Boardroom Governance with Evan Epstein

Start of interview [1:12]Mark's "origin story" [2:02]How he got started with Cotchett, Mitre & McCarthy (1993) [3:40]His current practice focusing on corporate governance cases [5:03]His opinion on current state of corporate governance in public companies:Increased focus on diversity on boards [7:27]Data Breaches, Privacy and Cybersecurity "one of the hottest areas" [10:03]His take on the current TikTok situation (forced sale by US President) [12:08]"The CISO is the most important executive after the CEO [in IT companies]" [13:27]In 20 years of practice, he sees the same familiar patterns: "there seems to be [when things go wrong] an inability to react properly by directors in times of crisis. A failure of the board to have some type of process in place to deal with something that was unforeseen." [15:30]His take on dual-class shares and the WeWork case. How going public puts the company at "a whole other level in terms of scrutiny of governance practices." "The dual-class is a red flag." [17:15]They are looking for "an imbalance in voting power", questionable transactions, inspections demands (books and records), conflicts of interest, self-dealing, insider-trading [21:29]How they investigate their cases: books and records requests, private investigators, disgruntled employees, experts in the field. [24:21]Litigation in private companies, including venture-backed companies: "there has been an uptick in the last year or two" [27:14]"If you think it's difficult to get information [for litigation purposes] from a public company (with shareholder inspection demands), it's 10x worse in the case of private companies." [33:11]His experience deposing directors of private venture-backed companies [36:12]His opinion around the debate of the purpose of the corporation [38:40]How he sees the future of shareholder litigation: more cybersecurity litigation (companies should have specific cybersecurity committees) and board committees litigation. [40:20]His take on exclusive federal forum provisions (bylaw amendments) [42:12]His take on trend of California companies and employees leaving the state [47:40]His favorite books: [48:50]Team of Rivals (on Abraham Lincoln) (2006) (by Doris Dearns Goodwin)Dead Wake: The Last Crossing of the Lusitania  (2016) (by Erik Larson)His professional mentors: [51:40]Susan IllstonJoe CotchettHis favorite quotes: [53:59]John Madden: "Don't worry about the horse being bling, just load the wagon."Warren Buffett: "Only when the tide goes out do you discover who's been swimming naked.”His "unusual habit" that he loves: walking with his bulldog every morning to pick up the newspaper. [56:26]The living person he most admires: his parents from "the Greatest Generation" [57:14]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

Start of interview [1:30]Jim's "origin story" [2:12]How his experience at CalEPA led him to become a shareholder advocate [6:07]His experience with Mark Latham, a former Berkeley Prof and Salomon Brothers banker on developing and promoting a new shareholder proposal method  [8:03]His efforts to get elected to the CalPERS board [11:33]CalPERS and the increasing influence of institutional investors in corporate governance  [12:53]"Thirty years ago no shareholder proposal had ever passed." Last year [McRitchie] filed 50 proposals and in 26 of them he got majority vote or else he worked an agreement with the company. [14:21]His Proxy Access petition to the SEC in 2002 [15:28]Why his friends from social responsible investment (SRI) funds started filing shareholder proposals [16:57]Pax World Funds was the first socially responsible investment fund. "Later on, SRI funds started engagement campaigns." [18:55]"ISS and Glass Lewis don't set the agenda, it's the public opinion that sets the agenda." "ISS is not driving the vote, they simply hold up a mirror to its customers" [20:28]Jim's take on "stakeholder capitalism" and BRT's restatement of the purpose of the corporation. [21:56]Jim's shareholder proposals at BlackRock: His "hypocrisy proposal." [23:46]Jim's approach for his shareholder proposals, and why he's getting majority support. How he compares with John Chevedden and the Steiners. He keeps a spreadsheet with 150 target companies. [25:27]Why he does what he does: "I am really pissed off with all these injustices" [27:20]The influence of the book "A Nation of Small Shareholders" by Janice Traflet (2013) [28:47]The problem of dual class shares [31:15]Jim is taking a page from Elizabeth Warren. He'd like companies to elect a director who can serve  as a liaison to employees ("Rooney rule but including employees"). [32:33]Jim's Rulemaking Petition to the SEC for Real-Time Disclosure of Proxy Votes [34:19]Why he files around 50 shareholder proposals per year [36:14]The impact of COVID-19 on his work, and the advent of virtual shareholder meetings [37:14]"There has been tremendous corporate governance progress on paper (not so much in reality)" [38:22]How his work has enabled hedge funds to go after companies [39:18]His favorite books: [44:42]The Social Construction of Reality (1966) (Peter Berger & Thomas Luckmann)Participation and Democratic Theory (1970) (Carole Pateman)Power and Accountability (1992) (Bob Monks and Nell Minow)His favorite study: NSF meta-study from 45 years ago: workplace should be more democratic, employees should have more say. [44:42]The living person he most admires: [48:05] Nell Minow.The people that have most influenced his work: [49:06]Bob MonksNell MinowRich KoppesThe Gilbert brothers.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

Start of interview [1:38]Rick's "origin story" [1:55]His "traditional" corporate law practice for 25 years with Morris Nichols in Delaware ("the core of our advice followed two simple rules: shareholders get to elect the directors, and directors run the company for the benefit of those shareholders... all the rest is commentary") [3:45]How his focus changed in 2010 with B Lab's effort to push legislation in DE on benefit corporations [5:45]How B Lab's benefit corporations proposal differed from "constituency statutes" [07:50]Three sets of cases worth thinking about: 1) Pre-constituency statutes (shareholder primacy); 2) Constituency statutes ("it's a may, not a shall"); 3) Benefit corporations (only one case has been filed, in Virginia, and it quickly settled)  [10:41]The first benefit corporation statute was enacted in Maryland in 2010 [12:59]B Lab's push in Delaware, and how Rick joined B Lab. Some influence from Lynn Stout's "The Shareholder Value Myth."  [13:50]Although originally shunned by VCs, public benefit corporations incorporated in Delaware have raised ~$2.5bn between 2013 and 2019 per a recent study (based on 275 early-stage financings). Per Rick, total US fundraising by benefit corporations is in the order of $4 billion. [15:54]Evolution of legal structures for benefit corporations, expanding the BJR: B Lab's proposed MBCL, PBCs in Delaware, ABA version, British Columbia, etc.) [17:55]Accounting for social value "what gets measured, gets managed": SASB (sustainability metrics), GRI Standards, B Impact Assessment (score and certification). Pressure on the SEC and EU's metrics [26:16]Distinguishing benefit corporations (generic term, ~10,000 companies around the world), public benefit corporations (Delaware form, ~2,000 companies) and B-corps (certification by B Lab, ~3,500 internationally, of which only ~300 are benefit corporations). Danone's conversion to "Entreprise à Mission." [29:57]Traditional VC investors are investing in benefit corporations (not only impact investors) [34:20]Benefit corporations in public markets (3 IPOs, 3 conversions): Laureate Education (2017), Lemonade (2020), Vital Farms (2020). Brazil's Natura (certified B Corp) acquisition of Avon (2019), Danone and Amalgamated Bank  [36:22]How does Rick respond to criticism of the benefit corporation model and the need to get support from institutional investors to succeed [40:43]How to reconcile the current debate of the purpose of the corporation, plus ESG trends, with the benefit corporation movement [45:51]The focus of Rick's new project The Shareholder Commons (2019), with initial funding from the Ford Foundation. "We want to change the paradigm for institutional investors (through advocacy, guardrails, policy and litigation)" [50:03]His book "Benefit Corporation Law & Governance: Pursuing Profit with Purpose." (2017) [56:41]His favorite books: [58:36]The Mind's I (Douglas Hofstadter and Daniel C. Dennett)Wherever You Go, There You Are (Jon Kabat-Zinn)Morality, Competition and the Firm (Joseph Heath)His mentors: [01:01:07]John Johnston (Former partner at Morris Nichols)Lewis Black (Former partner at Morris Nichols)His favorite quote: [1:02:54]"No effort is wasted""Strategy is what you don't do"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

Start of interview. [1:40]Marta's "origin story" from Brazil to Washington DC [2:21]Her involvement with corporate governance education in Brazil with IBGC [6:31]The impact of Lava Jato (operation car wash) in Brazilian corporate governance (2014) [8:33]Her role coordinating the "comply or explain" Brazilian Corporate Governance Code [11:07]What made her transition from Tozzini Freire to IDB Invest in 2017? [16:31]What is IDB Invest? [19:13]Description of the Corporate Governance Development Framework adopted by 34 development finance institutions (DFIs) that manage ~$850B [23:13]IDB Invest's corporate governance framework: "The art is always trying to separate the essential from the desirable, the must-have from the nice-to-have." [25:45]How to coordinate the investment focus from the governance focus (time-management) [28:47]The state of corporate governance and some common issues in Latin America: lack of diversity, smaller capital markets, predominance of controlling shareholders, SOEs, and reliance on bank financing [33:24]The challenges for foreign investors in Latin American listed companies: protection of minority shareholder rights, transparency and related-party transactions [39:41]Controlling shareholders in Latin America have an incentive to improve corporate governance to attract investment in order to compete in a globalized market: "those are the winners in the market." [44:24]IDB Invest has a special focus on small countries and islands ("S&I countries") [47:12]The impact of Covid-19 in Latin America and IDB Invest's role in helping the region [49:39]IDB Invest article and guidance for the role of the Board during Covid-19 [51:43]Her favorite books: [55:54]The Trusted Advisor (Meister, Green & Galford)Crime and Punishment (Dostoyevsky)Her mentors: [58:01]Marcio Mello Silva Baptista (TozziniFreire)Maria Elisa Gualandi Verri (TozziniFreire)Luis Valdes (Principal - Brasilprev)Sandra Guerra (Better Governance)Rachel Robboy (IDB Invest)Her favorite quotes: "The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy." Martin Luther King Jr. [1:00:01]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

Start of interview. [1:40]Linda's "origin story" from Beresford, New Brunswick, Canada. [2:15]The record of five Maxwell sisters at Harvard. [3:56]Her start as a head and neck surgeon. [6:28]Why an MBA at Oxford? [07:20]Her work on life sciences tech transfer at Oxford University Innovation and NHS. [08:25]Her time with the London (UK) Harvard Business School Angels. [11:24]Working with Medtronic in Sao Paulo, Brazil. [12:07]Her work founding the Biomedical Zone in 2015 (Ryerson University & St. Michael's Hospital) [14:30]Her take and experience with non-profit boards (Medic Alert Canada, CEE Centre for Young Black Professionals, Gardiner Museum): "one of my important philosophies to be on a board is that I want to be able to contribute, but I also want to learn." "Non-profit board service is very diverse, it is driven by passion and it requires a lot of work, if you do it right." [22:21]Her take on startup boards. [27:05]Her take on med tech / biotech public company boards. [28:21]Her take on the Canadian  ICD.D certification  "it was transformational." [29:45]Her experience getting into her first public board: Profound Medical (TSX: PRN) [33:01]The cross-listing process (TSX-NASDAQ) [35:46]Her take on social unrest and lack of diversity in boards (her experience in healthcare) [38:39]"When I'm involved in a board recruiting process, I always ask why do you want me in this Board" [42:13]The lack of inclusion for the Black community in tech (opportunity in biotech) [45:08]"The role of the board is critical to support underrepresented minority CEOs" [46:13]Her take on mentors: "I am not a huge believer or fan of  mentorship, I am a fan of mentorship plus sponsorship, ie. champions that open doors." "It's the saying of your name, when you are not in the room, to people who matter and that make the decisions."  [48:13]Her favorite quotes: "You will face many defeats in life, but never let yourself be defeated" by Maya Angelou [53:24]Her unusual habit: "I eat the same thing for breakfast everyday, the same thing for lunch everyday, and the same thing for dinner everyday." [55:33]The living person she most admires: Barack Obama. [01:00:00]___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

Start of interview [1:40]Nick's "origin story", from New Jersey to California to Japan [3:33]His first board experience with Alps Mapping ('00-'06) [7:34]Why he founded the Board Director Training Institute of Japan in 2009 [12:40]His WSJ article on "Japan's Coming Shareholder Revolution" (2001)  [19:42]Japan's keiretsu system ("a defensive cross-shareholding wall") [21:04]The historical resistance against having independent directors in Japan companies [23:25]The effect of the ACCJ's white paper that led to Japan's Stewardship Code (2014) and Corporate Governance Code (2015) [24:40]Why Japan needed a corporate governance code (to enhance corporate disclosure) [32:20]Japan's change in board composition (now one third are independent directors) [34:52]His take on executive pay, particularly around the approval of "Say-on-Pay" in the US and distinctions with exec comp in Japan [36:51] His take on ESG and "stakeholder capitalism" [39:50]Nick's opinion of dual class share structures: "I dislike them vehemently, I think they make a mockery of the concept of shareholder democracy" [45:34]Nick's recent proposal: "Redesigning corporations: Incentives Matter" (published in Harvard Law School Forum on Corporate Governance) [47:50]The use of blockchain technology to track beneficial share ownership [57:17]How to find Nicholas Benes online:Website: https://bdti.or.jp/en/Email: info@bdti.or.jp Twitter: @benesjp ___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

Start of interview [1:44]Miriam's "origin story" from Puerto Rico to the U.S. mainland [2:17]Her pick for a dual JD/MBA degree [3:16]Her experience as a startup founder in the late 1990s [5:17]Her early experience at Google starting 2001 [07:08]Her focus on angel investing and entry into the VC industry [08:09]Her experience with the Kauffman Fellows Program "they were at the forefront of diversifying VC" [10:18]How to think about corporate boards from the seed stage onward [12:37]The problem with lack of diversity of skill sets and backgrounds in startup boards [14:27]The approach of Ulu Ventures with board seats [15:22]"In the last 10 years, seed stage capital has become a real part of the VC ecosystem." [16:00]"There are ~900 Micro VC firms that have been established in the U.S. in the last 10 years" [18:44]Her reaction to Fred Wison's (Union Square Ventures) proposal to diversify startup boards [20:15]"When we join a board, we generally will cede that board seat at the Series A investment" [23:30]Miriam's take on dual class shares "You are no Jack Kennedy" [25:53]"We've passed on companies that [at the seed stage] are commanding dual class shares." [27:43]"At Google, Larry Page brought on E. Schmidt even though he knew he wanted to be CEO ultimately" [30:13]Her response to concerns by founders/entrepreneurs of potential bad behavior by VCs. Mention of Prof Ilya Strebulaev article "Squaring VC Valuations with Reality" [31:52]Miriam's take on diversity in Silicon Valley. "In the early days, Google was a relatively diverse team and I think it was under-reported how Google's diversity (at the top) lead to the success of the company." "Almost every leader at the company had a right hand woman" [38:31]"If you invest in diverse teams, it will lead to financial outperformance" Kauffman Fellows Analysis: "Deconstructing the Pipeline Myth and the Case for More Diverse Fund Managers" [41:13]The change in attitudes and expectations from Limited Partners in terms of diversity standards [43:06]"Public pensions are among the most diverse pool of capital out there" (ie. police, teachers, etc) [44:20]Books that have greatly influenced her life [46:00]:"Seven Habits of Highly Effective People" by Stephen Covey."Biased: Uncovering the Hidden Prejudice that Shapes What We See, Think and Do" by Jennifer Eberhardt."Illusions" by Richard Bach.Miriam's mentors [49:34]Her favorite quotes: "Your children are not your children" by Khalil Gibran [51:09]Goat yoga! [53:40]The living person she most admires: Brian Stevenson, founder of the Equal Justice Initiative, a human rights organization in Montgomery, Alabama. [54:55]How to find Miriam online:Website: www.uluventures.comTwitter: https://twitter.com/miriamulu1___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

Start of Interview [1:33]Suzanne's start in the U.S. Air Force [2:50]Her transition to cyber operations [4:25]Suzanne's take on transitioning from the Military to corporate boardrooms [7:25]Adding former military leaders in the boardroom adds to "diversity of thought": "[Board composition] should seek concinnity, rather than falling into the lowest common denominator which would be consensus" [09:07]At the time of Suzanne's transition to the private sector, "the Government had recognized that [cyber] was an area where there was going to be significant change and significant attention was needed" [11:15]Collaboration in the Cybersecurity field: "The private sector wants to protect who they are, the Government wants to protect how they know" [13:19]How to think about offensive and defensive capabilities in cybersecurity: "On the offensive side of cybersecurity you only have to succeed once, on the defensive side you have to protect everything, all the time." [15:42]General Alexander: "the difference between bolting it in on and baking it in"  [16:00]"In 2020 we are in the half-way point, we still have an architecture that relies on technology that is fundamentally at risk but technology is getting better and more secure" [17:58]How sitting on boards in different industries shapes her cybersecurity approach: Battelle Memorial Institute, Parsons Corporation, Wells Fargo, CSX [19:38]How to think about cybersecurity expertise in the boardroom [22:52]Cybersecurity education for corporate directors [24:39]What is the best way for the board to address cyber risk [28:30]"You want to have good baseline security systems, plus resilience and redundancy" [30:25]Recommended cybersecurity resources  for directors: [33:03]Cybersecurity & Infrastructure Security Agency (CISA)Cyber ScoopSans NewsBitesSecureworks Recommended Frameworks: [36:48]National Institute of Standards and Technology (NIST)National Initiative for Cybersecurity Education (NICE)"The people in your organization are the  greatest risk vector because that's the easiest path in" [38:56]How COVID-19 has impacted cybersecurity risks [39:30]The increase in cyber risks, particularly with "work from home" trend. "the vectors have increased for ransomware attacks involving health professionals. Sans "Work from Home" Guide. [42:45] Her take on greatest cyber challenges moving forward: [46:12]Critical shared infrastructure (power, transportation, etc.)Supply chains (praising DARPA doing bug bounty program for hardware)Her recommendations to other directors on cybersecurity matters [51:14]Ask about current tech or framework and what are the risks to such foundations/systemsWhere are you most at risk for litigation (for example: privacy)Her favorite books [53:21]:She's a Malcolm Gladwell fan, most recently read "Talking to Strangers" and "David & Goliath.""Thomas Jefferson: The Art of Power" by Jon Meacham."First Ladies" by Margaret Truman."Dr Seuss and Philosophy" by Jacob Held.Suzanne's mentors [55:35]:Earlier in her career: Gen. Thomas S. Moorman, Jr., Gen. John Shalikashvili, and Col Adelbert Buz" Carpenter"As a board member: Dan Schulman and Doug Baker.Her favorite quotes: early in life "Here is Edward Bear coming downstairs now, bump bump bump..." Later: Colin Powell's "Eternal optimism is a force multiplier." John Schofied: "The discipline which makes the soldiers of a free country reliable in battle is not to be gained by harsh or tyrannical treatment..." [59:40]The living person she most admires: Condoleeza Rice [01:02:25]___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

Start of Interview [1:45]Mervyn King's origin story as an attorney in South Africa [2:51]His first foray into corporate boards and later senior management roles [4:30]Why he was asked to form a Corporate Governance Committee in 1992 [5:30]The call from Nelson Mandela [06:07]Professor Lynn Paine's article: The Error at the Heart of Corporate Leadership  [9:43]How King framed the role of the corporation in the first King I Report in 1992 [12:10]"Decisions by the Board need to be made in the best long term interest of the company, this  incapacitated artificial person that has no mind, no heart, no soul and no conscience." "The directors must make a decision in the long term interest of the health of the company, rather than just in the wealth of the shareholders" [13:10]"The 20th century became the century of unsustainable development"  [14:02]Joining the U.N. by invitation of Kofi Annan to review governance of U.N. agencies: "that's where I started learning about sustainability"  [16:15]The premise of the King II Report: to address sustainability reporting in South Africa (2002) [17:22]King on Larry Fink's (BlackRock) Letters to CEOs [21:17]Accounting for sustainability was started as "Connected Reporting" by Sir Michael Peat [22:18]The premise of the King III Report, to include integrated reporting (2009)  [23:02]Addressing Accounting for Sustainability organized by Prince Charles in the U.K. [24:30]The IIRC Integrated Reporting Framework (2013) [25:06]"One of the proudest things in my life is that integrated thinking has been achieved" [26:21]King on the BTR Statement on the Purpose of the Corporation "You are not accountable to the stakeholders, you are accountable to the company" [26:45]"Boards have to spend more time understanding financials, including the three critical dimensions for sustainable development in a resource constrained world: 1) Economy, 2) Environment and 3) Society." [30:05]The premise of the King IV Report: reporting should be outcome based. [32:00] Focus on four outcomes:Value creation in a sustainable manner in a resource constrained world.Effective Controls (with informed oversight by the Board).Trust and confidence of the community in which the company operates (legitimacy).Effective Leadership.King on race, inter-generational ("add millenials on your board") and gender diversity on boards  [35:44]"The first thing on the minds of Gen Z is climate change. That's the elephant in the room" [39:12]"The mindset of boards has to be collaborative, compromising, with a long term outlook (particularly on climate change)" [41:13]The lessons from South Africa on racial diversity in boards [42:53]Governments should amend corporate laws to reflect that being a director is a very important profession.[44:24]King has tried to persuade governments to create apprenticeship programs for directorships "the U.S. should do this to help young African American professionals get into boards, creating a wider pool of candidates" [46:00]A book that influenced his life: "The Principles of Modern Company Law" by L.C.B Gower (1954)  [48:57]Living person he most admires: Lynn Forrester de Rothschild, the founder and CEO of the Coalition of Inclusive Capitalism [53:38]King on ESG and inclusive capitalism [56:44]How to find Mervyn King online:https://www.mervynking.co.za/ https://www.wits.ac.za/staff/academic-a-z-listing/k/mervynkingwitsacza/___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

Start of Interview [1:30]How Anat's research evolved from corporate finance to corporate governance [3:40]How the Financial Crisis ignited her research interest in the banking sector [4:25]What's "special" about the finance and banking industries? [8:31]Why the lack of equity funding in banking? [10:12]The premise of her book "The Bankers' New Clothes" [11:28]"In banking you can be insolvent forever if you don't default" [13:27]"JPM's assets on balance sheet: ~$2.5T, plus off balance sheet: $4T! "that is unfathomable." [14:08]"The regulators are failing so miserably, and they are so used to failing that they perpetuate their failures"  [16:02]Over a decade after the financial crisis, "the financial system is a disaster" [16:54]"We are going to have zombies everywhere" [19:06]"Deutsche Bank is the classic zombie" [22:08]How to understand the decoupling of the stock markets from the "real economy": [23:45]Rise of private market financing. Sliding to opacity.Rise of big tech"Saving glut of the rich": the money of the world is going into the US stock market.Fed support is propping up the corporate debt market, helping the stock market.Anat's take on the BRT Statement on the Purpose of the Corporation: "I am skeptical" [29:00]Anat's take on B-corps [32:04]"I don't want CEOs to solve society's problems, I want the Government to solve them." Premise of the Corporations and Society Initiative at the GSB [33:47]Anat's take on ESG: "It's all nice and well, but it has its limits" [36:24]"If men were angels, no Government would be necessary" (James Madison) [40:05]Paul Polman's search for "Heroic CEOs" [41:09]Why cross-disciplinary research matters "I was in a bubble of finance" [41:58]Senator Sherrod Brown's book recommendation for Banking Committee: "The Color of Law" [43:18]Anat's article "A Skeptical View of Financialized Corporate Governance" (2017) [44:31]Katharina Pistor's "The Code of Capital" book [46:58]Anat's take on the current push-back against stock buybacks and dividends. Her article: "The Leverage Ratchet Effect." [48:03]"Where you see financialized corporate governance at its worst is paying shareholders in a crisis." "Bank regulators have to put a complete and utter ban on payouts for all the banks." [51:15]"We must abolish the corporate tax interest deductibility" ("we shouldn't prefer debt over equity for funding for tax reasons") [54:17]How to find Anat online:https://admati.people.stanford.edu/Corporations and Society Initiative at the Stanford Graduate School of Business.___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