Boardroom Governance with Evan Epstein

Julie Daum discusses the aging of US boards and the lack of turnover. They explore the recruitment of retired or active CEOs, the increase in directors with financial backgrounds, and the trends in board diversity efforts. They also discuss the role of ESG and the potential impact of AI on board placements.

0:00 -- Intro.1:38-- About this podcast's sponsor: The American College of Governance Counsel.2:34 -- Start of interview.3:13 -- Mauro's "origin story." 4:11 -- About AMEC, and his time as CEO of the organization (2012-2017). Prior, he was Chairman of IBGC (2008-2010). "My first mission as CEO of AMEC was to become the first independent director at Petrobras" (which he served from 2013 to 2015).9:02 -- On the differences between shareholder engagement/activism in the U.S. and Brazil. 10:04 -- The corporate governance changes introduced by Novo Mercado (special listings segment created in Brazil in 2000).11:39 -- About the Petrobras corruption scandal ("Lava Jato" or "Car Wash"). He was the first independent director in Petrobras (2013) and they elected a second independent director in 2014. "1+1 in that situation equals 4." "The board simply did the Government's bidding." "But it's all gone now, there has been a huge backlash. There is no one in jail anymore." "Just like what happened in Italy with the Clean Hands Operation, there is a political wave of acquittals." "There was a class action settlement in the U.S. for $3.5 billion (2016) and PwC settled for $50 million (2018)."18:58 -- His joining the board of Vale (2021-2023), post Brumadinho dam disaster (2019). "I was elected to the board as part of an activist campaign, led by Capital Group." 23:28 -- On the SEC's action against Vale for greenwashing (settled in 2023 for $55.9 million). "Vale became a lightning rod and it is a rich company in a poor country and in a poor region of a poor country." "One executive of the company used the expression that was Vale is the peacock in the Favela." "[Vale] gets a lot of attention and focus and sometimes not fairly. It does some amazing things in terms of ESG." "Vale is actually an example that responsible mining is not only essential for the energy transition, but it actually can be good for the environment. But there's a lot of bad press around it."24:40 -- His take on ESG: "ESG should not be driven by rankings, reports and ratings. It must be driven by owners."28:50 -- On the ESG backlash. "Part of the problem has to do with the architecture of the institutional investors." "The productive way for investors to ensure that companies are doing the right thing is one-on-one engagements that cannot be done wholesale. It needs to be done in a more retail way. So this increases the value of specialized asset managers that have a smaller portfolio, that may or may not be called activists."32:11 -- On joining the board of Embraer. The impact of the Pandemic and 'work from home' in Brazil.34:55 -- On the evolving geopolitical landscape, China/US tensions and where Brazil stands in this picture. 39:17 -- On the role of independent directors, and evolution in Brazil in the last 20 years:"When you get into a situation like I was in Petrobras, you need to know where your red lines are and what to do when they're reached. You can fight and in some cases it may be the case that you need to leave and do a noisy withdrawal as I've done several times in my career so.""I fear that in many situations we have lots of companies reporting larger percentages of independent directors on their boards, but these are not really independent.""[You have to] be true to your values, know your red lines, but at the same time, try to work with people. And some things will not be the way you want. So a director who simply says no when the board goes in a way that he or she doesn't agree with is not going to be productive.  So you have to, in Brazil we say we need to swallow some frogs every once in a while. You just have to watch out to make sure what are the sizes of frogs that you can swallow to make it for productive mandate on the board, but at the same time not compromising your values."43:44 -- On the question of single issue directors. "I think it's a big mistake for a number of reasons. First, because it's not enough space for all the issues to be on the boards. The other problem is that if you have a specialist on the board, say in cyber security, every time the issue of cyber security comes up, everybody will look at this guy and say, whatever he or she is telling us to do, you're outsourcing your fiduciary duty, which is terrible."45:45 -- "Brazil today has very different companies. This means that the governance structure for each one of them has to be different. And we have to understand, it's case by case, and we need to build the governance structures that are adequate to each company." "I think when we think about ESG, we're really talking about E&S, and people are forgetting the G. The G is what gets E&S done. E&S without the G is greenwashing."47:49 -- Book that has greatly influenced his life: Atlas Shrugged by Ayn Rand (2003)48:00 -- His mentors, and what he learned from them: André Jacurski and Paulo Guedes (founders of Banco Pactual).48:33 -- Quotes that he thinks of often or lives his life by: "We didn't come this far just to come this far"48:50 -- The living person he most admires: Bill Gates.Mauro Cunha is one of the top corporate governance voices in Latin America, currently serving as a director of Embraer, AES Brasil, Klabin and Hypera. He has also served on the boards of some of the most important companies in Brazil - including Vale, Petrobras, Eletrobras, among others. __This podcast is sponsored by the American College of Governance Counsel.__ You can follow Evan on social media at:Twitter: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__You can join as a Patron of the Boardroom Governance Podcast at:Patreon: patreon.com/BoardroomGovernancePod__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

Brian Stafford, CEO of Diligent, discusses topics such as governance oversight, the new Diligent One Platform, his book on governance in the digital age, ESG and its ties to company strategy, and the distinctions between public and private equity-backed boards.

0:00 -- Intro.1:10 -- About new podcast sponsor American College of Governance Counsel.2:28 -- Start of interview.3:17 -- Joyce's "origin story" 5:22 -- Joyce's academic focus and executive career before joining boards of directors.8:12 -- On her board journey. "It began with non-profit board work." On serving in different types of boards. "They all offered an opportunity to collaborate with board colleagues, very smart people - learning from them, with a clear focus on growth of the institutions through innovation and being intentional about them."11:15 -- On the state of agtech. 13:54 -- Her experience serving on the board of Sunrise Banks, and more generally on the board of a Certified B Corporation.19:54 -- On the ESG and DEI backlash. "Politics is part of the system in which corporations operate."25:51 -- Her take on the current state of board diversity.33:43 -- Opportunities in Africa. 39:19 -- On the current geopolitical landscape, particularly with the U.S. decoupling/de-risking from China. Impact on global supply chains. "Near shoring, and on-shoring are critical (instead of investing in long supply chains)."45:33 -- How should corporate directors approach AI technologies.50:08 -- Book that has greatly influenced her life: Of Mice and Men by John Steinbeck (1937)51:38 -- Her mentors, and what she learned from them: her mother, dad and Robert "Bob" Bucklin (her former boss at Rabobank International).53:45 -- Quotes that she thinks of often or lives her life by: "There is no failure, only lessons."54:40 -- An unusual habit or an absurd thing that she loves: white water rafting and classical music.Joyce Cacho is an experienced executive and director, and currently serves as Board Chair of Sistema.bio.__This podcast is sponsored by the American College of Governance Counsel.__ You can follow Evan on social media at:Twitter: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__You can join as a Patron of the Boardroom Governance Podcast at:Patreon: patreon.com/BoardroomGovernancePod__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

Suzanne Brown, executive leader and member of the NYSE Board Diversity Initiative, discusses key ESG initiatives, international directors, board dynamics, and the evolution of board diversity. They also touch on the backlash against ESG and DEI efforts, the average age of directors, and the current state of capital markets.

0:00 -- Intro.2:02 -- Start of interview.3:02 -- Victor's "origin story" 5:30 -- Joining Stanford University's Board of Trustees, and later the board of Popeye’s Louisiana Kitchen (NASDAQ: PLKI).9:06 -- His current position as Managing Director and Practice Leader, Consumer and Retail at Diversified Search Group, working primarily in the Board of Directors practice. He is the leader of the firm’s Dallas-Fort Worth office.9:53 -- Differences between executive and board searches. "We find people for jobs, not jobs for people"13:01 -- The role of data and automation in the search business.14:48 -- Distinctions between board searches for private and public company boards.17:27 -- Economics of search firms on executive and board placements.20:15 -- On working with Nomination and Governance Committees and the evolution of Board Matrices. On overboarding. On board expertise: cybersecurity, digital, legal, international, etc.28:38 -- Boardroom trends in 2023: Flexibility on C-suite experience, broader demand for specialized expertise (cyber, AI, ESG, etc). On the ESG and DEI backlash. "Companies are looking for supply chain expertise." On geopolitics in the boardroom.32:36 -- What are boards looking for in new directors. "They are looking for really strong core values: integrity, ethics, leadership and judgment." How to build your brand as a director. Functional expertise. "Search firms probably fill 30-40% of open board seats, that tells you that 60-70% are done the old-fashioned way (ie. by other members of the board)."37:35 -- Recommended resources for board members or aspiring board members. Latino Corporate Director Association (LCDA).39:30 -- On boardroom diversity and the state of Latin@s on corporate boards.42:17 -- Measuring effectiveness of board members.44:40 -- Books that have greatly influenced his life: Built to Last, by Jim Collins and Jerry Porras (1994).The Haj, by Leon Uris (1984)The Empire of the Summer Moon, by S. C. Gwynne (2010)46:17 -- His mentors, and what he learned from them: Art Gonzalez (president of the first bank that he worked at)Jerry Porras (Latino Action Business Network)48:35 -- Quotes he thinks of often or lives his life by: "Keep your friends close, and keep your enemies closer." 49:07 -- An unusual habit or an absurd thing that he loves.49:43 -- The living person he most admires: Pope Francis.Victor Arias is a Managing Director and Practice Leader, Consumer and Retail at Diversified Search Group, working primarily in the Board of Directors practice. He is the leader of the firm’s Dallas-Fort Worth office.__ You can follow Evan on social media at:Twitter: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__You can join as a Patron of the Boardroom Governance Podcast at:Patreon: patreon.com/BoardroomGovernancePod__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. *reference to our episodes reviewing Succession Season 1: E98 of this podcast (May 22, 2023) and Season 2: E102 (June 26, 2023).2:00 -- Start of interview. 3:50 -- About Sean Berkowitz and the Enron Case: prosecuting Ken Lay and Jeff Skilling (2006).7:05 -- On whistleblowers and avoiding retaliation. "Whistleblowers are one of the trickiest things you can deal with as counsel representing a corporation."11:05 --  Kendall's whistleblower scenario. Conducting internal investigations.15:02 -- On government relations and political interference with federal investigations. "It essentially doesn't work." "The discretion and judgment of a line prosecutor is always going to rule the day."17:22 -- Cooperating with Federal investigations. 21:12 -- The role of the board of a public company under federal investigation.22:52 -- On "shifting to legals", internal investigations by outside counsel, and creating a special committee of the board to remove conflicts of interest.29:16 -- Explaining joint defense agreements. The Archer-Daniels-Midland case (reference to movie The Informant).33:34 -- On the link between good governance and how shareholders value the company, including activists (Josh Aronson scene) and the proxy battle.43:36 -- On sexual harassment complaints (situation between Roman and Gerri involving explicit pictures). The factor of CEO succession and how the board should conduct their selection.50:30 -- On potential GoJo red flags and need for due diligence, including leadership assessment and kicking the tires on their numbers. What could/should board be doing in this situation?55:33 -- Dealing with moguls and founders like Lukas Matsson. "I think that one of the elements at the heart of corporate governance is personal integrity and character... and Matsson is not a good guy."59:49 -- Family governance within public companies. "Ultimately it all comes down to the documents: who can vote what, who has control, who has the ability in a tie break, etc." The problem with "rubber stamping boards." Question: "would any of us invest in a company run by Kendall or Roman?"01:06:11 -- Kendall's Unreliable Testimony to the DOJ ("Queen for a day" opportunity) and Preparation Failure.Kate O'Leary is the Global Executive Litigation Counsel at General Electric Company.Sean Berkowitz is a Partner at Latham & Watkins and the Global Chair of the Complex Commercial Litigation Practice. He represents clients in complex litigation and regulatory investigations.__ 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.(1:35) Start of interview. *Link to our first episode: E6 from June 2020.(2:18) On the origin story of her new podcast: The Startup Solution with Heidi Roizen. (4:23) The Case of the Boardroom Blow-Up.  How entrepreneurs should go from 'pitching' to 'partnering' with their investors. "Entrepreneurs get stuck in pitch mode." On terms "happy ears" and "jazz handy." On the golden rule of the boardroom: no surprises. "A board meeting should be a working meeting, it should not be a performance." On "Boardzillas."(15:55) What should entrepreneurs know about how VC funds works? On VCs wearing two hats in the boardroom (as a board member and as an investor). On the Trados case and the Rule of Common Maximization.(19:42) The Case of the Downer Round. On the preference stack and nuances of venture financing. On "structured terms" or "dirty terms." "When an entrepreneur trades structure for valuation, they are almost always giving downside protection in order to get more of the upside." [Heidi's more detailed blog post on down-rounds. Take by Janelle Teng]. On the pendulum of influence from founder-friendly to investor-friendly.(33:00) On secondary transactions of private company shares. On reasonable and/or rational options. On removing founders. "Inside a market there is always is a sub-market, and right now generative AI is very hot."(41:51) The Case of the In-Law Investors. What to consider when doing an angel investment. "When anyone asks me whether they should make a seed investment, I tell them to do so only if 1) they can do so with money they can afford to lose; 2) they don’t mind tying up those funds for seven years or more (it's an illiquid investment); and 3) they have enough additional money to put about 30-40% more in a future round if the opportunity or need arises. More importantly: founders should consider how they would feel if 'family & friends' lost the money as a result of their startup failing. (45:26) The Case of the Strategic Sucker-Punch. The difference between a strategic investor (corporate venture capital investor) vs a pure venture investor: the latter only makes money by buying the stock low and selling the stock high while the former also makes money if its stock also goes up. "They are called strategic investors for a reason: they are using investment dollars to drive strategy that should be additive to their strategy."(49:07) On best practices with board observers. ROFRs.(51:07) On the role of independent directors in startups. Promoting diversity in startup boards. Fred Wilson (USV)'s board diversity proposal.(57:44) On cross-over and PE board governance and cultural distinctions with VC.Heidi Roizen is a venture capitalist, corporate director and ‘recovering’ entrepreneur. She’s a partner at Threshold Ventures__ You can follow Heidi on social media at:Twitter: @HeidiRoizenLinkedIn: https://www.linkedin.com/in/heidiroizen/ The Startup Solution: https://threshold.vc/podcastThreshold VC: https://threshold.vc/   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.1:38 -- Start of interview.2:26 -- On the origin story of their latest book: "The Art and Practice of Corporate Governance." 7:32 -- About the Boeing 737Max case. The cultural shift. "Safety was just a given."12:29 -- About Netflix's "Radical Transparency in the Boardroom." Reference to their 2010 case study "Equity on Demand, the Netflix Approach to Compensation." 18:37 -- On the question of CEOs moving up to the Chairman position, (the role of Executive Chairman).22:39 -- On the evolution of CEO compensation, Say-On-Pay and CEO-to-worker pay ratios.27:06 -- On the practice of awarding "mega grants" to CEOs (particularly with founder-led tech companies, emulating Elon Musk's Tesla case).30:42 -- On compensation issues regarding the recent SVB and other bank collapses. "Incentives are more than just the dollar value."35:11 -- About the "epic misbehavior at Uber", unicorns and other private venture-backed company governance issues.42:42 -- On the double-edged sword of CEO activism. 45:05 -- Engaging employee activists. The Coinbase example. The General Counsel View on ESG Risk (2021).52:35 -- On the backlash on ESG (see previous episode E50 "The Seven Myths of ESG.")57:51 -- Corporate governance topics that they are currently working on: 1) SEC overreach and disclosure, 2) DEI, and 3) What's going on at the board level: new data and insights will be released soon!David Larcker is the James Irvin Miller Professor of Accounting Emeritus at the Stanford Graduate School of Business and he’s a Senior Faculty at the Arthur and Toni Rembe Rock Center for Corporate Governance. His research focuses on executive compensation, corporate governance, and managerial accounting. Brian Tayan is a member of the Corporate Governance Research Program at the Stanford GSB. He has written broadly on the subject of corporate governance, including boards, succession planning, executive compensation, financial accounting, and shareholder relations.__ You can follow the Stanford Corporate Governance Research Initiative on social media at:Twitter: @StanfordCorpGovLinkedIn: https://www.linkedin.com/showcase/corporate-governance-research-initiative/about/__ You can follow Evan on social media at:Twitter: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__You can join as a Patron of the Boardroom Governance Podcast at:Patreon: patreon.com/BoardroomGovernancePod__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.1:21 -- Start of interview.2:10 -- Lisa's "origin story" 2:59 -- Her connection to Japan.6:29 -- Her experience in investing banking, mostly with Goldman Sachs (20-year career).15:55 -- On her board journey, and the distinctions between serving on private (VC or PE backed) and public boards.19:57 -- On Extraordinary Women on Boards, the organization she co-founded in 2017  to amplify the impact of women inside boardrooms and beyond.  "To be clear, I did not set out to start an organization, this has been totally organic." "There was just a desire for a community of peers who already had a seat at the table in the boardroom." 25:04 -- On current market conditions and impact of pandemic in boardrooms. "I think we are in a high velocity environment of tremendous change, there is a lot of uncertainty." "The remit for directors exploded during the pandemic." "What has changed most for directors is the pace of change, how do you keep up with that?"31:55 -- On the role of the board on growth and down cycles. "One of the hardest things to do when things are going well is making sure to ask a lot of (tough) questions." "There is an opportunity to institutionalize in the boardroom the role of somebody to ask the tough questions, to play the devil's advocate."36:40 -- Her take on ESG, the anti-ESG backlash and the politicization of corporate governance.42:27 -- On boardroom dynamics and progress on boardroom diversity.46:43 -- On geopolitics in the boardroom, particularly on "decoupling" or "de-risking" supply chains with China.48:52 -- Topic in her mind: thinking about the board as a team. 50:58 -- Her take on board evaluations: The good, the bad and the ugly. "You only know as much as you've experienced."53:38 -- A book that has greatly influenced her life: The Choice, by Dr. Edith Eger (2017). 54:43-- Her mentors, and what she learned from them: "I have a lot of mentors who are my peers."56:01 -- Quotes she thinks of often or lives her life by: "To live your life by design not default" (from The Decade Game by Carolyn Buck Luce) and "Define yourself by your aspirations, not your limitations" (Cathie Black).57:45 -- An unusual habit or an absurd thing that she loves.58:54 -- The living person she most admires: her sons.Lisa Shalett is a former Goldman Sachs Partner who serves as a corporate advisor and independent board director. She’s also the co-founder of Extraordinary Women on Boards (EWOB), an organization whose mission is to amplify the impact of women inside boardrooms and beyond.  __ You can follow Lisa on social media at:Twitter: @lisashalettLinkedIn: https://www.linkedin.com/in/lisashalett/Extraordinary Women on Boards: https://www.ewobnetwork.com/__ You can follow Evan on social media at:Twitter: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__You can join as a Patron of the Boardroom Governance Podcast at:Patreon: patreon.com/BoardroomGovernancePod__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