Boardroom Governance with Evan Epstein

0:00 Intro.1:30 Start of interview2:00 Lisa's "origin story". She grew up in Silicon Valley and after attending college at Stanford, she moved to Mexico City for 3 years where she worked in a boutique consulting firm. She later got an MBA at Harvard Business School. She then joined Bain & Co., became CEO of KnowledgeX (later sold to IBM) and co-founded ValuBond. She joined Visa in 2009, and Salesforce in 2012. In 2019, she joined the board of Colgate-Palmolive.8:20 In October of 2020, she joined Diligent Corporation as President and COO, based in SF/Bay Area. "Diligent has about 70% of the Fortune 1000 companies as clients, and it's a truly global product." Diligent did four acquisitions during the pandemic, aggregating "governance, risk, compliance 'GRC' and ESG." "It's a $40 billion TAM, and we are the biggest SaaS player in the space." "It's a killer set of applications together."13:45 Diligent Corporation got taken private by Insight Partners in 2016 (valuing the company at $624 million). "Now it's got to be one of the largest private SaaS companies."15:05 On the evolution of technology and board portals in corporate boardrooms.16:37 On the rise of ESG. "It's a very global trend." Examples from Australia, EU, UK, etc. On the SEC's approach with Chairman Gensler. Their global survey with Spencer Stuart, "finding 71% of boards are incorporating ESG into their company strategy, with 85% taking action to increase fluency on ESG." See Sustainability in the Spotlight: Board ESG Oversight and Strategy.20:56 Her thoughts on the L.A. state court judge striking down SB-826 (AB-979 got struck down in April) and what these rulings mean for board diversity. "Globally, women now occupy 26% of board seats." "In California, women occupy 28% of board seats." "So it seems that SB-826 and AB-979 had a positive effect on diversity of boards."26:41 On the recent push back by tech titans (Marc Andreessen, Peter Thiel, Elon Musk, etc) on ESG, including the power of institutional investors from the likes of Larry Fink from BlackRock.29:05 On dual-class share structures. "We [Diligent Corporation] don't have an official position on it."31:32 On the rise of private markets and governance of private companies.37:04 On the politicization of corporate governance. "It is a sea change, 10 years ago CEOs avoided commenting on any political issue."39:05 On the looming recession, and what directors should be doing in this economic downturn. "Boards have dealt with crises before such as the dot com crisis in 2000 or the GFC in 2008, and it looks like we're hitting a new crisis." "It will disproportionally impact private companies."41:41 On virtual board meetings. "The virtual board meeting is 100% here to stay, but not 100% of the time." "There is no substitute for looking at people in the eye, no substitute for the hallway conversations."42:29 The 3 books that have greatly influenced her life:River of Doubt: Theodore Roosevelt's Darkest Journey,  by Candice Millard (2005)The Power Broker, Robert Moses and the Fall of NY, by Robert Caro (1974)I Will Bear Witness, by Victor Klemperer (1995)43:09 - Who were your mentors, and what did you learn from them? Her Dad.The Bridge Group (women peers)43.52 - Are there any quotes you think of often or live your life by? "Don't let the perfect be the enemy of the good." 44:33 - An unusual habit or an absurd thing that she loves: Harvesting honey bees!45:31 - The living person she most admires: RBG.Lisa Edwards is President and Chief Operating Officer of Diligent Corporation, the leader in modern governance providing SaaS solutions across governance, risk, compliance and ESG with more than $500 million in revenue and a $7 billion company valuation. __ You can follow Evan on social media at:Twitter: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License You can follow Evan on social media at:X: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

0:00 Intro.1:18 Start of interview2:01 Anat's "origin story". She grew up in Israel. She practiced corporate law, VC fund formation, startup representation and M&A in Israel before moving to the U.S. 7:03 Her academic focus at Case Western Reserve University School of Law (Cleveland, Ohio).9:12 On the practice of compelling employees, who are not yet stockholders, to waive their stockholder inspection rights under Delaware General Corporation Law (Section 220) as a condition to receiving stock options from the company. Based on her paper Bargaining Inequality: Employee Golden Handcuffs and Asymmetric Information, triggered by this WSJ article on the DOMO case.20:42 Her hand-collected data set consisting of the SEC’s public filings finding that many firms began requiring that their employees sign a waiver clause titled “Waiver of Statutory Information Rights” post Domo (there was a "huge uptick"). NVCA's model legal documents including this waiver clause in its Investors' Rights Agreement.27:58 The Good Technology (2018) and JUUL Labs, Inc. v. Grove (2020) cases. Description of classic conflicts of interest in venture-backed companies. Discussion of the "internal affairs doctrine".37:35 On dual fiduciaries and "new" conflicts by founders with other common stockholders (prompted by super voting shares, multiple board votes, ff preferred stock, etc). The Trados case. Fiduciary duties of venture-backed company directors. On the shift of control from VCs (preferred stockholders) to founders. "Bargaining power is the key."54:32 Take-away thoughts for directors of venture-backed companies. Lawyers as gatekeepers.58:06 The 1-3 books that have greatly influenced her life:Startup Nation,  by Dan Senor and Saul Singer (2009)Regional Advantage, by AnnaLee Saxenian (2006)The Capitalist and the Activist, by Tom C.W. Lihn (2022)59:34 - Who were your mentors, and what did you learn from them? Irit Haviv Segal, from Tel Aviv UniversityLynn Stout, from Cornell Law SchoolRobert Hockett, from Cornell Law SchoolFrom NYU: Ed Rock, Helen Scott, Karen Brenner, Gerald Rosenfeld, David Yermack.1:00.48 - Are there any quotes you think of often or live your life by? "Be the change that you want to see in the world" "I've always been an activist and that's the mantra that I live by."1:01:28- An unusual habit or an absurd thing that she loves: Fricasse (Tunisian sandwich), working out.1:02:02 - The living person she most admires: Prof. Jill Fisch (Penn Law).Anat Alon-Beck is an Assistant Professor of Law at Case Western Reserve School of Law. Her research examines how legal and regulatory structures influence the shift in equities from public markets to private markets, and the rise in the number of “unicorn” firms.__ You can follow Evan on social media at:Twitter: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License  You can follow Evan on social media at:X: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

0:00 Intro.1:37 Start of interview2:19 Joel's "origin story". He grew up in Stamford, Connecticut ("it was a land of many corporate headquarters"). He went to Wharton undergrad and U. Penn Law School. Later, he clerked at the Court of Chancery in Delaware and worked at Skadden's Wilmington office in Delaware "[the office] had been built around the hostile takeover litigation in the 1980s." In 1995, he joined a new litigation boutique with Stephen Lamb (later Vice-Chancellor of the DE Court of Chancery). Andre Bouchard (later Chancellor of the DE Court of Chancery) joined in 1996.5:35 The difference between plaintiff and corporate/defense firms, starting at law schools and law student recruitment.7:04 On the historical evolution of stockholder litigation. Joel teaches a course on stockholder litigation at Penn Law School and Michigan Law School. On how the hostile deals in the 1980s changed the stockholder litigation landscape: "Many of the largest and most sophisticated law firms were suing each other, and that's where most of the law was created."10:50 On the evolution of class action and derivative actions in stockholder litigation.13:01 On the concept of Fraud on the Board. "Commission of fraud on the board is an omnipresent temptation for self-interested controllers, activist stockholders, officers, financial advisors, and their legal counsel. Fraud can be used to put a company in play, steer a sale process toward a favored bidder, suppress the sale price to a controller, or make a favored bid look more attractive."15:56 "Not long ago, over 90% of deals over $100m were sued on, and in most of those cases the stockholders got nothing (prevalence of disclosure settlements)." He advocated for the elimination of disclosure settlements. "In about 2015, the litigation landscape changed." 23:40 On the evolution of Section 220 books and records stockholder demands.26:37 How director oversight duties have evolved ("Caremark claims"). The impact of the Delaware Supreme Court case of Marchand (2019) focused on food safety. 30:12 How Boeing’s stockholders obtained approval from the Delaware Court of Chancery for a landmark US$237.5 million settlement of derivative claims targeting the company’s board for safety failures that led to catastrophic crashes of two 737 MAX jetliners in 2018 and 2019. *The company disclosed that the two crashes caused US$20 billion in non-litigation costs and more than US$2.5 billion in litigation costs.35:16 On private venture-backed company deal-making and litigation, particularly in Silicon Valley. The Good Technology case, where director defendants and their affiliated VC funds settled for $17m and the financial advisor JP Morgan settled for $35 million for claims against  arising out of challenge to dual-track sale/IPO process that resulted in sale of company to BlackBerry Limited.40:24 "It's hard to find plaintiffs [in Silicon Valley], there are different obstacles and roadblocks to litigation."42:38 "In [private venture-backed companies] sometimes you don't have directors who have experience in certain situations, like selling a public company (sophistication of M&A in public settings)."43:48 "What is ubiquitous is financial advisor conflicts of interest, in Silicon Valley or in any other public company scenario." The example of the Good Technology case.45:35 On conflicts of legal counsel in deal-making (criticism of law firm behavior). Example: $690 million damages award based on controller’s reliance on outside counsel’s legal opinion.47:44 The 1-3 books that have greatly influenced his life (that he's re-read the most):The Great Gatsby,  by F. Scott Fitzgerald (1925)The Trial, by Franz Kafka (1925)Books by Professor Philip Reiff (sociologist from the U. of Pennsylvania), such as Fellow Teachers, the Triumph of the Therapeutic, Freud: the Mind of a Moralist.49:08 - Who were your mentors, and what did you learn from them? Philip Reiff, at U. of Pennsylvania.Chancellor William T. Allen.Stuart Shapiro (in litigation).53:04 - Are there any quotes you think of often? In a NYT review of the autobiography of Sammy the Bull Gravano he read a quote that said "At some point you've got to ask yourself, are you going to continue being a punk, or are you going to become a racketeer?"52:40- An unusual habit or an absurd thing that he loves: Twitter. 53:27 - The living person he most admires: Volodymyr Zelensky.Joel Friedlander is a partner at Friedlander & Gorris. He has over 25 years of experience litigating breach of fiduciary duty actions and contract disputes relating to the control of Delaware entities.__ You can follow Evan on social media at:Twitter: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License You can follow Evan on social media at:X: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

0:00 Intro.1:42 Start of interview2:26 Stilpon's "origin story". He grew up in Greece and studied law at the University of Thessaloniki. He later got an LLM at Harvard Law School. He practiced corporate law in Greece, but left the country permanently in the mid 1980s. He joined the OECD where he became the first Head of the Corporate Affairs Division. In that position, he lead the team which produced the OECD Principles of Corporate Governance (1999). "The corporate governance issues were very linked to the privatization issues at the time." He later left the OECD in Paris to London, where he started his own firm.9:36 The origin of his firm Nestor Advisors in 2002. "The idea was to advise companies and their boards on corporate governance matters, since they needed the advice." "The focus initially was on emerging markets, then on OECD markets." Banking is the core sector that they address  ("at least 2/3 of our clients are banks.") "Personally, my two areas of focus are the private family, and the banks."14:15 On the acquisition of Nestor Advisors by Morrow Sodali in 2021. "The sale of Nestor Advisors was always part of my horizon for two reasons: 1) I wanted an exit, and 2) the firm needed to be a part of something bigger in order to go to the next level."18:04 On the debate of the purpose of the corporation (the shareholder vs stakeholder debate). The BRT '19 restatement that reignited the debate in the U.S. (see Marty Lipton vs Bebchuk). "Milton Friedman said that the social responsibility of the corporation was to increase profits, and that is not a purpose (it's a responsibility)." "The first responsibility for a private economic institution like a corporation is indeed to be profitable (if it's not profitable over time, it goes down and it will not achieve any other purpose." "The process for a company outlining its purpose might be a useful thing, for its strategic focus and as a communications tool."24:47 On ESG: "the European approach is different to the US. The latter has more of a market approach with pressure from institutional investors and other market actors, whereas the EU is treating this more as an issue of regulation. There is emerging set of rules that are quite tough, such as with the new directive on disclosure of sustainability, disclosure on how to get to net-zero for investors, EU taxonomy of sustainable activities, the obligation of companies to do due diligence on everything that has to do with sustainability.29:33 On companies withdrawing from Russia due to the conflict in Ukraine. (see Jeffrey Sonnenfeld's list from Yale, over 400 companies have withdrawn at the time of this writing). Example of Raiffeisen Bank (largest foreign bank in Russia).32:36 How in the current environment CEOs have to make more "geopolitical" decisions or deal with "stakeholder issues" that impact society. "They have become mini statesmen or stateswomen." "I am skeptical about whether these kind of decisions should be put on the shoulders of CEOs and boards, at what point will they loose their purpose?" "I have a fear that we are putting an enormous amount of power in the hands of CEOs and corporations because we expect them to become statesmen/stateswomen." "I am reading this in a pessimistic way, it's a weakening of public institutions in the U.S."36:23 How the practice of corporate governance has changed in the last 20 years particularly given the current trends of CEO/boards "managing externalities." ("corporations are not anymore simple economic institutions") [Here is a good WSJ article on this subject].39:10 On governance of private companies and the rise of private markets [in the U.K. and E.U.] The LSE's allowance of dual-class stock to attract new listings.44:46 New board trends highlighted by Stilpon:"After the financial crisis, and for the last 20 years, we have seen boards face more demands to become more intrusive. This has increased particularly in the financial sector." "European boards are loosing the strategy perspective, and I think the pendulum has swung too far. We will start seeing boards act with more reflection in times of radical uncertainty.""The pandemic gave boards the opportunity to review their working methods, now we see more "monochromatic" meetings: small focused seminars/meetings on specific and strategic areas." "I call this the distributed board model."  "You break up the agenda into reflection chunks.""With all the technology changes, boards will be in a position to challenge the assumptions that AI or other data sources will provide."49:12 Stilpon's favorite books :Democracy in America, by Alexis de Tocqueville (1830s) "He did not shy away from finding the worst and the best, and how these two combine - it's amazingly current."Markets and Hierarchies (1975) and The Economic Institutions of Capitalism (1985), by Oliver E. Williamson.On the Road, by Jack Kerouac (1957).51:00 - Who were your mentors, and what did you learn from them? Robert Clark, at Harvard Law School.Ira Millstein, from Weil Gotshal & Manges. "He taught me perseverance."His mother, who was a Professor of Anthropology "she taught me all I know about focusing on the clarity of language."53:04 - Are there any quotes you think of often, or live your life by? From 8th century BC, a pre-Socratic saying: "Pan Metron" "You need measure"From the Rolling Stones: "You can't always get what you want, but if you try sometimes you'll get what you need." "This has been a motto in my life."53:47 - An unusual habit or an absurd thing that he loves: He washes the dishes and pans first thing in the morning. 54:19 - The living person he most admires: Bob Bylan. [Stilpon is a also a musician, and he's recorded 5 albums! Check it out]Stilpon Nestor is the Executive Chairman of Morrow Sodali for EMEA. He is also the Executive Chairman and founder of Nestor Advisors, a company that Morrow Sodali acquired in early 2021. __ You can follow Evan on social media at:Twitter: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License You can follow Evan on social media at:X: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

Intro.(1:35) - Start of interview.(2:19) - Christa's "origin story". She grew up in Dixon, California. She later went to CSU Sacramento and got her MBA at USC.  She started working as a bank teller in college and ended up as the President & CEO of Mechanics Bank in the Bay Area.  They sold the bank in 2015 to a PE firm owned by a Texas billionaire. After that sale, she started joining boards of directors.(3:53) - Her breakdown of banks: large, regional and community banks. At each level there is a significant difference in corporate governance.(5:23) - Her experience joining boards post 2015. She's had 8 board experiences with companies of different sizes and stages of development: from startup, scale-ups, to public companies. She started exploring bitcoin and blockchain technology. She also joined the NACD (Northern CA chapter). The first board she joined was of FIG partners, an investment bank (where she also joined as a partner). They sold the firm to Janney Montgomery Scott in 2019. She then joined the boards of Brainchip Holdings (ASX), Recology, OFG Bancorp, Sasser Family Holdings, Tanimura & Antle and Balco Holdings, Inc (owner of Bay Alarm, Bay Alarm Medical and BALCO Properties).(10:08) - The pros and cons of serving in boards of companies of different sizes and stages of development. Her transition from board member to CEO at Balco Holdings (starting on April 1, 2022). The intricacies of family-owned businesses.(14:08) - What's Balco Holdings and why she's excited about her new CEO role.(17:27) - How she thinks about security in CA, the impact of COVID-19 on how people behave, plus tech and cybersecurity trends.(19:15) - How boards and companies should approach cybersecurity threats: "I think you need the cybersecurity expertise in the C-suite."(22:43) - Her take on the evolution of ESG in the boardroom: "I've helped my boardrooms develop ESG dashboards." "It's going to be very interesting to see what happens in the next few months." "Boardrooms should look at the company's own CPI indexes and costs given the current environment." "A lot of people will have to take a stance of wait-and-see [on ESG] and not overthink it right now."(28:06) - Her take on blockchain technology. Biden's Executive Order on Digital Assets. "SWIFT is so antiquated it needs to go (on how we send wires and ACH)." "It's too early to weigh-in on DAOs, it will continue to morph and evolve."(35:30) - Christa's parting thoughts for directors in the current environment:Directors should be asking about their own company version of their CPI index. Are they tracking what's happening internally?Take measures in case we enter a recession. What's the inventory? Receivables?Hybrid model (office-home). Where do we go from here?(37:57) - Benefits of joining NACD. She's been affiliated with the NACD Northern California chapter since 2015 (she's currently the Vice-Chair of the chapter): "It has been wonderful for me." They have about 1,500 public company directors in their chapter. 50-60 speaking engagements on an annual basis. "Directors of 20 years ago vs. being a director today has dramatically shifted. It's all about staying current and educated." "I encourage directors to become NACD certified directors."(39:23) - Christa's favorite books (applicable to her board work):AI Superpowers: China, Silicon Valley, and the New World Order, by Kai-Fu Lee (2018)Think Again, by Adam Grant (2021)(40:25) - Who were your mentors, and what did you learn from them? In the board context: "the mentors from which I've gained the most wisdom, are the ones that have been there and done that." "I've learned the finesse of how questions are asked and answered." "I've understood the boundaries that exist between directors and operators." "The mentors and people I admire the most are the ones that lead with humility, they have been humbled."(41:45) - Are there any quotes you think of often, or live your life by? "The curse of knowledge is that it closes our minds to what we don’t know." Adam Grant from Think Again. The flipside of that is "if knowledge is power, knowing what we don't know is wisdom."(42:12) - An unusual habit or an absurd thing that she loves: "I wear Uggs slippers all year long."(42:43) - The person she most admires ("relevant right now"): Margaret Thatcher, "I think that the Iron Lady's anti-communism stance right now is alive and well."Christa Steele is the incoming CEO of BALCO Holdings, owner of Bay Alarm, Bay Alarm Medical, and BALCO Properties. She also serves as a public and private company board director.__ You can follow Evan on social media at:Twitter: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License You can follow Evan on social media at:X: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

Intro.(1:35) - Start of interview.(2:22) - David's "origin story". He grew up as an "army brat" including living in Germany for about 10 years. He went to high school in West Point, NY. He stayed to go to college in Buffalo, where he also got his MBA. He left the Army and came to CA, where he ran IT for a company. He eventually went to law school first to Santa Clara, and then to UC Davis.(4:17) - His experience joining Fenwick in 1997, "in the front-end of the dot-com boom getting started." "I learnt a lot in the bubble years, and it was a tremendous advantage to my career to have done that early on."(5:32) - On the origin of Fenwick's Corporate Governance Surveys (published externally starting in 2007). "It was started to provide more than anecdotal advice to clients." The Mercury News published the SV150 List (a list of the largest Silicon Valley companies measured by revenue), and the idea was to compare and contrast that list with the S&P 100 (comprising 100 major blue chip companies across multiple industry groups.)(11:41) - On boardroom diversity: The percentage of women directors is now almost identical for the SV150 (30.3%, up from 25.7% in 2020) and S&P 100 (30.2%, up from 28.7% in 2020). On the impact of institutional investors in this change, SB-826 and AB-979 in CA, and the Nasdaq's diversity rule. "Silicon Valley had been behind in gender diversity. Institutional investor attention was the largest driver of increasing gender diversity on boardrooms."(16:15) - On dual-class share structures. The adoption of dual-class shares has emerged as a recent clear trend among Silicon Valley technology companies (from 2.9% in 2011 to 21.3% in 2021, as opposed to S&P 100 that where it decreased from 9% in 2011 to 8% in 2021). Per Prof. Jay Ritter data, 46.2% of all 2021 tech IPOs had dual class share structures.(23:05) - On the prevalence (and complexities) of dual-class share structures in private companies.(26:43) - On directors getting more than one vote ("disproportionate voting rights amongst directors"). Note DGCL 141(d).(29:17) - The Peloton case and how dual-class shares may impact shareholder activism.(31:46) - On sunset provisions for dual-class shares. "The Council of Institutional Investors' 7-year sunset provision is not convincing, 10-12 years is more convincing due to a variety of factors, including investments in R&D and traditional growth horizons."(35:11) - On staggered (or classified) boards: Over the period from 2004 through 2021 proxy seasons, staggered boards have dropped from around 45% to just 3% in S&P100, while they have increased to 52.1% in SV150 companies. "This is a perfect example of why 'best practices' are not equivalent ("there is no one-size-fits-all") in large cap and smaller cap companies." "This reflects the reality that one of the principal reasons for classification, as a takeover defense, is less compelling for some larger companies due to the sheer size of the companies and relative dispersion of their stockholdings."(39:54) - On majority voting. "The rate of implementation of some form of majority voting among S&P 100 companies has risen from 10% to 96% between the 2004 and 2021 proxy seasons. Among the technology and life sciences companies in the SV 150, the rate has risen from 0% as recently as the 2005 proxy season to 56.3% in the 2021 proxy season." "I don't see a lot of data that says that [majority voting] has much of an impact one way or another." "Zombie directors is a nice soundbite, but it's somewhat of an unfair pejorative."(45:09) - On the "stay private vs. go public" debate. "The relative success of companies that have gone public with dual-class share structures has informed the market of what is more or less acceptable." "There are a variety of choices that can be used to go public." "There is a lot of psychic, morale and social value in going public: it's still part of the dream in Silicon Valley to go public." "Liquid currency is a good thing too, particularly for growth via acquisitions." "I do expect this year 2022 to be a lower year for IPOs... the volatility is very high. See VIX index."(51:47) - David's favorite books:The Discoverers, by Daniel J Boorstin (1983) (and other books by same author)Wonderful Life, by Stephen Jay Gould (1989) (and other books by same author)To Kill a Mockingbird, by Harper Lee (1960)(52:25) - Who were your mentors, and what did you learn from them?Colleagues he's worked with over the years at F&W, including Gordy Davidson, Mark Stevens and Richard Dickson.Clients such as Tram Phi (GC at Docusign) Mike Dillon (longtime GC at Sun)(54:08) - An unusual habit or an absurd thing that he loves: The English Premier League (fan of Tottenham Hotspur F.C.)(56:00) - The living person he most admires? His parents, particularly his mother.David A. Bell is partner at Fenwick and the co-chair of the firm's corporate governance practice.  __ You can follow Evan on social media at:Twitter: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License You can follow Evan on social media at:X: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

Intro.(1:40) - Start of interview.(2:00) - Matt's "origin story". He grew up in San Diego, CA. He's lived in and around New York City for the last 30 years. After college he worked as a consultant (Mercer Consulting) and VC (General Atlantic). In 1995 he joined the executive team of MovieFone, a small cap public company. He helped the company "figure out what the internet was all about." They sold the company to AOL in 1999 (for $388M in stock). Then he started a company called Return Path in 1999. It was a 20-year run where they scaled the company to about $100m in revenue and 500 employees worldwide. They sold the business in 2019 to Validity. In 2020, he founded a new company called Bolster, a marketplace for on-demand executive and board talent. Along the way he wrote a couple of books (Startup CEO in 2013, and Startup CXO in 2021), and he's sat on several boards (such as those of Oblong, Authentic Response, Moz and Feedburner), one major trade association (DMA), some community/academic (local Little League, and a couple of different Princeton fundraising boards). He has been "increasingly spending time on board matters as his career has gone on."(5:50) - On the first edition of the book Startup Boards (2013), by Brad Feld and Mahendra Ramsinghani. Brad and Matt will publish the second edition of the book this June. It takes a fresh look at the topic, with more diverse voices. They added a section for aspiring board members (interested in becoming independent directors).(8:51) - On why he started his new company Bolster, a marketplace for executive and board talent. "About a quarter of our business is focused on running board searches for private venture-backed and public companies (in their first year they did about 30-40 board searches)." They want to "help startup CEOs rethink the way they use and find senior talent."(11:41) - On his focus on increasing the number and diversity of independent directors in venture-backed companies. Bolster's benchmarking study on independent directors in startup boards (based on a study of 250 private company boards):Only 32% of private company boards have independent directors. Half of boards have open independent director seats they expect to fill in the next 12 months.Compared with investor or management directors, independent director seats are 3 times as likely to be held by women. 86% of director seats overall are held by men, and 56% of early stage private company boards have no gender diversity at all.Four out of five seats on private company boards are held by individuals who are White, and 43% of boards are completely homogenous with regard to the race/ethnicity of their directors.CEOs are broadening their searches to diversify their boards. Two-thirds of CEOs are open to bringing on first-time directors, and 41% of independent directors have either some college or an under-graduate degree only (vs. a post-grad degree).Board composition tends to over-index on investors and management directors. 59% of boards have more than one management or founder director and 59% of boards have 2 or more investor directors.Men seem to have a slightly higher average earning potential (measured in basis points per year and grant value) compared to women directors at like companies.(12:40) - "Our Mantra is the 'Rule of Ones' : you should be putting independent directors from day one, private company boards should only have one founder on the board, and for every one investor you should have one independent."(13:59) - On Fred Wilson's Board Diversity Proposal. "Fred walks the walk on that one, as does Brad Feld and Greg Sands." (all 3 VCs are board observers on Bolster's board). "At the end of the day, they all have very meaningful voices in and outside the boardroom, but they have made room for us to bring very good and diverse candidates." [Bolster's board has 4 first-time independent directors.](18:50) - On the impact of record-breaking VC financings, SPACs, IPOs and M&A on startups. "It's put a lot more money and valuation into startups."(19:52) - On his advice to CEOs on how to manage their boards: "The CEO should think of it as having two teams: one team is the executive team, the other is the board." "Start by making sure board composition is right". Scott Weiss: "boards eat whatever you put in front of them." Matt's rule: "No slides in board meetings, it's not a dog and pony show."(23:41) - On virtual board meetings via Zoom or otherwise post-pandemic. "It used to be that boards would have four in-person meetings per year." "In the private company world, VCs are constrained by the number of boards they sit on, but with virtual board meetings their ability to sit on boards has gone up 40-50% [since they don't have to get on planes so much anymore]." Matt's best practice approach: "Once or twice a year the board should meet in-person, and the rest is OK to meet virtually."(26:23) - On ESG in private companies. "This is an area where private companies are ahead." On growth of public benefit corporations (PBCs).(30:03) - On diversity in startup boards. "There is a lot more awareness on the need and benefits for more diversity on boards." "It has to start with the commitment to add one or two independents."(35:43) - On the difference between CEO coaches and mentors: "A coach is someone who helps you be the best version of you. A mentor is someone who has done your job before, knows how to do it cold, has probably done it at your stage and the stage beyond. He/she can help you teach the craft of the job." "Executives need both a coach and mentor, sometimes it's the same person."(37:07) - What makes Bolster different for board searches? "It's faster and cheaper [because we have a curated and qualified marketplace.]"(39:08) - On how the pandemic has changed the geographic distribution of talent.  "People can live anywhere now." "NY has become a crypto talent pool." "I think there is a role for DAOs, but I don't think there will be a mass movement away from traditional corporate structures." "I think leadership matters, and companies would be hard pressed to make hard calls by vote [if you don't think that's true, look at Washington DC]."(41:30) - Matt's favorite books:The Fountainhead, by Ayn Rand (1943)The Goal, by Eli Goldratt (1984) [in business books]The Advantage, by Patrick Lencioni (2012) ["my CEO bible"](42:32) - Who were your mentors, and what did you learn from them?His grandmother "I really learned resilience and grace from her."His dad "I learned perseverance and the importance of having a strong moral compass."(43:33) - Quotes that she thinks of often, or lives her life by: Theodore's Roosevelt "Man in the Arena" speech (1910): ("for me that's the entrepreneurs' quote").(45:05) - An unusual habit or an absurd thing that he loves: Mexican food! "I also love reading American and Presidential history."(46:21) - The living person he most admires? Oprah Winfrey is super interesting and inspiring. Jeff Bezos (innovation gene and perseverance). Jeremy Bloom, CEO of Integrate (the only athlete in history to ski in the Olympics and also be drafted into the NFL).Matt Blumberg is the founder and CEO of Bolster, a marketplace for on-demand executive and board talent. You can follow Matt at the following links:matt@bolster.comwww.linkedin.com/in/blumbergmattwww.startupceo.com (blog)www.twitter.com/mattblumbergwww.bolster.com You can follow Evan on social media at:X: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

Intro.(1:40) - Start of interview.(2:17) - Margaret's "origin story". She grew up in Little Rock, Arkansas. She graduated from college (history major) the year that Bill Clinton ran for President. She took a job in the Bill/Gore '92 campaign. That led to her work in the Clinton White House. It shaped her understanding of how politics and power works. She later went to graduate school to study presidential politics. Her path to studying technology came from President Dwight Eisenhower (involving the domestic economic effects of the cold war). She later worked in VP Gore's office, but not on the technology policy side, rather in empowerment zones, community and regional economic development. "It's very strange to have lived through the history that you're writing about." "The politics of the 1990s is critically important in understanding how we get to the now of the business landscape, globally and in the tech sector in particular."(8:54) - On why she decided to write her book “The Code: Silicon Valley and the Remaking of America.” "This is the book I wish existed in 1999 when I was in graduate school to explain [Silicon Valley], [it's an] explanatory handbook."(12:53) - On the role of the government in supporting the development of Silicon Valley, the "military-industrial-complex", the collective vs the individual, reality v. myth. "[Silicon Valley] is a truly distinctive American story." "What the U.S. has done, particularly since the 1940s when the technology flywheel began, is to enlarge the government in a stealthy way." "The government helped to build the computer, hardware and software industries but giving space for entrepreneurs to be entrepreneurial." "The government threw a lot of money in Silicon Valley's direction, and then got out of the way." "Government contracts were a huge and critical piece of the book of business of technology companies [in the early days], that's the launchpad that threw them into the stratosphere."(18:59) - On the origin story of the "Traitorous Eight", Fairchild Semiconductor, the birth of the semiconductor industry, "Defection Capital" (term coined by Tom Wolfe), Arthur Rock, and venture capital.(28:01) - On Silicon Valley's rise vis-a-vis other regions such as Massachusetts, ("geography was destiny" as told by Anna Lee Saxenian, in her book Regional Advantage, highlighting the organizational/management contrasts between the two regions). "The Bay Area is full of transplants, from the U.S. and around the world." "Immigration policy is part of the secret of Silicon Valley." The  roles of Lockheed Martin and HP in Silicon Valley ("HP did so much to set the tone of Silicon Valley's business culture, in a very deliberate contrast to places like Boston." "Management by walking around, or by wandering around" - rather than sitting around in an office.") "The idea of meritocracy in Silicon Valley comes from that era - it was the place where smart boys who didn't have family wealth or connections came, and they were able to build amazing careers, and in some cases significant fortunes." "Now that openness is not quite as easy."(33:56) - Margaret's take on the use of dual-class share structures by Silicon Valley founders on an historical perspective. "The return of Steve Jobs to Apple [after being fired] cemented the founder narrative, the belief that the "brilliant guys" get displaced [by investors or others] result in companies loosing their innovation." "When hardware got displaced by software, engineering became the product and having extraordinary talent at the top became the priority and a market advantage." The political environment and abundant capital has also played a critical role in setting these terms.(44:05) - Her article "The Secret of Building the Next Silicon Valley" (Wired, Jan 2022). "The next generation of high-tech places will come from investments in people, as well as in technology." "Silicon Valley is no longer merely a place in northern California, it is a global network, a business sensibility, a cultural shorthand, a political hack." "One commonality is that it is not about technology, it's about the people seizing opportunities [such as Fred Terman]." "It's also about an investment in higher education. In the case of UC Berkeley, Californian students were paying $50 per semester in the 60s to study elite level engineering (it was accessible and cheap). It was an escalator of upper mobility [although at the time it was mostly white men.]" "Steve Jobs went to a public school in Silicon Valley in the late 60s that had a computer lab [Steve Jobs' dad did not graduate high school]."(49:00) - On the rise of U.S. regional hubs ("the geography of tech"), and the geopolitical tensions with China.(55:37) - Margaret's favorite books:In the Shadow of the Poorhouse, by Michael B. Katz (1986)The Power Broker, by Robert Caro (1974)(57:44) - Who were your mentors, and what did you learn from them?Michael B. Katz (her graduate advisor).Bosses in the Clinton Administration.(59:22) - Quotes that she thinks of often, or lives her life by: "The days are long, the years are short."(59:33) - An unusual habit or an absurd thing that she loves: watching TikToks with her daughters.(1:00:36) - The living person she most admires? Her students at UW. Having their college careers upended by the pandemic is no treat. She admires their resiliency. She's bullish on GenZ.Margaret O’Mara is the Howard & Frances Keller Endowed Professor of History at the University of Washington. She writes and teaches about the growth of the high-tech economy, the history of U.S. politics, and the connections between the two.You can follow Margaret at the following links:Twitter @margaretomaraLinkedIn https://www.linkedin.com/in/margaretomara/Instagram @margaretomaraWebsite https://www.margaretomara.com__ You can follow Evan on social media at:Twitter @evanepsteinLinkedIn https://www.linkedin.com/in/epsteinevan/ Substack https://evanepstein.substack.com/Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License You can follow Evan on social media at:X: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

Intro.(2:10) - Start of interview.(2:57) - David's "origin story". He grew up in coal mining town in southern Illinois. He went to college at what is now known as the Missouri University of Science & Technology. He later worked as an engineer and got his PhD in accounting from the U. of Kansas. He was a Professor at Kellogg for about 7 years, at Wharton for about 20 years and he's been a Professor at Stanford's Graduate School of Business since 2005. On how he started working with Brian on corporate governance research through the Corporate Governance Research Initiative.(4:23) - Brian's origin story. He grew up in Menlo Park, went to Princeton for his undergrad, and Stanford for his MBA. Prior to Stanford, he worked as a financial analyst at Stanford University's Office of the CEO and as an investment associate at UBS Private Wealth Management. On how he got matched with David Larcker to launch the corporate governance research initiative.(7:16) - On collaborating with Stanford law school on corporate governance research through the Rock Center for corporate governance.(9:30) - On their book "Corporate Governance Matters." First published in 2011, second edition in 2015 and third edition in 2020.(13:44) - About the origin and structure of the Corporate Governance Research Initiative, which includes a long list of (free) research findings and materials, including their Closer Look Series, Quick Guides & Research Spotlights, Core Concepts, Surveys, Journal Articles, Working Papers, Case Studies and a Glossary of Terms.(17:00) - On their latest article "The Seven Myths of ESG"(18:01) - Myth #1: We agree on the purpose of ESG.(22:52) - Myth #2: ESG is value increasing. ["The evidence is extremely mixed." "We do not know the financial impact of ESG."](26:46) - Myth #3: We can't tell whether a claimed ESG activity is actually ESG. [the extreme version is "greenwashing."](30:16) - Myth #4: A company’s ESG agenda is well-defined and board-driven.(34:49) - Myth #5: G (Governance) belongs in ESG.(38:09) - Myth #6: ESG ratings accurately measure ESG quality.(43:52) - Myth #7: Mandatory disclosure will solve the problem.(48:25) - On tying executive compensation with ESG metrics. "There is not as much as you would think (and it's mostly tied to the annual bonus)."(53:13) - Brian's favorite books:The Bible.U.S. history, from the founding to the late 1800s.(53:56) - David's favorite books:The Bible.Biographies of rock starts and the Grateful Dead.(54:24) - Who were your mentors, and what did you learn from them? For Brian: David Larcker. For David: his father. Also Nick Donatiello.(55:40) - Quotes that you think of often, or live your life by. For Brian: "My dad has always taught me to keep my head on straight and I just kinda go that way." For David: "No matter how smart you think you are, there is going to be someone smarter that will come around" (stay humble).(55:41) - What is an unusual habit or an absurd thing that you love? for David, motorcycles. He rides his Harley.(57:56) - The living person you most admire? Brian: Charlie Munger. David: Elon Musk ("pretty interesting character"), plus Brian!David Larcker is James Irvin Miller Professor of Accounting at the Graduate School of Business of Stanford University; Director of the Corporate Governance Research Program; Senior Faculty, Arthur and Toni Rembe Rock Center for Corporate Governance. His research focuses on executive compensation, corporate governance, and managerial accounting, examining the choice of performance measures and compensation contracts in organizations. His current research projects address the valuation implications of corporate governance, the impact of proxy advisory firms on shareholder proxy voting, and modeling the cost of executive stock options.Brian Tayan is a member of the Corporate Governance Research Program at the Stanford Graduate School of Business. He has written broadly on the subject of corporate governance, including boards of directors, succession planning, executive compensation, financial accounting, and shareholder relations. Previously, he worked as a financial analyst at Stanford University's Office of the CEO and as an investment associate at UBS Private Wealth Management. He has actively managed a private investment partnership since 2006, specializing in long-term, conservative growth through equity investments. Tayan received his MBA from the Stanford Graduate School of Business and his BA from Princeton University.If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media.  You can follow Evan on social media at:X: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

Intro.(1:40) - Start of interview.(2:34) - Dan's "origin story". He grew up in southern California, did his undergrad at Stanford where he studied international relations. This prompted his quest to do something "cross-border." He did an exchange program in his junior year to Santiago, Chile, where he met his now wife and that planted a seed to do something related to Latin America. After law school he went to London where he practiced with Allen & Overy for 4.5 years. In 2004 he came back to Silicon Valley to practice as a corporate associate at WSGR, where he spent 6 years. At that time, there was not much cross-border work with Latin America, although there were partners focused on China, Israel and India, so the international blueprint was there to start building bridges between Silicon Valley and Latin America. Since then, he has developed his practice (passing through Goodwin Procter and Greenberg Traurig) and now at Gunderson Dettmer where about 80% of his practice is focused on Latin America.(5:53) - Dan's description of Gunderson's Latin America practice: "Fundamentally, we're transactional lawyers that do international cross-border work." Their focus is on venture-backed technology-driven, high growth companies.(10:21) - Why he advises his clients to incorporate in the Cayman Islands. "When we advise clients on a choice of a holding company, it comes down to a mix of investor preferences, tax considerations and administrative aspects." For Latin American companies, there are now three preferred choices: Delaware C-corp, a Cayman Islands company or a UK company. Kaszek Ventures was an early advocate for using a Cayman holding company. "I think we're going to see those 3 structures prevail in the market." Three prominent examples with Cayman holding structures: Nubank (the Brazilian neobank that recently IPOed in the US), Cornershop (a Chilean grocery delivery company that was acquired by Uber) and Kavak (a Mexican used-car online marketplace).(17:26) - On the geopolitical tensions between the US and China, and its implications for the startup ecosystem in Latin America. On the rising investments from China in Latin America and the increasing role and scope of the Committee of Foreign Investment in the US (CFIUS) impacting transactions in the US.(20:39) - On the increasing antitrust pressure from local regulators in Latin America. The example of Cornershop in Mexico and Chile.(23:19) - Dan's overview of entrepreneurship in Latin America. "Brazil is by far the most important market, followed by quite a distant second place from Mexico. Those two markets by themselves dominate the region in terms of capital deployed, number of deals, exits activity, etc." 2021 was a record year for venture activity in the region [$15bn in venture investments]. What's driving this growth? A combination of factors, per Dan: "The pandemic accelerated many changes, all of it boosted by widespread broadband adoption, digitally native people, younger generations, generational shifts in family businesses with decision-makers in their 40s or 30s and a vast under-banked and under-served population." There is also a virtuous cycle with big investors such as Softbank investing in the region ($8bn in two funds focused in Latin America) and other late-stage investors that have increased the cadence and velocity of investments such as Tiger Global. On the corporate governance implications of these investments.(30:22) - On the changing landscape of venture funding  in Latin America: "There is a much richer ecosystem of investors in Latin America, with stronger local investors." The rounds are getting bigger and investments are done at a faster pace. "But the markets will always be cyclical." His take on dual-class shares and other governance structures. "There will be down-rounds or re-caps if we go on down cycles, and these questions may play out in the next decade. We are still in an incipient stage of corporate governance in the region."(39:13) - On SPACs, and how they can impact exit strategies for Latin American companies. "I'm somewhat cautionary and skeptical of this structure, generally." "It doesn't really save that much time, nor much cost." [See Prof. Klausner's latest research on SPACs.](44:20) - On the role of directors, and diversity on boards. What's the status in Latin America? "It's slowly percolating down in Latin America." "Some of the investors are pushing some ESG standards in their investments, but not so much on gender diversity."(48:28) - On the positive impact in the increase of equity compensation and stock options in Latin American startups ("from top to bottom"). This is a sort of "democracy within the cap table." This is a trend that is starting to become more prevalent in the region.(52:15) - Dan favorite books:Outliers, by Malcolm Gladwell (2008)Historical novels and intrigue, such as Red Notice by Bill Browder (2015)(53:27) - Who were your mentors, and what did you learn from them?Steve Bochner (WSGR)(54:36) - Quotes that he thinks of often, or lives his life by:"You have brains in your head. You have feet in your shoes. You can steer yourself any direction you choose." Dr. Seuss.(55:41) - An unusual habit that he loves: He likes to collect scorecards from golf courses, he's been doing it since childhood.(57:56) - The living person he most admires: Barack Obama.Dan Green is a Partner and Co-Chair of the Latin America Practice for Gunderson Dettmer, a prominent international law firm headquartered in Silicon Valley. If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media. __ You can follow Evan on social media at:Twitter @evanepsteinLinkedIn https://www.linkedin.com/in/epsteinevan/ Substack https://evanepstein.substack.com/Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License  You can follow Evan on social media at:X: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License