Private Company Q&A: Darcy Howe
[Editor's note: the following is an installment of our Private Company Director Q&A series. We will continuously update this section with responses from different directors of private companies covering a wide range of topics.]
Director, Heatron; Advisory Board Member, The Bama Companies
What do you look for in a company whose boards you might sit?
DH: Fit first. And then it would be cultural fit. And then, if it’s an industry that I not only can feel excited about, but I can also contribute to, in other words, I have expertise or a point of view or something that I think would be a positive contribution. I would say cultural fit is the most important.
What are your biggest challenges in executing your role as a private company board member?
DH: Consensus building. And I don’t mean issues of the business, but coming at a problem from different points of view and understanding where the others are coming from – what their experiences are that bring them to that point of view.
Senior leadership buy into the board’s authority. Sometimes there’s a question of who does the board serve? Is the board serving shareholders or senior leadership? They are not always the same.
Also, with family business, I think the biggest challenge is for the stakeholders, shareholders and senior leadership team to all be on the same page for what I call the “100 Year Plan.” That is, who is the keeper of the “100 Year Plan,” not just the strategic plan for the next three or five years. And so it is getting all of the people involved.
What makes private company board service different than public company board service?
DH: The biggest opportunity is nimbleness. For private companies, they don’t have the same set of public eyes and regulations that public companies might. There’s an opportunity for consulting and advisory. There’s an opportunity for mentoring that might not be as much so in a public company. I think those are the positives. The negatives may be, if you look at it at a per-hour basis, the compensation isn’t there relative to a public company. But if you look at it from a more holistic approach in staying engaged in business and having an impact, I think private company board service has a greater potential to have an impact on the business.
Tell us about your first board experience. How have things changed for you since then?
DH: My first board experience I was the only non-engineering voice on the board. And so at first it was sort of difficult to understand the language and the culture of an engineering firm. The positives I saw right away, which is, I looked at the world in a different way than others on the board. I saw the positive contribution right away. I am grateful to the CEO and the team who put me on the board because they saw that the vision of that possibility more than I did.
How should a private company go about assembling a partially or mostly independent board?
DH: Use the rigor of a public company process. Which is to use a board matrix for competencies. What does the strategic plan say that the company wants to do? And then filling out a board matrix of competencies to help them get there.
Top 3 reasons not to join a board?
- For the money
- Because you want to dig into the weeds of the company – nose in, fingers out
- Lack of cultural fit with the board
From the Archive: Q&A with Joseph, B. White, James F. Towey Professor of Business and Leadership; President Emeritus, University of Illinois