The following is an excerpt from a conversation that took place at MLR Media’s The Private Company Governance Summit 2025.
SPEAKERS: NANCY DROZDOW, founder and principal, CFAR Inc.; RENEE HORNBAKER, director, Freeman Company, Ausenco, Global Advanced Metals; MICHAEL MARQUARDT, director, Commonwealth Trust Company, Strategic Partnerships LLC, American Cancer Society; CEO, Epi One Inc.; KRIS MAYNARD, co-founder, former CEO and executive chairman, Essential Ingredients/Cathedral Holdings
DROZDOW: How did your current board come together, and how do you approach board composition?
MARQUARDT: I’ve chaired several nom/gov committees. And I often start meetings by saying that this is the ultimate strategic exercise because you’re determining who will be around the table chairing a committee perhaps five years from now or who will be in the line of succession for different roles on the board. That is not always easy. One of the things I say is to select directors for courage and a genuine desire to avoid groupthink.
HORNBAKER: I did not assemble the board that I’m on. I joined the Freeman Company board about 15 years ago. It’s now a 98-year-old family-owned company. And I had no experience with a family company at that time. What they said is this is a company that has been family-managed and family-led for 80 years. But we can see a day coming soon when the family is no longer the CEO or many of the other key roles in the company. And we want to have a board that can govern, that can provide the family assurance that they’re making good decisions and that can stand up to the scrutiny of the decisions they’re making.
MAYNARD: I was co-founder of the business in 1996. Our first board was not anything that was planned. We were in a dire emergency. So, my partner and I called our fathers-in-law, who became our board. We thrived as a board of mostly management and a couple outsiders, through our ESOP transaction in 2011. Then we went through a difficult time when I was thinking deeply about best practices for ESOP boards. I saw the need to transition to a board of independent directors and asked my former partners and current chief operating officer to step away from the board to make room.
DROZDOW: What enables directors to have the difficult conversations that board refreshment requires?
MAYNARD: The beginning of that is having trusting relationships, being authentic through the entire journey so they know your heart behind what you’re trying to do. They need to know that what you are trying to do has less to do with them as an individual then what you’re trying to do for the company in the future. Even in my case, seeing myself with limitations, I know that, at some point, the company is going to outgrow my skill set.
MARQUARDT: You want to treat others the way you want to be treated and sometimes it comes down to deep listening. You build trust by saying you’re going to do something and then doing it over and over again without breaking even the smallest promises.
HORNBAKER: I didn’t have to have those conversations because I wasn’t the board chair, but our board chair was bolstered by individual director evaluations that we do periodically. That information provided feedback that made it easier for her to suggest to an individual that this is the feedback that we have, and your skill sets are not as relevant now. Therefore, we believe that it’s time for us to change the composition of the board and we’re moving forward without you.
DROZDOW: How do you intentionally build chemistry on the board, especially as membership evolves?
MAYNARD: One of the things that has frustrated me at times is the lack of intentionality in terms of the chair building the chemistry of the board. I spend a tremendous amount of time on the front end with a new potential director. I want to make sure that chemistry with me is strong. But then I start to think about how they are going to play on the playground with the rest of the directors, being very intentional about the time we spend together as a board.
MARQUARDT: I served for 10 years on a private company board based in Paris and we had seven directors from seven different countries on five continents. We had not one but two board dinners each time we met, one limited to just the directors and one that also included senior management, plus a long lunch. We all became really close with one another in a way that I had not anticipated and it built a lot of trust and solid chemistry quickly.
HORNBAKER: What helps build that trust is engaging with the directors and management, so that the management team has the trust with the company. Because it’s not just the board. It’s working with the management team to help make the company a success on behalf of the shareholders.
DROZDOW: What structures and processes help ensure your board stays effective over time?
HORNBAKER: We have a great board chair who is a family member and we have several committees. We have audit, compensation/talent and nom/gov. And we have a finance/investment committee. Each of those are chaired by an independent director. We evaluate the work of the board and the committees every year, and then individual evaluations are every three years or so. We had term limits until the last meeting. Now, because the company needs directors that have history with the company, more in-depth knowledge of the culture and bigger-picture thinking, as long as you’re performing, there is no term limit.