Right. Well, that’s what I was thinking about when I said bad behavior because it sounded like you were taking a lot of flack for a long time, and the rest of the family kind of came around to really stand with you, if you will, on this.

Meghan: Yes, and it wasn’t just with me. It was for the benefit of us all that this stopped, which I feel very grateful for.

Joe: Right. Let’s talk then about the transformation of your board. Talk about what you inherited as a board and what has happened to it and what and how you did it.

Meghan: Yeah. When I started as chairman, I had five outside directors and three family, including me, and I was like running into issues. I was named chairman February of 2020. By March 1st, the sky had fallen in the pandemic, and so I did not have time to really orient myself [00:32:00] to the new role, orient the board in what we were trying to do.

I had talked with our CEO and our nominating governance committee chair before I started of this is the mission I think we need to go on. I think we need to move our board from being kind of quiet fiduciaries to super interactive strategic contributors, and so there’s a lot of busy work that happens in the board or a lot of work that you are doing in the board that actually, if you did it in the committee, it would be more effective.

We redid all of our committee charters. We redid our board agenda to leave space in our board agenda for open discussions. Nobody’s rushed. We added a board dinner the night before. We added in-person committee meetings the day before. The board was also spending more time together, and we were inviting anybody who was presenting the next day to the board dinner, so they would get to meet people and, and talk.

We’ve added board education, [00:33:00] so we do two board education sessions a year. We’ve included doing an enterprise risk management oversight into the board. We report on that four times a year at the audit and risk committee. Cyber, we’ve just kind of went through this huge body of work and really moved the board to be very strategic.

 That was kind of the goal and we’re there, but I was realizing that I was getting a lot of pushback with some of the directors. They were coming to board meetings not prepared to engage straight into conversations. They were expected to be presented to, et cetera, et cetera.

I felt like there was some undermining also going on. I had a director who offered to be chairman, and I could just stay on as vice chairman, and I was like, “Oh, my gosh, that’s so nice.” He’s like, “Well, I’ll mentor you.” And I was like, “That is so nice, but how about this? I still be chairman and you still mentor me.” And he was like, “Oh, God, that’s not going to work.” Stuff like that too, which I just thought was weird.

Joe: [00:34:00] Yeah. But I’m going to say not surprising given the culture. What you’re just describing is a massive cultural change that took place in a relatively short period. I mean, it was brewing for a while, but you offboarded, as I recall, four directors in two years, and for a family business with a relatively small board, that’s pretty significant.

Meghan: When I moved the first two off, they had been on our board for a really long time, and by the way, all these people are wonderful people, but one of them had been on our board for over 20 years. Like that person is not independent anymore, even if they’re trying to be, you know?

I think once I moved two people off, there was like more of a backlash. I need to tell you one thing that just blows my mind. There is this Ernst & Young study, they do it every year or every other year, and and I can send you a link to it, but basically, they talk of the directors that they interview, do you have a director on your board who you think is not adding value? And 50% of respondents say yes,[00:35:00]

and then like another 25 say two directors.

Joe: It was the

Meghan: It’s crazy

Joe: that the PWC annual report and it was one of the most striking things in the entire report, because if that’s true, what are you doing? That means you’re letting your board be a lagging indicator. I mean, you used the term when we talked leading edge, and I used the term when I talk to people that I’m working with, you can’t let your board be a lagging indicator. It should be a leading indicator.

Meghan: I totally agree.

Joe: But it’s hard.

Meghan: In fact, what was fascinating to me is, we moved two people on. We brought in two female directors, incredible, talented, extraordinary contributors to the board, but until we moved off our second two, we really never got the strategy engine going.

I think my lesson learned is that composition [00:36:00] is the first. If you’re ever trying to make a change in the boardroom, you have to deal with the composition first, because if you are trying to do all these wonderful changes and it’s just falling flat or it’s being seen as a threat, that’s where it will be fruitless work.

Joe: Composition drives culture. There’s no question

Meghan: Yeah, I think it does. And in fact, you see this all the time. When you see these talented, wise, amazing, eager people out there, there is no reason to hold on to a non-contributor or somebody, not even a non-contributor, amazing contributor, but has outdated experience for where you want your business to go.

Like yes, they’re hard decisions, and you do feel some loyalty to them, but one of the things I value most in my directors is this mindset of service. They’re there to be of service to the board. People talk about board service, but not a lot of directors embody that mentality, and that, to me is so valuable, is to have somebody who’s like, “Yes, I want to do the [00:37:00] right thing for the organization, even if it means me being in the room is the right thing.”

Joe: Right. At the highest level, that’s what a board member should be thinking. He or she should be thinking, “Am I still a serious enough contributor to continue?” But very few people actually come to that on their own, and that creates what Raza and I have discussed with a lot of guests; board leaders, CEOs, board chairs, whoever it may be, that’s the biggest challenge they face because this sounds so trite. It’s not personal. It isn’t you are a bad person. The fact that you may not be the right person for our board now doesn’t mean there’s something wrong with you. It’s just that it’s a company.

You don’t have the same CEO for 25 ,years or rarely, do you. And the fact that you have a new CEO doesn’t mean that old CEO or the former CEO was not doing his job or her job, but life [00:38:00]changes, things are changing, business is moving. We’re in the 21st century. The same board is going to work in five years that worked five years ago, it’s just almost certainly not going to.

That is the challenge. But it sounds like you have faced that challenge, and in my view, succeeded incredibly. We wanted to talk a little bit about the work you’re doing as hard as it is for me to believe beyond all this family work…

Raza: Yeah. Meghan, you do a lot of work beyond being a board chair in terms of writing, speaking, sharing your knowledge to the broader audience of family businesses. Where can people find that?

Meghan: I have a website, meghanjuday.com. It’s pretty easy. You can see a lot of my speaking engagements and articles there, and I wanted to call out, I also wrote an article about how to tell if you’re one of the 50% of boards who have one director who’s not adding value. People can go there and look it up.

But I also realized that when I started as [00:39:00] board chair, I needed resources. I needed help. I was feeling isolated and alone, and just having that question of, “Is it me? Is it them?” It’s probably everybody, all of us, and so I ended up starting a peer group for women in board leadership roles, and we focus on both governance excellence and education around how to oversee some of these big programs that are coming into the boardroom; ESG, D&I, ERM, cyber, et cetera.

We meet about 11 times a year. One, it’s in person, and then the rest is virtual, and we’re bringing in subject matter expert speakers, authors to come speak to us around some of their amazing expertise as well, and that’s called the Lotus Forum.

Joe: We will post that on our website along with this article, which I think would be great to have. I’d love to see it.

Meghan, it’s been fabulous speaking with you today. Thanks so much for joining us.

Meghan: Yeah. Thank you so much for having me. I loved [00:40:00] our conversation.

Joe: Thank you and thank you all for listening to On Boards with our guest, Meghan Juday.

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 subscribe to Apple Podcast, Spotify, or wherever you get your podcast, 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. We hope you’ll tune in for the next episode of On Boards. This is the last episode of our seventh season. Season 8 will be coming soon. Thank you very much.