What your company actually needs from a board member – GeekWire
My whole life I’ve believed that the true judge of one’s character is what he/she does when he thinks no one is looking.
Just like most of you, I was absolutely appalled by the statement Uber board member David Bonderman made to Ariana Huffington behind closed doors. The audio belies the obvious that this was an unfiltered and reflexive statement made in the moment.
And there are no truer windows into someone’s true beliefs than when this occurs.
The statement is all the more disappointing because it came from a “captain of industry.” For all intents and purposes, Bonderman is the type of guy I/we look up to. A billionaire investor who graduated Phi Beta Kappa from the University of Washington, who has made all the right moves in his career, most recently acquiring local tech success Wave Broadband for $2.36 billion.
Such a sexist statement disappoints and deflates all of us. A part of me wishes, very hard, that maybe he meant something else. Maybe he simply meant “more talking” as in “more discussion.” And maybe he is, in fact, part of the solution of solving Uber’s sexist culture by encouraging more discourse in the board room.
In listening to the audio, I am sadly doubtful, and we will probably never really know. I hope to someday meet Mr. Bonderman and discuss.
All this made me think about a much broader question seldom discussed; the true role of board members at companies, and their indelible impact on the often difficult-to-quantify aspects of their companies’ success like culture, communication, and values.
As a board member myself in several companies (including GeekWire), non-profits, and a college, I feel truly lucky to be working with such stellar individuals all around (both other board members and officers alike), and I continue to learn from them daily.
I also feel lucky that I get to do most of this here in Seattle, a business culture with some marked differences (both good and bad) from that of the Bay Area. I, thus, posit the following three things I myself have learned as a board member, and that I advise all new board members to keep in mind during their tenure. These are the things that are not stated in any board agreement.
Consider this my secret, “what they don’t teach you at business school,” advice on board membership.
1. Everyone wants to look good in front of you.
Make no mistake, a company’s board is not merely in an advisory function but is the governing entity that can fire the CEO, give her a raise, and sign off on company strategy. It is par for the course for boards to have robust discussions about CEO and officers’ performance in closed-door sessions.
As such, all officers of the company are constantly seeking the approval of the board, both literally but also in a more general sense relating to matters of trust and credibility. Whether it is in formal closed session board meetings, or more informally over dinner or on a shared flight, the CEO and other officers are constantly looking to board members for their sense for:
- “How are things going? What’s going well? What is not going well?”
- “How am I doing? Do you trust me? How much equity do I have with all of you?”
- “Do you harbor a pre-existing position on an issue? And how hard am I going to have to push to convince you?”
In short, as a board member, you are the boss, and everyone wants to look good in your eyes. That’s real power at the top of the organization, and that power comes with great responsibility.
2. You impact culture and values more than you think
Culture starts at the top.
In the context of all that has been recently revealed about Uber’s sexist culture, Bonderman’s statement is perhaps not a surprise. A Travis Kalanick can’t exist in a vacuum.
As a board member, what you do and say — and to a great extent even who you are — has an immeasurable impact on the CEO and other officers of the company. They will follow suit, consciously or not. If you mansplain and correct a female board member, thus belying values that don’t support gender inclusion, your CEO and officers will take note of what’s granted permission.
If you give positive strokes to bad behavior, they will interpret bad behavior as supported. And while you were most likely added to the board because of your resume or a specific subject area expertise, it is your actions and behavior at tough times that have a greater influence on the company.
3. You can make great change happen
I am not referring simply to changes in organization, personnel, or product strategy. Those are givens.
But I am referring to larger social changes that may also happen to have business benefit; President Obama’s notion of “businesses doing good and doing well.”
And here I have a call to action. Issues of gender equity and greater inclusion, precisely the issues Uber has faced, are exactly the issues insightful and intentional board members can dramatically impact. It is the year 2017 and we are still failing women in industry.
Women are still second-class citizens in the workplace, earning 79 cents to every man’s dollar at the same job. There are only 24 female CEO’s on the entire Fortune 500 list (that’s less than 5 percent), and women hold only 16.5 percent of key “C-level” positions just below CEO in the S&P 500 (positions like Chief Financial Officers, Chief Operating Officers, Chief Technical Officer, etc.)
One of my recent companies, PicMonkey.com, is a profitable photo product that grew to many millions of unique users a month, which I believe was the direct result of the fact that the company composition was 50/50 male-female, with a highly female-inclusive culture. Your product is just better if you have men and women creating together.
And, in fact, recent research conducted by Credit Suisse indicates that shares of companies where women make up more than 33 percent of senior management roles had a higher average annualized return (25.6 percent vs. 22 percent) than companies with only 25 percent female managers.
The Peterson Institute of International Economics reports in a 2016 study that having at least 30 percent of women in leadership positions, or the “C-suite,” adds 6 percent to net profit margin. Still more astounding is data from Quontopian, a Boston-based trading platform based on crowdsourced algorithms, that the 80 women CEOs they followed during a 12-year study (2002 – 2014) produced equity returns 226 percent better than the S&P 500!
And here within the Seattle tech community, I frequently see evidence of many great companies getting tremendous results partly as a result of a richness of inspiring female leaders in their C-suites and management ranks. We have great female leaders in our region, working alongside great male leaders who support them and vice versa. Frankly, I think the Seattle tech ecosystem will eventually lead the way on this ahead of the Bay Area.
And we can all agree as a broader business community that we want better business results. We can also agree as a society that gender equality is morally right. And if we are to make these great positive changes happen, practically speaking, the changes need to be led by board members.
I harbor a strong belief that board members (men make up 84 percent of all board seats on the Fortune 500) must lead the change. Men are metering the oxygen. Men are currently still in control. And men in board rooms like Bonderman are still the bosses, influencers, and architects of most company cultures.
Now is the time that men in board rooms ignite further change in industry to alleviate sexism and create great gender equitable cultures, adding fire to the gasoline of a movement that other women and men have already begun.
I invite all board members out there to join me.
Previously on GeekWire: Uber board member who resigned over sexist comment is UW donor, involved in Key Arena renovation
Editor’s note: Jonathan Sposato is the chairman of GeekWire.