Boardroom Governance with Evan Epstein

Intro.(1:22) - Start of interview(2:23) - Amy's "origin story"(3:41) - Her time as a journalist at Businessweek (US, UK and Japan).(5:02) - Her return to the US in 1990, where her last beat was to cover the SEC and corporate governance (including corporate scandals from the early 2000s and SOX).(6:32) -  Her start at the Council of Institutional Investors in 2006.(7:52) - The history of CII, founded in 1985 "at a time of corporate takeovers, imperial CEOs and insulated boards of directors."(9:23) - The three founding principles of CII:Investors benefit when corporate boards provide robust and effective oversight of management (directors are accountable to shareowners);Investors are more powerful when they speak with one voice; andInvestors are not monolithic so CII focuses on "big tent issues" where there is consensus.(10:31) - Members of CII: asset owners, asset managers and other investors - combined AUM: $40T.(12:31) - The evolution of governance since SOX in 2002. "When I joined CII, corporate governance was kind of a backwater." "Since then it has gone mainstream."(15:01) - Her take on BRT's purpose of the corporation restatement (2019) and CII's response letter. "At the end of the day, the north star for public companies is driving sustainable long term shareholder value."(22:14) - Her take on how Say-on-Pay was a catalyst for more engagement between companies & shareholders.(24:06) - The evolution of engagement by CII: it used to be done directly, now not so much because CII members are engaging directly.(26:15) - Her take on ESG. "We focus primarily on the G." "We think that strong governance standards and practices are the linchpin for appropriate attention to the E and the S issues." "We put governance first."CII's Special Reports and Publications.CII's Education Initiatives.(30:03) - "CII's policies on board diversity have always adopted a broad view of diversity including background, experience, age, gender, ethnicity and culture." "It's a bulwark against clubbiness, against having blinders on." "We believe diverse boards can be achieved without quotas."(32:44) - CII's policies on  dual class stock. "We've evolved into a compromise position [with sunset provisions]." "If you want to stay private fine, but if you want to tap the public markets you need to treat your public shareholders appropriately - there is a certain baseline expectation." "We have an international race to the bottom with London, HK, Singapore, etc allowing dual class share listings."(42:03) - CII's advocacy priorities for 2021:Investors rights and protections:Independent proxy research. CII's amicus brief in support of ISS lawsuit against the SEC.CII is opposed to SEC's Rule to Limit Shareholder Proposals (Amend Rule 14a-8)Sunset Provisions for Dual Class Shares.Clawbacks for executive compensation.Corporate disclosure:Climate change risk disclosure.Board diversity.Human capital disclosure.Political spending disclosure.Market systems and structures:Abuse of 10b5-1 Plans.Share buybacks: there should be stronger disclosures.End-to-end vote confirmation.Universal proxies in contested elections.High frequency tradingStock exchanges(48:06) - Her take on the GameStop saga, "the real danger there is that it undercuts public confidence and integrity of the markets, and that is not good. It's long term problem."(50:02) - Some of her favorite books:A Gentleman in Moscow, by Amor Towles (2016)Alexander Hamilton, by Ron Chernow (2005)Leadership: In Turbulent Times, by Doris Kearns Goodwin (2018)On corporate governance:Bad Blood, by John Carreyrou (2020)Too Big to Fail, by Andrew Ross Sorkin (2010)(52:25) - Her mentors (in addition to her father):Ann Yerger (former Exec Dir of CII)Ken Bertsch (former Exec Dir of CII)(54:31) - Her favorite (current) quotes:"Be curious not judgmental" (Walt Whitman)"To whom much is given, much will be required."(56:30) - Her "unusual habit": she loves architecture and city/urban planning.Amy Borrus became executive director of the Council of Institutional Investors (CII) in July 2020. She joined CII in 2006 as deputy director, and was interim executive director in 2015-2016. She serves on the boards of the CII Research and Education Fund and the Sinai Assisted Housing Foundation. She also serves on the Best Practice Principles Oversight Committee, which will monitor principles underpinning services of leading proxy advisory firms. Prior to CII, she was a correspondent for Businessweek magazine for more than 20 years. Her journalism career included multi-year assignments in London, Tokyo and Washington, D.C. She earned an MSc. in International Relations from the London School of Economics and a B.A. in History and English from the University of PennsylvaniaIf you like this show, please consider subscribing, leaving a review or sharing this podcast on social media. __Follow Evan on:Twitter @evanepsteinSubstack 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.(1:16) - Start of interview(2:04) - Nichol's "origin story"(3:48) - Her beginnings with Glass Lewis & Co. in 2004.(4:32) -  What is the proxy advisory business? What was the origin of Glass Lewis? Founded by Greg Taxin and Kevin Cameron in 2003.(7:17) - The evolution of the proxy advisory business. "Now we've become more of a trusted partner to institutional investors to navigate all [the corporate governance] issues."(7:51) - The proxy voting management platform "Viewpoint".(9:51) - Proxy research at Glass Lewis: 28,000 research reports on public companies in 100 global markets.(14:06) - Proxy advisory landscape in the U.S. and internationally. The Best Practice Principles Group (2013).(16:21) - The evolution of engagement with issuers ("Glass Lewis has about 1,500 engagements per year with issuers, across 40 countries in 20+ languages"). There are free and paid engagements.(22:00) - The regulatory landscape of proxy advisors. Heightened focus in last 5 years, and new regulations were passed in 2020 from the SEC and DoL.(29:32) - Current ownership of Glass Lewis: Ontario Teachers Pension Fund (80%) and Alberta Investment Management Corporation (20%).(32:14) - How they set their corporate governance principles and policy guidelines. They follow what matters to institutional investors (their clients). They also have a research advisory council from industry (that meets once a year). They look at regulations in different markets.(35:08) - Glass Lewis boardroom diversity efforts: starting in this proxy season they will be rating the level of disclosure on boardroom diversity.(38:15) - On corporate purpose. Stakeholder capitalism.(39:46) - On ESG and sustainability activism. "People [and institutional investors] are more aware."(41:17) - On shareholder activism.(43:25) - Her recommendations to US public company directors:Be engaged.Know your shareholder base.Have a plan.In terms of proxy advisors: stop viewing them as a threat. She encourages directors to engage with Glass Lewis, in its capacity as a trusted advisor to institutional investors. "Use us as a way to connect with investors."(45:00) - Prediction on regulatory changes with new incoming Administration in the US, Canada, India, EU, etc.(46:30) - Her favorite books:Distant Neighbors, by Alan Riding (1984)Give and Take, by Adam Grant (2013)(48:00) - Her mentors:Jorge Robles (Lawyer in Mexico)KT Rabin (ex CEO of Glass Lewis).(49:21) - Her favorite quote: "Don't put off until tomorrow what you can do today." (Benjamin Franklin)(49:51) - Her "unusual habit": Singing.(50:49) - The living person she most admires: Lots of women, including Kamala Harris, Nancy Pelosi and Michelle Obama. But the person she admires is her father.Nichol Garzon-Mitchell is a Senior Vice President and the General Counsel at Glass Lewis, one of the leading proxy advisory firms in the world. Glass Lewis has over 1,300 clients, including the majority of the world’s largest pension plans, mutual funds and asset managers, who collectively manage more than $40 trillion in assets.If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media. __Follow Evan on:Twitter @evanepsteinSubstack 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 of episode.(1:18) - Start of interview(1:52) - Aeisha's "origin story"(2:31) - Her beginnings with  Salomon Smith Barney and Morgan Stanley in the "dot com" era.(3:40) -  Her corporate governance beginnings with CalPERS.(6:50) - How pension funds manage their proxy voting and stewardship. At CalSTRS they manage 9,000+ equities. Role of Proxy Advisors: they help triage proxy voting, allowing to focus on the most relevant issues.(9:17) - She would like to see more competition in the proxy advisory market (ISS and Glass Lewis). She would like to see as many inputs as possible (most informed decision).(10:39) - On growth of corporate governance groups at CalSTRS (~15 people, "we call it our beehive") and CalPERS.(11:26) - On structure of corporate governance group at CalSTRS: Sustainable investment and stewardship  strategies group ("SISS" team). Out of $285 billion of CalSTRS, the SISS team manages ~$8B in a portfolio of public equities (three basic strategies: 1) Passive around a low carbon index, 2) Activist managers, 3) Sustainability focus managers). They want to expand this strategy to private markets. They also have a team that works on strategic relations teams.(14:50) - On her role as a board member of Golden 1 Credit Union.(18:09) - History and focus of CalSTRS: $285B of assets under management. ~975,000 beneficiaries.(21:21) - Stewardship and engagement tools of CalSTRS, "The tools have grown over the last 15 years": 1) Proxy voting, 2) Private engagements, 3) Shareholder proposals, 4) Collaborative engagements (ie. Climate Action 100+, Human Capital Management Coalition, etc), 5) Public engagements.(23:27) - The CalSTRS' "Activist Stewardship" Model. This new form of stewardship is "one more tool in our tool chest"... "to be used in very limited circumstances". One of the first examples: the ExxonMobil campaign (with Engine No.1 and D.E.Shaw Group). "It's not about the size of investment, it's about credibility of the argument"(29:02) - The value of engagements. On number of CalSTRS' shareholder proposals (down significantly, from 25-50 per year to 3-4 per year) and private interactions with companies. They have a variety of initiatives:Diversity efforts.Climate Action.Human capital management.Pandemic Resilient 50.(34:53) - CalSTRS boardroom diversity efforts. The  Diverse Director DataSource (3D) (now transitioned to Equilar). Her thoughts on CA's SB-826 and AB-979.(37:57) - CalSTRS' ESG Focus. They want to expand the sustainability investment approach to private assets including infrastructure, PE and real estate.(41:36) - On CalSTRS' Corporate Governance Principles. "I like to think that at CalSTRS we are progressive in terms of our principles." Independence first and foremost. On Chair/CEO role and overboarding. "There are some issues that we are unwilling to waiver."(48:25) - On corporate purpose.(50:18) - Her favorite books:Freakonomics, by Steven Levitt and Stephen Dubbner (2005)Life in Motion, by Misty Copeland (2014)(51:16) - Her mentors (her father). Professionally:Ted White (former head of corporate governance at CalPERS)Anne Sheehan (former director of corporate governance at CalSTRS)(52:55) - Her favorite quote: "If you can’t explain it to a six-year-old, you probably don’t understand it yourself." (Albert Einstein).(53:48) - Her "unusual habit": anything to do with dance.(46:35) - Her parting thoughts to directors: "Remember who you're representing when you're sitting inside that boardroom. You're there to represent the interest of a broad shareholder group and your responsibility to them is to ensure a risk-adjusted return (considering all long term ESG risks, doing it in a responsible and ethical manner)."Aeisha Mastagni is a Portfolio Manager in the Sustainable Investment & Stewardship Strategies Unit at the California State Teachers’ Retirement System (CalSTRS), the second largest public pension fund in the United States with $285 billion dollars in assets under management. Aeisha also serves as a director of Golden 1 Credit Union, California's leading credit union and one of the largest in the United States with over 1 million members and assets over $16 billion.If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media. __Follow Evan on:Twitter @evanepsteinSubstack 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

(1:35) - Start of interview(2:23) - Peggy's "origin story"(3:04) - Her experience at Notre Dame (BA and JD)(4:17) - Her progression from Wall St. law firm work to Mellon Bank, JP Morgan, Pfizer, Sara Lee and Prudential.(6:17) -  Dennis Weatherstone (former CEO of JP Morgan) as a catalyst of #corpgov at the bank in the mid-90s.(7:00) - Her move to Pfizer, drawn by Terry Gallagher and Bill Steer focus on #corpgov (pre SOX 2002)(7:50) - The focus on governance in late 1990s - Peter Clapman at TIAA CREF and other institutional investors.(9:31) - On that first meeting of Pfizer's board leaders with institutional investors in 2007 (Marty Lipton referred to it as "another example of corporate governance run amuck").(10:51) - On the role of a Chief Governance Officer.(12:31) - Her transition to serving on boards (previously with the MONY Ground, MONY Life Insurance Company and Occidental Petroleum Corporation. Currently with the Orion Group Holdings).(16:36) - On the history and focus of Prudential Financial. "It's a company with a purpose, 146 years old, with an incredible partnership and commitment to Newark, NJ."(19:18) - Her take on the purpose of the corporation and the new BRT statement (2019). "It's nothing new, it was the same at Pfizer, it's a balance."(23:45) - Her take on b-corps, benefit corporations and public benefit corporations. "We just don't have a robust law and precedent, yet"(25:05) - Managing the "tone from the top" at the board level. "The culture is ingrained at Prudential."(28:00) - Her take on ESG. "I think it's always been there." Now it's just gone mainstream. On the environmental side, people like Tim Smith (Boston Trust Walden) and institutions such as CERES have been active for decades on these topics.(29:23) - On board diversity. "It's really more important to have broader diversity than just gender." This has gone mainstream too.(33:13) - Her take on climate change and sustainability.(35:07) - Her take on board education. "It depends: you need a tool box. For some boards it could be writing a memo, for other boards it's inviting outside expertise, and for others it's one of their own who has a specific background." More boards are adding experts in sustainability.(39:52) - Her thoughts on blockchain technology in corporate governance.(40:44) - Her recommendation to directors on shareholder activism. "You have to be your own activists." Duty to ask for questions, alternatives and seek long term value. "You're not there for the pastries."(43:00) - Her favorite books:The Bible.To Kill a Mockingbird, by Harper Lee (1960).Winesberg, Ohio, by Sherwood Anderson (1919)(43:59) - Her mentors (starting out all family members, her father). Professionally:Dennis Weatherstone  (ex CEO JP Morgan)Bill Steer (ex CEO Pfizer), David Shedlarz (ex CFO Pfizer), Karen Katen  (ex Vice Chair Pfizer)Jane Pfeiffer (from her first board at MONY)(45:33) - Her favorite quote: "Speak the truth but leave quickly"(46:81) - Her "unusual habit": cleaning.(46:35) - The living person she most admires: she looks at people's character.Sarah Teslik (Partner, Joele Frank)Elise Walter (ex Chair of the SEC, and director of Occidental Petroleum Corporation)Peggy Foran is the Chief Governance Officer, SVP and Corporate Secretary of Prudential Financial. Peggy has been a corporate governance leader throughout her career at Sara Lee Corporation, Pfizer and JP Morgan. She also serves as a director of Orion Group Holdings, and previously served on the boards of Occidental Petroleum Corporation, The MONY Group, and MONY Life Insurance Company. She currently serves as an active member of many influential advisory boards including the Council of Institutional Investors, the American College of Governance Counsel, the American Bar Association, Catalyst, the Weinberg Center for Corporate Governance, NACD, the Center for Audit Quality (CAQ), the International Integrated Reporting Council, ICGN, and the Society for Corporate Governance.If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media. __Follow Evan on:Twitter @evanepsteinSubstack 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

(1:50) - Start of interview(2:23) - Sukhinder's "origin story"(2:58) - Her start in Silicon Valley in 1997. She characterizes her career as "always building".Junglee - Amazon ('98-99)Yodlee ('99-'03)Google ('03-'09)Accel-Polyvore ('10)Joyus ('11-'17)TheBoardlist ('15-present)Stubhub ('18-'20)(6:50) -  Her boardroom experience (J Crew Group, StichFix, TripAdvisor, Ericsson, Urban Outfitters, Upstart...). "Your job is one of influence, and one of bringing specialization - in my case I brought e-commerce and digital [to my first board]." "Boardrooms are increasingly open to the idea of non-CEO specialists - allowing the possibility to bring more modern and diverse skill-sets into the boardroom."(9:35) - The boardroom diversity problem, and why she founded TheBoardlist in 2015.Bring more equity to the table.Bring all the talent to boardrooms.(11:50) - Why diversity is a bigger problem in private (venture-backed) companies than in public companies.(13:40) - The evolution of TheBoardlist since 2015. Started as a crowdsourced list of people who could serve on boards, first tapping a group of 30 executives/founders/entrepreneurs such as Reid Hoffman, Michael Dearing and Joanne Bradford - resulting in 600 names added in an excel spreadsheet and a very simple website. Today TheBoardlist has about 17,000-18,000 members, divided in the following categories:Nominated director candidates.NominatorsCompanies that are searching for board members.(16:29) - Since then, there have been ~2,000 board searches in TheBoardList.  There has been a 4x increase in board searches since the MeToo and BLM cultural crisis. 75% of board searches are for private companies, 25% for public companies. Within the private companies: equally divided between early, mid and late stage. It's a "discovery platform" (curated list with recommended board candidates) it's not a "placement platform."(19:09) - Her take on the evolution of venture-backed company boards (and independent directors). "Often the independent board seat goes unfilled after the Series A or B."(22:28) - Choosing between a private and public company board position. "People want the experience they don't have in their day job." (board allows not only to contribute, but also to learn). Her advice to founders: "Often, you might be able rent unto the board the experience you can't afford to hire yet as a day job." You can craft a board seat for 1 or 2 years.(26:06) - Attracting more experienced directors to startup boards (as chairs or lead independent directors). Distinction with coaches. CEO reviews. "Every team needs a coach."(31:24) - Her take on SB-826 and AB-979 (California board diversity laws). "SB-826 has moved the needle." "Tokenism is about how you treat somebody once they get there."(35:25) - "The one thing that we need and that is missing is a conversation about board terms." Board Refreshment is critical for board diversity.(36:27) - Her take on dual-class share structures and other control structures.(39:46) - Her take on the shareholder primacy vs stakeholder debate. "Customer activism and employee activism are real and enduring trends."(43:41) - Her take on shareholder activism. Conflict between short term results vs long term strategy. "Directors need more courage than ever before." "You need to be both hopeful and paranoid as a director (and willing to put in the work) to help create a company with that bifocal lens."As a board member, you have to be really attuned to this issue because  there are proven financial returns to activists.It forces companies to confront issues that they would otherwise not confront in a reasonable time frame.(47:17) - Her favorite books:Good to Great, by Jim Collins (2001)Strategy Beyond the Hockey Stick, McKinsey & Company (2018)The Seat of the Soul, by Gary Zukav (1989)(48:48) - Her mentors (her dad was her absolute mentor). Group of mentors in Silicon Valley including founders of Junglee, Omid Kordestani (Google), different board members.(50:49) - Her favorite quote: "You don't know if you don't try"(51:00) - Her "unusual habit": shopping, knitting.(51:38) - The living person she most admires: her Sikh spiritual leader.(53:14) - Her parting thoughts for directors.Ms. Singh Cassidy is currently the Founder and Chairman of theBoardlist, and most recently served as the President of StubHub Inc, the leading global consumer ticketing marketplace for live entertainment. In February 2020, StubHub was acquired by Viagogo for $4bn, in a transaction led by Sukhinder and her team. She is currently a director of Upstart and Urban Outfitters. Ms. Singh Cassidy previously served on the board of Tripadvisor and Ericsson until 2018. Ms. Singh Cassidy holds a B.A. in Business Administration from the Ivey Business School at Western University.__Follow Evan on Twitter @evanepsteinMusic/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

(1:40) - Start of interview(2:38) - David's "origin story"(4:49) - The founding of Equilar in 2000.The modern "corporate governance" era started after the corporate scandals of the early 2000s (Enron, Tyco, Adelphia, WorldCom, etc.) and the passage of SOX in 2002. "Very few people talked about corporate governance in the 1990s"With this new focus on corporate governance, there was a lot of attention given to exec comp.(9:56) -  The Board's role in setting compensation for the CEO: "It's a very tricky decision, and there is no right answer." "Compensation is a very emotional and difficult decision, with many different stakeholders involved." (11:33) - Their work on the investors' side (Calpers, Vanguard, Blackrock, etc).(12:11) -  They made a conscious decision from day one to track the trajectories of executives and directors from SEC data, which has resulted in the development of their BoardEdge Product.(13:59) - His take on Say on Pay regulation: it increased significantly the amount of shareholder engagement.(17:05) - His take on Elon Musk's ~$55bn comp package at Tesla and other 100% at-risk performance awards. (19:33) - The Nasdaq-Equilar Strategic Partnership on boardroom diversity (announced on Dec 9, 2020).Distinctions with CA laws SB-826 and AB-979.Equilar's BoardEdge product includes one million executives and directors.Equilar's Diversity Network (36 Partner Institutions, 5,158 Member Profiles, 2,044 board appointments) "Registry of registries"      (30:53) - The challenge of meeting the new boardroom diversity requirements set by SB-826, AB-979 and Nasdaq. "There is a need for more candidates who are not on boards." "The demand will go up exponentially in the next 12-24 months, and Equilar is working to help on the supply side."(32:27) - The latest trends on director compensation, and impact of COVID-19 on boards (Stanford/Equilar study).(35:09) - His take on the current state of private and public capital markets (the "window is wide open for going public, but when the market shuts down - it will shut down hard")(37:03) - His thoughts on the latest trend of companies and executives leaving SF/Bay Area/CA to TX, FL, etc.(39:30) - His take on the stakeholder vs shareholder debate as a CEO and executive compensation expert.(42:04) - His favorite books:The Hard Things About Hard Things, by Ben Horowitz (2014)Measure What Matters  How Google, Bono, and the Gates Foundation Rock the World with OKRs, by John Doerr (2018)(43:11) - His mentors (his dad, and his best friend's dad in high school).(44:30) - His favorite quote: "Skate to where the puck is going to be, not where it is today" (Wayne Gretsky)(45:42) - His "unusual habit": a classic multitasker.(47:00) - The living person he most admires: Warren Buffett.(48:00) - His final thought on where the puck is going on governance: boardroom diversity beyond public companies: private companies, PE, VC, non-profits, etc. Human capital metrics will become increasingly more relevant. David Chun is the founder & CEO of Equilar, a Silicon Valley based leading provider of corporate leadership data solutions. Companies of all sizes rely on Equilar for business development, recruiting, executive compensation and shareholder engagement, including 70% of the Fortune 500 and institutional investors representing over $20 trillion in assets.In addition, David is a Trustee of the Committee for Economic Development (CED) and serves on the boards of the Silicon Valley Leadership Group (SVLG) and the Asian Pacific Fund Community Foundation of San Francisco. He is on Catalyst’s Women on Board Advisory Council, the Silicon Valley Advisory Council of the Commonwealth Club of California, the Women on Boards Advisory Council of the California Partners Project and the Advisory Council of the Angel Island Immigration Station Foundation.David is a also a member of the Young Presidents’ Organization (YPO), Past Chair of the SF Bay Chapter, a founding member of the Council of Korean Americans (CKA) and a former advisory board member of the Wharton Center for Entrepreneurship.__Follow Evan on Twitter @evanepsteinMusic/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

(1:40) - Start of interview(2:10) - David's "origin story"(3:44) - His start with Wilson Sonsini in 1989.(6:11) -  His experience serving as a board member, and why he thinks corporate America has lost out on having lawyers as directors. His for corporate boards have included California Culinary Academy, and currently LTSE.(7:41) -  His take on the Long Term Stock Exchange.(9:47) - His thoughts on why companies should list on the LTSE ("the market is wide open").(11:03) - His take and role as an Advisor to the American Law Institute's Restatement of Corporate Governance.(13:22) - His take on the Business Roundtable Restatement of the Purpose of the Corporation (2019) (14:05) - Some historical context for purpose of corporation debate (stakeholders vs stockholder primacy).(16:49) - His advocacy in favor of dual-class stock.(20:27) - His dislike of time-based sunset provisions, as proposed by CII ("one-size-fits-all sunset provision").(24:42) - His take on distinguishing dual-class stock and a listing on the LTSE.(25:55) - His view on tenure-voting.(28:52) - His take on duties of directors in VC-backed companies in conflicted situations, since the Trados case.(32:14) - The governance risks that he sees with the emergence of SPACs in 2020.(34:53) - His take on the soaring stock market and the current tech boom.(36:34) - His thoughts on WFH after pandemic and how it has impacted law firms and other sectors.(37:47) - His take on shareholder activism this year, and what's next (activity will pick up in spring 2021). His advice for companies and boards is to think about long term plans:Economic message: growth plan for the long term must be communicated early and often to stockholders.Governance message: focus on diversity at all levels, especially at the board level.Public message: stakeholder and ESG concerns.(44:06) - His take on California's SB-876 and AB-979 laws and the future of boardroom diversity.(46:49) - Next big issues for boards and directors:GlobalizationMeasuring externalities (such as carbon emissions).(48:18) - His favorite books:The Invisible Man, by Ralph Ellison (1952)In Search of Lost Time, by Marcel Proust (1913-1927)The Diary of Anne Frank, by Anne Frank (1947)Zen and the Art of Motorcycle Maintenance, by Robert Pirsig (1974)(49:34) - Some of his mentors:Wallace Fowlie (at Duke).Bruce Payne (Ethics)Larry Sonsini (WSGR)(50:59) - His favorite quote:"Some men see things as they are, and ask why. I dream of things that never were, and ask why not" by Bobby Kennedy.(51:27) - His "unusual habit" that he loves the most:Elephants. His true passion is wildlife conservation.(53:51) - The living people he most admires:Jane GoodallIain Douglas HamiltonDavid Berger specializes in corporate governance and M&A litigation as well as rapid response shareholder activism and corporate governance risk oversight. David’s practice is an unusual blend of corporate governance advisory work and litigation, and he is nationally recognized for his expertise in both the boardroom and the courtroom. David also represents directors and companies in internal investigations and public companies on disclosure and SEC proceedings.Follow Evan on Twitter @evanepsteinMusic/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

(1:27) - Start of interview(2:59) - Yumi's "origin story"(4:18) - Her start with Barclay's Global Investors (which was later acquired by BlackRock).(4:50) -  The lessons she learned working for the Stewardship team at BlackRock (2004-2018)Proxy Voting GroupBig change on engagement with companies started after financial crisis (2007-2009).Impact Dodd Frank Act (2010) - Say on Pay.(10:24) -  Her experience as Global Head of Corporate Governance at Alliance Bernstein (2018-2019).(13:29) - How do governance professionals (proxy voting teams) reconcile dissonances with portfolio managers.(15:17) - Her role at the NYC Office of the Comptroller’s Corporate Governance and Responsible Investment team. "It's hard for asset managers to be advocates, as opposed to asset owners such as the NYC pension funds."(19:29) - Her take on the SEC's new shareholder proposal rules and DOL's new rule shifting away from ESG.(25:09) - Her take on the increasing importance of institutional investors' voice on corporate governance, particularly the top 3-5 asset managers. Any antitrust risks on cross-holdings by institutional investors?(29:39) - Her predictions on how some of these regulations may change during a Biden Administration.(32:20) - Her take on the Boardroom Accountability Project 1.0 (2014) focused on Proxy Access.(35:56) - Her take on the Boardroom Accountability Project 2.0 (2017) focused on board diversity, matrix and refreshment.(39:03) - Her take on the Boardroom Accountability Project 3.0 (2019) calling on publicly-traded companies to adopt a policy requiring the consideration of both women and people of color for every open board seat and for CEO appointments, a version of the “Rooney Rule” pioneered by the NFL. ("at least 20 companies have adopted this practice, and this will continue.")(40:12) - Push on EEO-1 Reports (it's a type of CEO accountability project, "the majority of Fortune 100 companies currently disclose these reports or have committed to disclose them.")(42:59) - Her take on California's SB-876 and AB-979 laws on boardroom diversity.(44:49) - Her opinion on the BRT restatement of the purpose of the corporation (2019).Her involvement with The Test of Corporate Purpose Initiative.What are the quantitative measures or data that can analyze these metrics on corporate purpose?(48:10) - Her thoughts on whether we will ever see employees elect corporate directors per Elizabeth Warren's proposed Accountable Capitalism Act (2018)(49:29) - Her favorite books:East of Eden, by John Steinbeck (1952)Works by Michel Foucalt (studies on biopower and other theories of power)The Happiness Industry, by William Davies (2015)(50:43) - Her mentor was her late grandmother who taught her that "as a woman, you can always take care of yourself and you should ensure your own financial stability, if possible."(51:29) - Lessons from 2020: "You have to live your life today - time is more important than money."(52:36) - The experience of living in NYC under COVID-19.(54:51) - The living person she most admires: Laura Nader. "You have to dress conservatively if you're going to have extremely revolutionary ideas."Yumi Narita is the Executive Director of Corporate Governance at the Comptroller's Office of New York City. The Comptroller serves as investment advisor, custodian, and a trustee to the New York City Pension Funds, which hold approximately $228 billion in assets. In her role as Executive Director, Ms. Narita is responsible for developing and implementing active ownership programs for public equities, including voting proxies, engaging portfolio companies on their ESG policies and practices, and advocating for regulatory reforms to protect investors and strengthen investor rights. Ms. Narita has 16 years of experience in the ESG industry. Prior to this role, she was the Global Head of Corporate Governance at Alliance Bernstein, and Vice President on the BlackRock Stewardship team.Follow Evan on Twitter @evanepsteinMusic/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(1:17) Start of interview (1:58) Mason's "origin story" (2:51) His start with ValueAct Capital (2001-Present) "A lot of what we do at ValueAct is invite ourselves to the dinner party."(6:20) The history of ValueAct Capital and its investment thesis.  How he met Jeffrey Ubben (founder of the firm).The impact of the corporate scandals in the early 2000s and the Martha Stewart story.Building a reputation as long term thinkers with board members that add value, plus network.(11:21) How they built their "board toolkit" for each function of the board with lessons learned from their board experience (starting ~2010s) (12:49) "Our thesis is different to other activist investors who have built their businesses upon campaigns of intimidation, litigation and electioneering" (14:01) Framing ValueAct's activism style within the historical arch of shareholder activism. "Engineers think in terms of optimization and equations, lawyers think in terms of rules, and liberal arts people think in terms of psychology, sociology, literature, etc - I think you need to take into account these three types of thinking for problems [involving corporations}"What happened after SOX (2002) was that the zeitgeist for boardrooms changed in terms of openness to receiving outside opinions.(15:56) The Say on Pay (2011) rules forced greater interaction between directors and shareholders. (18:00) His thoughts on "systematic" boardroom design issues: "we should all have empathy for independent directors, because they're entrusted to make the most consequential decisions around the corporation and yet [they do it part-time and generally lack information]. It's a tough job to do." "We can bring "peripheral" vision to the boardroom, which is supplemental to what the board sees through their own hierarchy." (20:11) The problem with board committee structures and their independent consultants/advisors: "it drives to the balkanization of work." "There is an under-investment in terms of time devoted to strategy [in the boardroom]" (23:33) "Thinking like an investor with an investment thesis is a very crystallizing thought exercise. It will lead you to have a point of view about what the strategy should be." "It's an important ingredient to being a good director." (24:51) How should boards approach strategy, and why the job of the director is so hard (i.e. lack of time and information) (27:49) How does he respond to criticism of activist investors as a class  "some of these criticisms are fair."  He thinks that it's important to note that shareholder activism (during his career) has had two big bubbles that popped:Surge of activism after SOX, popping after the financial crisis because they didn't perform very well.Resurgence after credit crisis, popping in the mid 2010s.(29:50) How advisors (lawyers, bankers, and others) impacted the activism landscape  "activist vulnerability assessments"(30:45) How he distinguishes transactional vs transformational activism Transactional: Traditional break-up, recap and selling of companies.Transformational: reimagining the value proposition of the product of the company. Best in class people and operational performance. It requires a lot more work (they started this practice in the mid-2000s).(33:16) The mission statement of ValueAct since he took over as CEO is "to be the shareholder of choice for great companies navigating change." Examples:Adobe, Microsoft (from client service era to cloud era in software industry)21st Century Fox (streaming in media companies)KKR (alternative asset management industry)(34:46) What he loves about his job (35:29) Advice for independent directors: Activism is everywhere (not just from activist investors)Peripheral vision can be helpful, and thinking critically with an investment thesis adds value.We live in an era of extreme disruption in the economy.Transformation is a critical journey for every company.(37:08) His experience as a director at Microsoft(42:45) His take on the purpose of the corporation, ESG and sustainabilityThey have observed that the businesses that they invest in have a "license to operate": to be held in high regard by their stakeholders, regulators, media, politicians and other relevant constituencies.When they invest in a company they spend time with the "citizenship officers" of the company.Example of investments in financial institutions.(51:28) The principles by which ValueAct Capital invests: "We have to have a unique insight into every company we invest in that begets a meaningful relationship." (power politics is secondary)Good ideas pique curiosity, engagement and conversation.It doesn't matter if the corporation is a controlled corporation (for example, Martha Stewart, KKR, 21st Century Fox are controlled corporations)(53:39) Their international investments:UK: Reuters, Misys, Rolls-Royce.Japan: Olympus, JSR Corporation, Nintendo. "There is a graveyard of activists that have tried to take on Japanese companies at the ballot box and at the courthouse, and that type of high conflict transactional -in your face- approach does not work."(57:50) How does he see the future of shareholder activism and his recommendations(59:21) His favorite books: Memoirs of the Second World War, by Winston Churchill (1948-53)The Remains of the Day, by Kazuo Ishiguro (1989)The World According to Garp, by John Irving (1978)(01:01:51) His professional mentors: Jeff UbbenSatya Nadella(01:02:42) His favorite quote: "In the long run, the learn-it-all always beats the know-it-all " (Satya Nadella)Mason Morfit is a Partner, CEO and CIO of ValueAct Capital and is a member of the firm’s Management Committee. Prior to joining ValueAct Capital at inception, Mr. Morfit worked in equity research for Credit Suisse First Boston’s health care group where he focused on the managed care industry. Mr. Morfit is a member of the Advisory Council for Princeton University’s Woodrow Wilson School of Public and International Affairs and serves on the Board of Directors of the Tipping Point Community. He has a B.A. from Princeton University and is a CFA charterholder. 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

Start of interview [1:19]Ilya's "origin story" [1:50]Lomonosov Moscow State University ('97)New Economic School (NES) ('99)London Business School, PhD Finance ('04)His start as a Professor at the Stanford Graduate School of Business (2004-Present) [7:08]His initial interest in the field of venture capital  [7:56] "These days my major problem is that there are so many research projects, and I have to juggle 10 different (amazing) research projects at the same time."Why governance of venture-backed companies has been historically under researched by finance scholars (it has to do with the "quantification revolution" from the 70s-80s). [12:08]His article "The Economic Impact of Venture Capital: Evidence from Public Companies" co-authored with Will Gornall (2015) [14:29]"This is important to mention: venture capital is an American phenomenon, since 2016 every single day the top 5 U.S. public companies by market cap were venture-backed, and from the top 100 there is a significant proportion. But most importantly they are young companies that grow very fast."His article "How Do Venture Capitalists Make Decisions?" co-authored with: Paul A. Gompers, Will Gornall, Steven N. Kaplan (2016) [20:40]Differences between VCs focused in IT and healthcareDifferences in terms of geography (i.e., west coast v. east coast, U.S. v. international)Differences in early stage vs late stage.Deal flow, deal selection, and post-investment value-added as contributors to value creationInvestment selection (jockey v. horse framework)His article "Squaring Venture Capital Valuations with Reality" co-authored with Will Gornall (2017) [32:37]. They wrote this paper because:It is difficult to apply traditional financial methodology (such as DCF or CAPM) to early stage startups.Whenever the valuation of venture-backed companies was reported in the press or in commercial datasets,  it did not make sense to him (not the price, but the way it was reported).They used the example of Square's post money valuation pre-IPO.They created a new valuation model for startups (they found that the average unicorn in their sample had 8 classes of shares).His current research on governance of venture-backed companies [41:12]In venture-backed companies boards are very "unstable" due to staged financing.Board control, voting rights and protective provisions.Stanford Venture Capital Initiative: one of its goals is to improve the quality of the data in venture-capital. Some projects:Study of evolution of corporate governance in venture-backed companies.The anatomy of down-round financings.His take on the "stay private vs go public debate" and SPACs [49:12]Significant increase of investors in private markets.Liquidity options beyond IPOs and M&A, such as secondary markets.His favorite books: [54:42]The Structure of Scientific Revolutions, by Thomas Kun (1962)The Autobiography of Bertrand Russell, by Bertrand Russell (1951)His professional mentor: [54:42]His father: "maybe the most important lesson that I learned from him is that you have to be calm, even when life throws at you a ball that that you don't necessarily want." "He taught me how to live and behave in life."Stephen Schaefer. His former academic advisor at LBS.His favorite quotes: [57:43]On the difference between theory and practice. "It is very difficult to tell people: learn how to swim, but only when you learn how to swim we're going to fill the water in the swimming pool"His unusual habit [58:48]These days, the fact that he reads (his goal in life is to devote one hour per day some physical book, usually on topics unrelated to finance).His experience as a corporate director of Yandex  [01:00:57]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