I understand your first board stint was with Long Island lighting Company. How did you end up on that board?
My first board experience was somewhat atypical but did give me insights into what skills are needed for successful board members. In the mid-1980s, I was hired as general counsel of Long island Lighting Co. in New York. The company was building a very unpopular and hugely expensive nuclear plant. That meant I spent extensive time with our board dealing with complex and potentially existential issues. I was able to observe how a group of individuals with diverse experiences could provide valuable insights to a management team besieged by day-to-day pressures.
When I was promoted to president and COO of the company and was offered a board seat, it was a natural transition to join a group I had observed for nearly four years.
What did you learn from that first appointment?
The takeaway from that first board position for anyone seeking a board seat is to find every possible opportunity to observe a real board in action. Try to understand what works and doesn't work. If you are an up-and-coming executive, volunteer to make presentations to your board. The more challenging the issue, the better the learning experience. Observe the difference between the role of management and the role of the board. Good boards understand their role is to provide advice and counsel but ultimately, management must make the decisions. This can be a hard lesson for “Type A's” that populate many boards. They are on the board because they have been wildly successful in their chosen fields. As board members, they are expected to bring that expertise to the table. But at the crucial moment of decision, those “Type A's” must back off and participate in a collaborative way with management.
Having been on seven Fortune 500 Boards, is there one thing that stands out as the key factor that makes for a great board and a great company?
Great companies have a mission that inspires their employees, their customers, their myriad constituencies and their investors. The inspiration is more than just being financially successful. It must motivate people to give their best efforts every day. Similarly, great boards are populated by individuals who buy into the company's vision. It can't be the prestige of being on a brand name board. It can't be the great contacts you'll make or they fees you'll receive. It can't even be the satisfaction of using a lifetime of skills to help a company. The best boards share a deep and abiding belief that the mission of the company will make a difference for all of their constituencies, whomever they are.
How do you decide to sit on a board? What goes into the thought process? Have you turned down board appointments? Why?
I have turned down board positions. You have to ask yourself several questions when considering a position. First, do you understand the mission of the company and is it something you can get excited about? Second, is it a company whose values are consistent with yours? Third, be brutally honest with yourself, are your skills what the company really needs. Fourth, do you have the time to devote to board work — the demands on board members have increased in recent years? Finally, would you be a good fit with the culture and personality of the board?
What mistakes have you made as a board member early on and what did you learn from those mistakes?
The good news for me was that at a relatively young age I had already been on several boards. The bad news was that I felt like I had to show that I deserved to be on those boards. Rather than listen more and talk less, I mistakenly thought the more I talked, the more I contributed. But when I watched board members who seemed to have outsized influence, they were almost always the last to opine and the first to acknowledge the validity of conflicting opinions. I hope that I have become a much better listener during my 30 years of service on multiple boards.
Given you were an officer in the Navy nuclear submarine program, do you see your military experience as having added value to your work on boards?
Most people think the military is the ultimate home of command and control leadership style. And, of course, there are many times where a successful command and control style can make the difference between life and death. The reality, however, is how we described submarine patrols in the Cold War — “hours and hours of boredom punctuated by moments of sheer terror.” Most of the time, the military is built on teamwork and mutual support. While there is always a hierarchy, there is a deep understanding that everyone plays a vital role in the success of a mission. As a young submarine officer, I knew all of the equations that described how a nuclear reactor worked, but without my chiefs and petty officers, the pumps would leak and the electronics wouldn't work. We needed each other. It is that spirit of collaboration that marks a really outstanding board. Every board member respects what others bring to the table and as a result, the product of the whole is far better than the sum of the individual contributions.
Based on your experiences on numerous boards, what were the most successful tactics in bolstering diversity in the boardroom?
The most successful tactic is a joint commitment by the board and the CEO that diversity is a top priority. When that happens, the governance committee knows that it is just not acceptable to propose candidate slates that are not diverse. Since more and more boards use search firms, they have to be told not to serve up candidates that do not support the company's diversity goals.
What are the key issues you are addressing now in the boardroom? Are environmental, social and governance issues growing in importance? How so?
Ten years ago, cybersecurity was almost never discussed at the board level. Today, a board meeting hardly goes by without having some aspect of cyber discussed. Another trend common on my boards is how to effectively allocate resources between the historic core business and new business models that are emerging as a result of new technologies. If the core business doesn't stay healthy, the company will not have the resources to compete in whatever new business models emerge. If investments in new businesses lags to support the traditional business, the company risks waking up one day to find it woefully behind the development curve.
With respect to the industries I am involved with,environmental, social and governance issues are table stakes. They have traditionally been important considerations and will be even more visible in the future.
How do you prepare for board meetings today given the never-ending business disruption and digital transformation?
Board preparations have evolved from very episodic to a much more continuous process. When I first started board work, you received materials prior to a board meeting. You read it, went to the meeting and then started the cycle a month or two later. Today, with the whole array of technologies and the 24-hour news cycle, board work has become far more continuous. It is not day to day, but the frequency and type of communications continues to evolve.
What advice would you give to someone looking to land their first board seat?
Do your homework. Identify your skills that are currently needed on boards in today's business environment. Research companies that may need those skill sets. Look for companies whose mission and vision are compelling for you. Look at the composition of those boards and identify direct or indirect connections you may have to board members. Get to know search firms who are specializing in board searches. Let people know that you are interested in finding the right board seat.
— As told to Eve Tahmincioglu
To find out about being featured in this section, please contact Eve at eve@directorsandboards.com.