SPEAKERS: Nancy Bruns, seventh-generation owner and chair, Dickinson Family Holdings Company; Kathy Mazzarella, chairman, president and CEO, Graybar Electric Company Inc.; Laura Pearson, Deloitte Private U.S. family enterprise leader and partner, Deloitte Tax LLP
Laura Pearson: How can boards build the right composition and culture to contribute meaningfully to strategy?
Kathy Mazzarella: When I took over about 14 years ago, we changed how we thought about board composition. We developed a skills matrix and made sure there were specific competencies and capabilities represented on the board. It was no longer tenure-based or role-based.
We have all the functional areas represented — finance, IT, HR and others — but we also make sure the people on our board can think on an enterprise-wide basis and make decisions from that perspective. The broader their background within the organization, the better.
We view having an internal board as a strength because we have deep industry knowledge and deep company knowledge. At the same time, we regularly review ourselves against outside standards and best practices. Every board member is required to participate in outside training, and every board member is required to serve on an outside board, whether for-profit or nonprofit.
We also bring outside experts into the boardroom. We have regular educational sessions with cybersecurity experts, AI experts and others to make sure we stay current on emerging issues. We want the board to continue learning and challenging itself.
Nancy Bruns: Our board did not start out as a strategic body. It was originally a management committee made up of three family members, one from each branch of the family, and they were focused largely on day-to-day matters.
I began asking questions about where we were going and whether we were thinking strategically enough. Then the financial crisis came and we had a number of concentrated positions that created significant losses for the family. That became a catalyst for change.
We created an investment committee and brought in an outside financial advisory firm. That investment committee became the strategic-thinking group of the family and worked alongside what eventually became our board.
Over time, we expanded the board, brought together different generations and added an outside director. Having that external perspective has been tremendously valuable. It gave us an objective voice in the room and helped us think more strategically about where the enterprise should go next.
Laura Pearson: How can boards create a more effective process for strategic planning?
Kathy Mazzarella: We used to conduct a strategy review once a year. What we found was that it simply didn’t keep pace with the rate of change. Now we review strategy quarterly. That change has improved accountability because somebody has to report on progress against the strategic objectives every quarter. It also allows us to be more agile.
The world is changing too quickly for annual discussions to be enough. Whether it’s geopolitical developments, regulatory changes, energy issues or technology shifts, things are evolving constantly. The quarterly process gives us an opportunity to introduce new topics, assess emerging developments and make adjustments when necessary.
One of the biggest benefits has been around acquisitions. In many companies, a deal gets completed and then everybody moves on. We now review acquired businesses against the original objectives on a regular basis. We ask whether we’re getting the results we expected and whether adjustments need to be made. That discipline has made our strategic process significantly stronger.
Nancy Bruns: We’ve gone through a cultural shift around strategy as well.
For a long time, the mindset was, “If it isn’t broken, don’t fix it.” There was a tendency to preserve what we had rather than think about what came next.
Today, there’s much more emphasis on long-term planning. Part of that comes from having younger board members who bring different experiences and different expectations.
We’ve also changed how we use meeting time. We send materials in advance and expect directors to come prepared. I don’t want to spend meetings reviewing financial statements line by line. I want people to arrive with questions. The goal is to spend less time looking backward and more time looking forward.
We talk much more about where the company is headed, what the family wants for the future and what opportunities we should be pursuing.
Laura Pearson: Where is the line between strategic engagement and operational involvement?
Nancy Bruns: I think there’s a lot of gray area.
My predecessor as chairman spoke with management every day. That wasn’t my style. I prefer to establish direction, make sure expectations are clear and then allow management to execute.
That said, our situation is unusual because we’re effectively building a new business. We don’t have a CEO overseeing all of our businesses, and I’m heavily involved in launching our real estate development activities. In that context, my role is much closer to an executive chairman or hybrid CEO position.
The key is understanding what the organization needs at a particular moment. Sometimes the board’s involvement naturally changes depending on where the company is in its evolution.
Kathy Mazzarella: One challenge for boards is becoming too comfortable. Most of us have been with the company for a long time. We know the business well. That can become a weakness if we’re not careful.
We have to force ourselves to be uncomfortable. We have to challenge our assumptions and avoid believing that because we’ve seen something before, we already know the answer.
If we go into discussions with predetermined solutions, we shortchange the company. Even if the answer ultimately works, we may never reach our full potential. Our responsibility is not simply to help the company survive; it’s to help the company thrive for decades.
Laura Pearson: What practices help boards become a genuine competitive advantage?
Kathy Mazzarella: Boards cannot simply be watchdogs or compliance bodies.
They should be helping management think strategically, asking good questions and challenging assumptions before decisions are implemented.
A board should help management look around corners. Management teams, particularly in public companies, are often focused on short-term pressures. Boards have a responsibility to maintain a long-term perspective and ensure that investments, capital allocation decisions and strategic priorities support sustainable growth.
The relationship with management is important. Management should view the board as a partner, one that provides support while also pushing leaders beyond their comfort zones.
I’ve seen this firsthand. On one board, a new CEO presented a structure with an extremely large number of direct reports. Several of us challenged him and encouraged him to think differently about it. To his credit, he took the feedback, spoke with others and came back with a very different structure. Later, he thanked us for helping him think through the issue.
That’s the role of a strong board. You’re not running the company. You’re helping leadership see things they may not otherwise see. You’re bringing different experiences and perspectives into the conversation. When boards do that well, they become a true strategic asset rather than simply an oversight function.
Nancy Bruns: For us, strategic growth ultimately comes down to reinvention. We’re nearly 200 years old, but we’re effectively building a first-generation development company. The board’s role is helping the family think beyond what has always worked and toward what will create value for future generations.
That means asking difficult questions, challenging assumptions and being willing to invest in opportunities that may look very different from the businesses that built the family’s success in the first place.
That’s not always comfortable, but it’s how long-term organizations continue to evolve.