DIRECTORS TO WATCH: Diversity initiatives build up steam
By Scott Chase

Even as directors bemoan the focus.

Diversity — gender, racial, ethnic, age — appears on just about every list of key governance issues and concerns for public company boardrooms as we enter the third decade of the 21st century.

But making the “top five” on lists isn’t the same as achieving broad consensus on importance and, more precisely, the path toward achieving a representative balance at the table.

Findings presented in PwC’s Annual Corporate Directors Survey, published a few months ago, illustrate some of the trends affecting board effectiveness. PwC asserts that almost half of “directors (privately) give colleagues a failing grade,” the highest level ever. More than half — 56% — of directors say “investors devote too much attention” to ESG issues, up from just 29% last year.

CORNER OFFICE: Thoughts on diversity from Lonnie G. Bunch III, Secretary of the Smithsonian Institution

Throughout my career I have always been critical a museum profession that has been awash in whiteness. The lack of diversity, especially in leadership positions, means that museums have not made the commitment to their communities or to their colleagues to be institutions that grapple with our differences. In an article I wrote 20 years ago, “Flies in the Buttermilk: Museums, Diversity, and the Will to Change,” I challenged the museum profession to train, promote, and hire people of color as leaders of institutions. In Chicago [as president of the Chicago Historical Society] I had the chance to demonstrate how diverse leadership can make an organization better.

Our nearly five years of success included increased visitations and visibility, and exhibitions and programs that mattered. And our institution was being seen as a museum valued by an array of communities.

I hoped that I had opened doors at other institutions to appreciate and nurture people of color.

— from Bunch’s new book, A fool’s errand: Creating the National Museum of African American History and Culture in the Age of Bush, Obama, and Trump.

Nonetheless, PwC notes, “as the composition of boards slowly changes, more than ever, directors agree that board diversity has benefits. Large majorities say that it brings unique perspectives (94%), enhances board performance (87%) and improves relationships with investors (84%). More than three-quarters (76%) also agree that board diversity enhances the performance of the company.On diversity, the PwC survey reveals, the same trends apply. While more directors than ever say board diversity has benefits, the number of directors ranking gender diversity as “very important” dropped eight points, from 46% in 2018 to just 38% this year, the lowest level in five years. On racial/ethnic diversity, the year-over-year scores dropped by the same amount percentagewise, from 34% to 26%. A side note to all of this: More than four-fifths of all directors “reject laws mandating board diversity, including 54% of female directors.”

Perhaps the most critical metric here is general agreement that boardroom diversity improves relationships with investors.

Back in July, watchdogs noted that for the first time every company in the S&P 500 had a least one female director. Organizations such as State Street Global Advisors in 2017 and BlackRock last year unveiled policies targeted at increasing the diversity of boardrooms by withholding votes for incumbent directors. Last December, Glass Lewis issued a revised policy recommending votes against the nominating committee chair of boards with no female directors in 2019, a move that ISS will replicate beginning next month.

On the legislative front, one needs look no further than the Federal Register to see that diversity remains a hot button. H. R. 281, or “Ensuring Diverse Leadership Act of 2019,” is a bill “to amend the Federal Reserve Act to require Federal Reserve banks to interview at least one

individual reflective of gender diversity and one individual reflective of racial or ethnic diversity when appointing Federal Reserve bank president, and for other purposes.” This bill has passed the House and awaits further action. Another introduced bill, H. R. 1018, is titled “Improving Corporate Governance Through Diversity Act of 2019.”

Yet a third introduced bill, H. R. 3279, would “require the Securities and Exchange Commission to establish a Diversity Advisory Group to study and make recommendations on strategies to increase gender, racial, and ethnic diversity among the members of the board of directors of issuers, to amend the Securities Exchange Act of 1934 to require issuers to make disclosures to shareholders with respect to gender, racial, and ethnic diversity, and for other purposes.” You don’t need a weatherman to tell which way the wind blows.

It’s clear that the issue of gender, racial and ethnic diversity in the boardroom and across the workforce is not going to go away, at least not until some sort of parity has been achieved. And the drumbeat for accountability in this arena is likely to intensify, despite signals from serving directors that they have gotten the bubble on this. A review of the comments of our 11 2019 Directors to Watch: Racial and Ethnic Diversity shows a clear trend toward redefining the diversity debate in terms of the overall character and culture of the corporation, with diversity writ large as one component of a responsive and responsible architecture of sustainability and cohesiveness.

Look for these leaders and others like them, now and in the future, to continue to drive boards toward a higher level of inclusion and effectiveness.

Punita Kumar-Sinha
Director, CFA Institute, JSW Steel, Blackstone-Embassy REIT, Infosys

Punita Kumar-Sinha has focused on investment management and financial markets during her career. She has served on more than 15 boards across India and North America in the past decade and currently, she serves on the board of governors of the CFA Institute, the global association of investment management professionals, as well as other boards including Infosys, JSW Steel and Blackstone-Embassy REIT.

She previously served on the board of the Toronto listed Fairfax India Fund. She has chaired audit, investment, and stakeholders relationship board committees for companies in multiple industries. Kumar-Sinha is a managing partner of Pacific Paradigm Advisors, and was formerly a senior managing director at Blackstone and a managing director at Oppenheimer.

She is frequently quoted in the media and speaks at global conferences as an expert on emerging markets.

Kumar-Sinha has a Ph.D. and a master’s in finance from the Wharton School, University of Pennsylvania, an MBA from Drexel University, and her bachelor’s degree in engineering from the Indian Institute of Technology, Delhi.

Long-term returns are enhanced by aligning stakeholder interests: In high-growth markets — whether it is tech markets in advanced countries or most markets in developing countries — companies must balance their desire to grow quickly with establishing the foundation for long-term sustainable growth. In my experience, companies at times pursue growth at the expense of financial discipline, transparency and broader stakeholder interests. As board members, we must ask the difficult questions to ensure that managements are identifying ESG-related risks and opportunities, using leverage prudently, and reaching out to all stakeholders.

Robust processes and reporting systems should be put in place to enable boards and managements to discuss these issues. Further, boards have to encourage companies to engage proactively with all stakeholders, not just on financial metrics but also on sustainability efforts.

Kathy Hannan, CPA, PhD, Member of the Ho-Chunk Nation
Director, Annaly Capital Management, Inc., Blue Trails Software

A corporate adviser, independent director and strategist with significant operational and governance experience, Kathy Hannan is a retired national managing Partner and former vice chairman at KPMG LLP. Her governance work includes serving as the audit committee chair and on the nominating governance committee of Annaly Capital Management, Inc., board member of Blue Trails Software Holding, Inc., chairman and national president of GSUSA, executive committee of the Smithsonian NMAI, and trustee for the committee for economic development.

Hannan is a member of NACD, WCD, AICPA, and Illinois and NYS CPA Societies. A frequent speaker on leadership, diversity, and ethics, she is as an advisor to the Higher Learning Commission. A Native American, Hannan is a previous presidential appointee to the National Advisory Council on Indian Education.

Homogeneity increases the risk of endogeneity: Today’s increasingly dynamic, and challenging global markets demand that boardrooms have a diverse skill set and perspective around the table, one that is comfortable with complexity. A heterogeneous complement of directors will ensure that the potential for exceptional governance is maximized and protects against endogeneity and self-selection in the boardroom. It is every board member’s responsibility to help create that diverse board environment which is comfortable with ambiguity and disruption. Individually, directors must also be curious continuous learners. Understanding emerging market, industry, workforce and technology trends allows directors to ask those difficult yet necessary thought-provoking questions.

Ellen-Blair Chube
Director, Oil-Dri Corporation of America

Ellen-Blair Chube is an independent trustee of Oil-Dri Corporation of America (NYSE: ODC) and a member of the compensation committee.

She brings financial, regulatory and client/customer expertise to her board service. Chube is currently a partner, managing director and client service officer for the Investment Banking Group at William Blair.

Prior to William Blair, Chube worked at Ariel Investments, and began her career working in public service in Washington, D.C. She served as the staff director for the Senate Banking Subcommittee on Security, International Trade and Finance and worked on the Dodd-Frank financial regulatory reform bill.

Chube serves on the boards of the Museum of Contemporary Art Chicago, Toigo Foundation, Chicago Children’s Choir, and is a member of the Obama Foundation Inclusion Council.

In 2014, she was named one of Crain’s Chicago Business “40 under 40.” She is a graduate of both Northwestern University and Georgetown University Law Center.

Diversity must be driven by intentional choices: A mentor once told me, “Social systems recreate themselves.”

I have engaged with corporate governance from various perspectives throughout my career — as a policymaker while working in the U.S. Senate, as an investor working in asset management, and as a fiduciary sitting at the boardroom table. It is clear to me that no factor impacts the quality and rigor of governance more than the composition of the board. To prevent recreating more of the same, leaders must be intentional to ensure that racial, gender and background diversity is at the forefront, which helps avoid groupthink and addresses company blind spots.

Merline Saintil
Director, Banner Corporation, ShotSpotter

Merline Saintil is COO of R&D/IT at Change Healthcare, one of the largest, healthcare revenue and payments management software companies.

Saintil has focused her career addressing complex business challenges in variety of roles including technology, strategy, transformation, and M&A integrations and divestitures at Fortune 500 companies including Intuit, Yahoo, PayPal and Adobe.

As an independent director for Banner Corporation and ShotSpotter, Saintil serves on the compensation, audit, and risk committees where she advises on cyber-risk and technology trends. She is certified in cybersecurity oversight by NACD and Carnegie Mellon University.

Saintil has been named one of Business Insider’s 22 Most Powerful Women Engineers in the World and a Women of Influence by Silicon Valley Business Journal, and received a lifetime achievement award from Girls in Tech. She earned her B.S. from FAMU and M.S. from Carnegie Mellon University, and has completed executive and board governance programs at Stanford Directors’ College and Harvard Business School.

Cybersecurity is not just an IT issue: We are in the midst of an accelerating and daunting pace of change, especially related to technology. Directors should understand and approach cybersecurity as an enterprise-wide risk management issue, not just an IT issue. I believe the key is to get engaged and stay engaged. As the core responsibilities of a director evolve, you don’t need to be an expert or technologist to be effective in this area. The goal in an oversight role is to learn enough to ask thoughtful questions and ensure the responses you get are complete and clear. Our engagement is vital helping the companies we serve balance risk with opportunity.

Suja Chandrasekaran
Director, American Eagle Outfitters, Barry Callebaut

Suja Chandrasekaran is senior EVP, chief information and digital officer at CommonSpirit Health. Previously she has been head of information and digital technologies at global companies including Walmart Inc., Nestle S.A. and Kimberly-Clark Corporation.

Chandrasekaran serves on the boards of American Eagle Outfitters (NYSE: AEO), Barry Callebaut (SIX: BARN) and digital supply chain technologies company Blume Global. She is passionate about developing and lifting others and has a reputation as talent developer.

She is the founder of T200 - Women CXOs in Tech, focused on lifting women in technology.

Chandrasekaran exemplifies significant business technology, people/organizational leadership, M&A experience, global consumer and regulatory expertise. She is an industry expert in customer experience, digital marketing, ecommerce, omnichannel, artificial intelligence, digital platforms and scaled enterprise digital transformations.

Collaboration and inclusion of diverse perspectives for sustained value creation: Creating long term value in today’s business environment requires diversity of perspectives that stem from diverse backgrounds and areas of expertise. Innovation and progress occur at the intersection of different disciplines. This is fundamental to board excellence. Agile and collaborative boards are designed for diversity of perspectives and act intentionally to include these perspectives. Such boards are the most effective in addressing governance for today and for the longer term.

Teresa M. Sebastian
Director, Kaiser Aluminum Corporation

Teresa Sebastian serves on the board of Kaiser Aluminum Corporation as a member of the audit committee and nominating & governance committee and the board of Assemble Sound, a private music licensing company. She has spent two decades in boardrooms driving strategy, creating shareholder value, and implementing best practices.

Sebastian is the CEO of The Dominion Asset Group and previously held c-suite positions at Darden Restaurants, Valance Technologies, and Information Resources.

Sebastian also has more than two decades of leadership experience in the energy and finance industries. She is a recognized expert in governance, enterprise risk, compliance, regulations, securities and internal audit.

Sebastian is a National Association of Corporate Directors board leadership fellow and a member of WomenCorporateDirectors and Private Directors Association.

Board members must guide corporate culture: Because culture drives, among other things, brand perception and stakeholder relationships, board members must guide corporate culture. Leadership involves engaging in continuous robust conversation and examination of the current and desired state of the company’s culture, not just during strategic planning. Further, diversity is a critical element for an optimal culture that brings all thoughts, experiences and demographics of the various stakeholders into the boardroom.

Although culture was not always a focus for board members, recent approaches in governance such as ESG, CSR or the COSO risk assessment process confirm that culture is a critical factor to harvest shareholder value.

Curtis Warfield
Director, Texas Roadhouse

Curtis Warfield is an accomplished c-suite executive with experience with Fortune 100 companies such as Anthem, HCA and Humana. He is a board member of Texas Roadhouse, a fast-growing global brand.

Currently, he serves as the chief audit executive for Anthem, one of the nation’s largest health insurers, and is the founder and president of Windham Advisors, a strategic advisory firm that offers innovative business solutions for companies in the health care, business process outsourcing, and insurance industries.

Warfield was a senior executive at HCA from 1997 to 2016 in a variety of roles, with most of his tenure serving as CEO of NPAS, a health-care services company. Warfield has been profiled on the cover of Modern Healthcare and in CIO magazine.

Thinking strategically about emerging trends: Exemplary corporate governance demands strategic rigor and accountability. Management and the board must relentlessly align on the emerging future macro trends impacting the business, how strategy leverages those future

trends, as well as the mitigation plans needing to be deployed to meet financial, operational and strategic goals. In addition, all have to be perfectly aligned to the expectations of the stockholders, employees and customers. Vision, strategy, and risk mitigation execution is fundamental to ensuring the long-term success of the enterprise.

Lu M. Córdova
Director, Kansas City Southern Railroad

Lu Córdova is the executive director of the Colorado Department of Revenue. She also chairs CTEK, a global nonprofit breaking down barriers to entrepreneurship, and Corlund Industries, a diversified holding company that includes the Almacen Storage Group, providing self-storage in Mexican resorts. She is on the board of the Kansas City Southern Railroad, the largest cross-border U.S.-Mexican railroad where she chairs the company’s finance and strategic investments committee.

Córdova previously was chairman of the Federal Reserve Bank of Kansas City, president of the Techstars Foundation, and held senior executive positions at McGraw-Hill, Standard & Poor’s and Excite@Home. A serial entrepreneur founding six companies, she is a frequent speaker, recognized by Forbes, CNN and more, with numerous awards.

She holds both U.S. and Mexican citizenships.

Companies must be futurists: My passion is technology and entrepreneurship which are the keys to a company’s ability to thrive. Public companies cannot afford to be complacent with incremental changes and modest operational efficiencies. Companies must be futurists, imagining the world ahead of its unfolding, not just navigating change but leading it. Colorado is embracing digital transformation in everything from cannabis to construction.

CTEK empowers rural women in the MENA to code as freelance entrepreneurs. The Kansas City Southern is harnessing technology to become North America’s fastest-growing, best-performing, most customer-focused transportation company. My strength is strategic, creative use of technology in collaboration with customers.

Vicki L. Fuller
Director, The Williams Companies

Vicki Fuller is a seasoned civic and corporate board director, presently serving on the board of The Williams Companies, where she is a member of the audit and nominating/governance committees. Additionally, Fuller is a director of Fidelity Investment’s Equity and High Income Funds and was elected to the board of trustees for Roosevelt University.

Over the past four decades, Fuller has enjoyed a dynamic financial services career which most recently saw her serve as the chief investment officer for the New York State Common Retirement Fund (CRF). Prior to CRF, she spent 27 years in several leadership positions at Alliance Bernstein.

Fuller has been named one of the most powerful African Americans on Wall Street by Black Enterprise magazine, received the Financial Women’s Association’s Woman of the Year award, named to Chief Investment Officer Magazine’s Power 100 List, and is also part of the Harvard Business School Case Collection.

Building diversity across the enterprise: Boards should strongly encourage the companies they serve to implement strategies to ensure diversity across their work force, from the most junior to the most senior members of the team. Given the variety of issues companies now need to confront and overcome in order to be successful in the markets they operate in, they will need to draw upon and leverage diversity in experience, skills, gender, race, ethnicity and age. They will be assisted in this important endeavor by the substantial body of existing and credible research that confirms that diversity results in better performing companies.

Val Rahmani
Non-Executive Director, London Stock Exchange Group plc, RenaissanceRe Holdings Ltd., Computer Task Group, Inc., Entrust Datacard, Runway

During her 28-year career with IBM, Val Rahmani served in numerous executive positions. She was general manager for the firm’s multi-billion-dollar hardware, software and services businesses. She led major efforts on outsourcing, offshoring, transformation to SaaS, and cyber-security. After IBM, Rahmani was CEO of a machine learning-based cybersecurity startup, Damballa.

Rahmani’s corporate board experience includes public and private companies: London Stock Exchange Group, a UK FTSE-30 company; RenaissanceRe, a Bermuda-based reinsurer; Computer Task Group, a Nasdaq-listed technology services firm; Entrust Datacard, a private trusted identity and secure transaction provider; and Runway, a social media startup. She chairs a compensation committee and sits on audit, risk and nomination committees. On a previous board she chaired the innovation committee.

Rahmani has a DPhil and M.A. in chemistry from Oxford University, UK.

Constant change: The best companies don’t fear change, they drive it. They are always looking for new opportunities and analyzing new and evolving risks. And the best boards bring a diverse set of backgrounds and skills to help the executive team as they balance new geopolitical

situations, regulations, and technologies, alongside new demands from clients and employees, with the need to maintain a well-governed and trusted business. Integrity, governance skills and collaboration are essential, but so are energy, passion, ambition for the company and some

personal humility. Keeping on top of change and finding the right balance is tough, but very rewarding.

Anjoo Rai-Marchant
Director, SciArt Software, Inc.

Anjoo Rai-Marchant is a board director, investor and an enterprise SaaS/cloud software executive with experience building and scaling global businesses with technology.

Rai-Marchant has served on both corporate and nonprofit boards for the past 10 years and currently serves as the independent board director at Sci-Art Software, Inc., a generative design technology company for the enterprise market.

Her experience includes large multinationals (EY, Barclays) to start-ups working in Europe, Asia and the United States. In her last operational role, she led a SaaS company’s strategic pivot doubling growth year-over-year and raised venture capital, ultimately resulting in a successful sale/exit.

Rai-Marchant has an MBA from the University of Chicago, is a CPA (inactive) and was selected as a Chicago Business Leader of Color by Chicago United in 2017.

Creating trust leads to better dialogue: Trust and open dialogue are key components of an effective and engaged board. This is the same concept for any effective team whether it is the management team, technical team or the board. It is important to build a culture and strong working relationships within the board where the CEO and directors can raise difficult issues and have meaningful dialogue with multiple points of view. This allows the board to be proactive in addressing challenges and effectively support the company in its objectives.

Directors & Boards’ 2019 Directors to Watch: Racial and Ethnic Diversity highlights accomplished public company board members, and is made possible in part by the support of KPMG, Diversity in the Boardroom, a board diversity consulting firm, WomenCorporateDirectors Foundation, a global organization dedicated to advancing the careers and contributions of women directors, and many others.

To nominate a “Director to Watch” for inclusion in Directors & Boards, please send your candidate’s name, current primary public company corporate and board positions, contact details for your choice, and a sentence or two on why you believe this person is a “Director to Watch” to Scott Chase at

2019 Fourth Quarter

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