Voices of Experience

What is the most important way in which your private company board has changed in the last five years?

There are many ways by which private company boards can evolve. They can go from being made up of insiders to a majority independent board. Or the board can move from having a particular set of skills to a collection of capabilities that is more appropriate for modern governance. We asked several directors: What is the most important way in which your private company boards have changed in the last five years?

Greater Focus on Strategy

Without ascribing to or identifying a particular board upon which I serve, the most important change is the increasing focus on strategic discussions, change management and governance. There is increasing realization of the need to be agile and flexible in responding to the ever-increasing speed and velocity of change in our VUCA (volatile, uncertain, complex and ambiguous) business world. There is a greater focus and importance placed upon succession planning at all management and leadership levels. More resources are being allocated to robust training and development programs for emerging leaders. There are more forward-thinking discussions and critical thinking analysis of scenarios to address opportunities and challenges and less time spent in board meetings reviewing financial reports line by line. Metrics for success are monitored closely. Lastly, the view about governance has shifted away from a static model to a more flexible model which can more effectively support a company’s longevity. Greater attention, thought and review of governance is taking place, and questions like “What governance does the company need to support our goals?,” “Does this process still serve the best interests of the company?,” and “Is this still relevant, effective or important?” are being asked. – Linda Bluso

Bluso is an independent director of Karpinski Engineering Inc. and Marous Brothers Construction Company.

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A Journey, Not a Destination

Change is inevitable for businesses, boards and management teams. Those that are not willing to change and adapt will ultimately underperform and get left behind. At IDEAL Industries, we have been on a journey over the past five years. The journey started with a true partnership between the board chair and the CEO. Reflecting on the past and looking to the future, a new course was charted.

Governance excellence is a continuous journey rather than a destination. We have adopted this mantra and have implemented many changes to ensure that our board meets the increasing demands of fiduciary boards and keeps up with the business. We have made changes to every aspect of the board, but none more important than the actual makeup of the board itself.  A deep assessment of the skill set that we had on the board versus the skill set that we believe we needed led to the decision to make significant changes. With a revamped board, we implemented a philosophy of continuous improvement in all aspects of board governance and board meetings, including the agenda, committee responsibilities, board charter, enterprise risk management reporting, cybersecurity reporting, company culture oversight and management’s time presenting to the board.

However, these efforts to establish a board that takes its fiduciary responsibility seriously and adds strategic value to the management team would not have been possible without the work that we have done outside of the boardroom. We have worked hard to build trust between the board and management team. It requires vulnerability to have real and deep conversations, and both the board and management need to acknowledge what they know and what they don’t know. This is the only way to ensure that everyone in the room understands that even when faced with challenging decisions or difficult conversations, everyone has the same agenda: to care for all stakeholders and make the best decision for the long-term success of the company. – Steven Henn and Meghan Juday

Steven Henn and Meghan Juday are CEO and chair, respectively, of IDEAL Industries.

The Importance of Diversity

The private company boards for which I serve as an independent director have significantly increased their diversity in terms of industry experience, functional expertise, geographical location and social networks. Building on existing experience in financial services, venture capital, law and global pharma, examples of new industry expertise include technology and specialized manufacturing while functional expertise added includes entrepreneurship, human capital management, supply chain and ESG. Board deliberations in several key areas have been enriched because of all four pillars of increased diversity. These would include comprehensive updates to strategic plans, oversight of culture and its alignment with strategy, executive management assessment, harnessing innovation, cyber risk management and crisis management. The pandemic served to crystallize what a “black swan” environment looks like and test resiliency to withstand its effects. The explosion onto the scene of OpenAI’s ChatGPT-4 and other generative AI programs last year served to clarify what an environment of innovation on steroids looks like, imposing a new sense of urgency to act. The diverse set of industry and functional expertise on boards is helping the constituent companies better navigate adoption of breakthrough new tools and prepare for a new set of challenges as well as harness the new opportunities they will bring. As I look to the next five years, the foundation of good judgment will continue to be most important, joined by intentional diversity and a whole-board learning mindset in order to bring best-in-class stewardship of the companies we serve. – Kathryn Swintek

Swintek is chair of American Bank of Investments, chair of the audit, risk and finance committee of Turtle & Hughes Inc. and a member of the finance and compensation committees of Oculogica Inc.

About the Author(s)

Bill Hayes

Bill Hayes is editor in chief of Private Company Director.


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