Boardroom Governance with Evan Epstein – Détails, épisodes et analyse

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Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

Javier Saade: From Capital Formation to Governance, plus his Top of the Game

Épisode 147

lundi 26 août 2024 • Durée 01:00:17

(0:00) Intro.

(1:15) About the podcast sponsor: The American College of Governance Counsel.

(2:02) Start of interview.

(2:49) Javier's origin story.

(4:31) The blurring lines between VC and PE. Cross-over investors, growth equity investors, and other "alternative" financing.

(9:01) On the capital formation cycle. Impact of interest-rates in capital allocation. The VC power law. New VC vehicles.

(16:00) On the rise of cross-over investors ("starting somewhere between 2013 and 2016: rise of strategic capital")

(19:34) On the rise of AI (boom and bubble): 1) algorithmic capability, 2) computing power, and 3) availability of data.

(23:06) The cases of Nvidia and Google. The analogy to the 1990s (investing in infrastructure) and increasing antitrust scrutiny.

(28:43) Explaining role and function of the Small Business Administration (SBA). SBIC, and SBIR & STTR. Industrial Policy and impact of geopolitics (ie. China).

(40:47) On his board journey and role of corporate directors.

(43:36) On "shareholder push and pull": role of institutional investors and "passive" investors. *Reference to E118 with Professor John Coates on The Problem of Twelve.

(50:18) His take on boardroom diversity. *Reference to the Latino Corporate Director Association (LCDA).

(55:06) On his podcast Top of the Game.

(56:30) Books that have greatly influenced his life:

The Road Less Traveled, by M. Scott Peck (1978)
Guns, Germs, and Steel by Jared Diamond (1997)
The Wealth of Nations, by Adam Smith (1776)
The Founding Fathers, by K.M. Kostyal (2012)

(56:49) His mentors.

(57:42) Quotes that he thinks of often or lives her life by: "Deal with it"

(57:53) An unusual habit or absurd thing that he loves.

(58:11) The living person he most admires.

Javier Saade is Managing Partner of Impact Master Holdings, Venture Partner at Fenway Summer, Operating Partner at Presidio Investors, Chairman of the Board at GP Funding, Inc., Board Member of VCheck and Global Tech Acquisition Corp. (NASDAQ: GTAC), CNBC Contributor, Executive Fellow at Harvard Business School, and host of the podcast Top of the Game.

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Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

Sonita Lontoh: On Board Culture, Innovation, and Creative Tension

Épisode 138

lundi 3 juin 2024 • Durée 53:09

(0:00) Intro.

(1:24) About the podcast sponsor: The American College of Governance Counsel.

(2:12) Start of interview.

(4:04) Sonita's "origin story."

(5:45) Her professional career, starting with a startup in the gaming industry.

(8:15) Her guiding principles for her career at the intersection of innovation, sustainability and digital transformation.

(9:30) Her roles at HP, Siemens and PG&E.

(11:00) Her board "portfolio" life starting in 2022: SunRun and TrueBlue. Advisor to Sway Ventures.

(14:02) About the NACD Blue Ribbon Commission on Board Culture (where she served as a Commissioner).

(17:00) Surprises and takeaways from the report.

(22:30) Recommendations for handling the increasing politicization in the boardroom.

(26:42) On geopolitics in the boardroom. Supply-chain vs consumer market.

(31:30) On the solar and battery industry geopolitical landscape.

(38:23) How should directors think about AI in the boardroom. "Everyday AI" vs "Game-changing AI". Use cases: 1) Back-office capabilities, 2) core capabilities, 3) front office, 4) New products and services. AI code of conduct. Use of data. Cybersecurity.

(43:51) On the impact of AI in the workplace. *reference to study by Erik Brynjolfsson

(47:09) Books that have greatly influenced her life:

The Five Levels of Leadership, by John Maxwell (2011)
Venture Mindset, by Ilya Strebulaev and Alex Dang (2024)
Last Lecture Series at the Stanford Graduate School of Business (July 2023), by Graham Weaver.

(48:06) Her mentors.

(49:22) Quotes that she thinks of often or lives her life by.

(50:44) An unusual habit or absurd thing that she loves.

(51:30) The living person she most admires.

Sonita Lontoh is a public company board director, strategic advisor, and former Fortune 100 senior executive who focuses on digital innovation, artificial intelligence (AI), and sustainability — contributing positive impact to businesses, consumers, and society.

You can follow Evan on social media at:

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Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

Jackie Cook: On the "Investor Stewardship Movement"

Épisode 48

lundi 13 décembre 2021 • Durée 53:17

Intro.
(1:19) - Start of interview.
(2:03) - Jackie's "origin story". She grew up in South Africa where she studied psychology and later got her bachelor’s degree in economics and management from Oxford, where she studied as a Rhodes Scholar. Her focus on corporate governance research started in 1998 after taking a research fellowship position at the Center for Business Research at Cambridge University under Professor Simon Deakin, that included a series of reviews of the UK company law.
(5:10) - How she continued her corporate governance research from Cambridge to Seattle, where she joined the Corporate Library in 2001.
(6:29) - On why she started Fund Votes in 2007, that focused on a new disclosure that had been required by the SEC in 2003 for the first time, on mutual-fund and exchange-traded fund proxy voting data. Her personal interest veered towards the environmental and social issues, where she did some early work with AFLCME and AFL-CIO (labor groups focused on compensation and pay disparity), Ceres (focused on sustainability) and other advocacy groups like IEHN, CPA, and others. She focused on shareholder resolution campaigns using the mutual fund and ETF voting data to evaluate how asset managers were thinking about these longer term ESG matters.
(8:35) - On Fund Votes acquisition by Morningstar in 2018. "For a long time Fund Votes was more of a lifestyle company for me, but around 2012 when say-on-pay got mandated by Dodd Frank, the data became more relevant and I invested more time and resources to build the company."
(10:13) -Her current focus at Morningstar as Director, Stewardship, Product Strategy & Development, producing some thought leadership with proxy voting data. She worked a lot with Jon Hale, head of sustainability research for the Americas at Morningstar, to integrate the systems and IP that Fund Votes brought into the platform.
(12:33) - Her latest article on how Say-on-Pay has failed to rein in CEO compensation, and how it could be used to bind climate targets to executive pay. Say-on-pay is an "untapped source of strategic influence for investors". Two positives from say-on-pay: it created more engagement between companies and investors (shining a light on pay practices), and created "new real estate" in the proxy ballot "and that's valuable."
(22:17) - On the rising prominence of ESG in corporate governance. "The big shift has been to realize that the 'E' and the 'S' factors present systemic risks. On climate change, it was the ‘unburnable carbon’ report published by Carbon Tracker (2007) that first put the issue in the mainstream for investors. The Paris Climate Agreement (2015) solidified these systemic risk matters."
(26:05) - On the increasing influence and concentration of voting power in a few large asset managers.
(29:56) - On the Exxon Mobil Proxy Contest with Engine No.1. and other strategic voting campaigns. "On the Exxon vote, the key was the support of the pension funds. Asset owners move the dial ('they are the real opinion leaders on corporate governance proxy voting'). The asset managers take their cue from asset owners."
(31:49) - On the role of insiders and dual-class shares in proxy voting, and "hidden control preventing resolutions from passing". From her article: the 2021 Proxy Voting in 7 Charts. Examples include Larry Ellison (Oracle), Mark Zuckerberg (Meta), Warren Buffett (Berkshire Hathaway), Walmart, Alphabet, Tyson Foods, etc.
(36:46) - On the rise of the Investor Stewardship Movement. "How stewardship codes, ordinary investors, investor advocacy organizations and collaborative investor initiatives have become a much more powerful force in the market."
(40:43) - On the role of directors, ESG board committees, board composition and diversity.
(44:12) - What are the issues to look out for the next Proxy Season in 2022:
1. There will be a lot of pre-season engagements and perhaps a record proportion of withdrawals. Directors will be busy!
2. Corporate Lobbying will be under the spotlight.
3. Climate Target setting (de-carbonation pathways).
4. Racial equity audits and diversity generally.
5. Pay.
(46:46) - Her favorite books:
1. To Kill A Mockingbird by Harper Lee (1960)
2. The Beauty Myth by Naomi Wolf (1990)
3. Finding Meaning in the Second Half of Life by James Hollis (2005)
(47:39) - Her (informal) mentors:
1. Rommel Roberts, peace activist from South Africa.
2. Manton Hirst, professor at Rhodes University.
(48:47) - Quotes that she thinks of often, or lives her life by:
1. "Wat jou nie doodmaak nie, maak jou sterker" (what doesn't kill you makes you stronger, in Afrikaans)
2. "Perfect is the enemy of the good" (perfection is a self-indulgence)
(49:52) - An unusual habit that she loves: reading Afrikaans police thrillers (particularly by Deon Meyer).
(51:25) - The living person she most admires: Kumi Naidoo (a South African human rights and environmental activist).

Jackie Cook is Director, Stewardship, Product Strategy & Development in Sustainalytics’ Stewardship services team at Morningstar. Follow Jackie on Twitter: @FundVotes

If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media.

You can follow Evan on social media at:

Twitter @evanepstein

Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

You can follow Evan on social media at:

To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/

Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

Aaron Wright: On The Rise of DAOs and Blockchain Governance.

Épisode 47

lundi 8 novembre 2021 • Durée 01:02:04

(0:00) Intro

(2:22) Start of interview

(3:04) Aaron's "origin story". He got interested in Bitcoin early on, and collaborated on the launch of Ethereum. He co-authored a book called The Rule of Code, Blockchain and the Law (2018). He's been constantly playing around with the technology itself and he co-founded OpenLaw, which makes it easy to create legal agreements that work with Ethereum. Most recently he's been spending a lot of time pulling together a bunch of DAOs.

(5:13) How blockchain can disrupt corporate governance.

(6:35) The history of DAOs (6:35). Dan Larimer's Decentralized Autonomous Companies (DACs) article (2013). The concept of DAOs picked up with the Ethereum blockchain. Beyond just corporations, to organizations generally. A lot of people think about blockchain as a system to transfer value in a fast way (~12 mins for Bitcoin and ~12 secs for Ethereum). But beyond this transfer of value, blockchain can also be understood as a system to coordinate disparate people with a set of smart contracts. This allows a new way to structure organizations.

(12:13) The story of The DAO (2016). "It was pretty revolutionary in terms of its objective." After the project got hacked, it led to "quite a dramatic (governance-related) decision to fork the Ethereum network." For a number of years, people had "PTSDAO", they were afraid of other hacks. "But about 2-2.5 years ago that started to change, PTSDAO began to wear off and developers began to look at this problem again." New DAO platforms and tooling emerged, the most notable example of them was Moloch DAO (it provided grants to Ethereum projects). More innovation followed, and DAOs were capable of not only giving grants but also making investments. "There has been a sort of explosion of DAOs." To put some numbers to it, "In Feb 2019 there was ~$10m in these DAO like structures with ~2,000 users, today depending on the numbers you look at, it's north of $10bn with several hundreds of thousands of users."

(20:30) His article "The Rise of DAOs: Opportunities and Challenges" (Stanford Journal of Blockchain, Law & Policy, 2021). Questions on legal frameworks for DAOs: partnerships, LLCs, new state DAO LLC laws: Vermont and Wyoming. Unincorporated Non-Profit Associations (UNAs). Wrapped and unwrapped DAOs. How to think about interests in DAOs (securities or something different like member-managed partnerships). Separating economic and governance rights. Are tradable governance rights securities? Grey zone.

(29:58) His take on The LAO (the DAO that he co-founded focused on venture investments). "This was an effort to reboot the original The DAO concept but in a compliant US law format." It's structured as a Delaware LLC, with changes in its operating agreement that waived fiduciary duties and conflicts of interests. Core decision-making was delegated to a smart contract (code). They pooled capital (in Ether), members were only permitted to purchase up to 9% of the LAO (most purchased between 1-2%). There are about 75 members, scattered around the world, chatting via discord, all decisions are made via blockchain-based voting. "It's created a hive-mind." "Instead of having a few people in charge like in a VC fund, you have a collective group." "The decision-making has been pretty great." "The members of the DAO have been able to move faster than traditional VC funds, generating a higher rate of return (still early so TBD) and better at predicting the future of the market, such as with NFTs." "A network of capital deployers"

(37:21) On DAOs' decision making (7 day voting period), rough consensus (no quorum requirement) and internal mechanisms. Faster and better decision-making (time will tell if the latter is true). Each member is provided with "ragequit" rights (automatic redemption rights). "[I]t usually happens at the beginning, when they join a DAO and they either don't have the time to participate and they feel they should, or they decide they didn't like the opportunity as much."

(41:20) - On FlamingoDAO and Non-Fungible Tokens (NFTs). Inside The LAO many members wanted to back NFT projects. A question emerged internally to either invest in the projects or buy the art. They decided to do both. In Oct 2020 Flamingo DAO was born. Now they have 9 different DAOs ("about $200m in ETH has been contributed to these DAOs", over 200 people):

The LAO (VC investments, it can invest in equity or tokens, could lead a round, draft a term sheet, nominate a board member who could be any member of the DAO - it hasn't done so yet). How people can become members (accredited investors).
Flamingo DAO (NFT projects and art). "It started with a contribution of about 6,000 ETH ($6M at the time) and now if new members want to join they are valuing Flamingo DAO's interests at over $1 billion." (in just a year of existence!)
Neptune DAO (DeFi)
Neon DAO (Metaverse). "It was opened up last week, it took 40mins to close. It's a $20 million vehicle." ("that process for a VC fund or hedge fund would take 3-6 months.").
Red DAO (digital fashion)
ReadyPlayer DAO (gaming)
Museo (NFT-native museum, art collection)
Two more in development.

(52:33) On Sequoia's move to a permanent fund, "[I]t mirrors the structure of our DAO network." The LAO operates like a DAO of DAOs (like Sequoia's permanent fund).

(53:59) His fascination with DAOs: "a lot of it is corporate governance theory at its core." "Blockchain technology is providing a laboratory to play around and geek out on corporate governance." "Maybe [in a digital world] it's better: 1) to have rough consensus voting instead of quorum voting, 2) to have a broader base of decision makers for investing instead of a few people [like in a traditional VC fund], 3) to have more flexible redemption rights instead of lock-up windows or capital calls, 4) to have people provide more capital upfront, 5) to delegate voting rights to other members (different ways to provide proxy voting).

(56:49) His favorite books:

Infotopia by Cass Sunstein (2006)
Road to Serfdom by F.A. Hayek (1944)
Fans, Bloggers and Gamers. Exploring Participatory Culture. by Henry Jenkins (2006)
The Wealth of Networks by Yochai Benkler (2006)
Code and Other Laws of Cyberspace by Lawrence Lessig (2000)

(58:02) - His mentors:

Jimmy Wales (founder of Wikipedia).
Gil Penchina (former CEO of Wikia).
When he was a lawyer in private practice he learned a lot from the litigators and corporate attorneys he worked with.
David Roon (co-founder at OpenLaw, soon to be re-named Tribute Labs)
Brett Frischman (mentored him at Cardozo Law School)

(1:00:05) An unusual or absurd habit that he loves: loves walking.

(1:00:30) The living person he most admires: his mother.

Aaron Wright is an Associate Clinical Professor of Law at Cardozo Law School; Co-Founder at OpenLaw, The LAO, FlamingoDAO.

You can find him on Twitter @awrigh01

If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media.

You can follow Evan on social media at:

To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/

Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

Jeff Thomas: "Private Companies Have Never Had More Options and Better Access to Capital and Liquidity."

Épisode 46

jeudi 28 octobre 2021 • Durée 42:42

Intro.
(1:22) - Start of interview.
(1:51) - Jeff's "origin story". He grew up in Dayton, Ohio. He went to Carnegie Mellon University for undergrad "to study engineering and play football." He graduated with electrical and computer engineering degrees, and took off to Silicon Valley. He first worked in the semiconductor industry with Altera. He later got into financial services, first with Gehrson Lehrman Group, then with SecondMarket (early player in the secondary markets for private shares, later acquired by Nasdaq) and Owler (crowdsourcing data on private companies). He joined Nasdaq in 2014 to help launch the Nasdaq Private Market. In 2016 he got promoted to run the listings team for Nasdaq in the west coast.
(4:39) - Jeff's take on Nasdaq's role and vision: "In the last 5-6 years our approach has been to create a lifecycle approach to supporting our corporate clients: 1) Nasdaq Entrepreneurial Center (early stage), 2) Nasdaq Private Market (as companies scale and need to provide liquidity to their shareholders), 3) Listings Business (for companies going public), 4) Once companies are public, we offer a number of products and services to empower their IR, corporate governance and ESG disclosure practices." Beyond this work with corporate clients, Nasdaq also operates exchanges in the US and EU, it has an investment intelligence business (indexes, sell market data) and it's a technology provider to capital markets (including market surveillance technology, AML/KYC solutions, and others).
(7:38) - Jeff's take on growth of IPOs during the pandemic (~250 operating companies have gone public in Nasdaq this year) and SPACs (there have been 495 IPOs in 2021 raising ~$138bn). "As a private company you've never had more options and better access to capital and liquidity." Private companies can raise: 1) Late stage venture capital rounds ("there seems to be $100m rounds everyday"), 2) IPOs, 3) SPACs and 4) Direct listings.
(10:13) - His take on the impact of government actions on the economy (and how they impact markets). The acceleration of digital transformation during COVID-19.
(12:39) - His take on the Nasdaq Private Market (facilitated ~$36 billion in transaction volume for ~500+ private companies) and why they decided to spin-off NPM as s stand-alone company, receiving investments from a group of banks including Citigroup, Goldman Sachs, Morgan Stanley, and SVB Financial Group.
(16:05) - The "stay private or go public" decision per Jeff: "It all boils down to the company's goals and objectives in different phases of its lifecycle." Companies go public for a variety of reasons, but some of the primary ones are: 1) to raise capital, 2) to provide liquidity, 3) brand enhancement (prestige) of being a public company, and 4) to leverage its equity as an acquisition currency.
(18:53) - His take on regulatory pressures on private markets (particularly from the SEC, as explained by Commissioner Lee's speech on "Going Dark" and problematic aspects of private markets).
(23:24) - On the rise of retail investing and "meme stocks". Zero commissions took down the cost of trading, it made trading more accessible to people. The advent and impact of social media (from social message boards to Reddit). The dissemination of information has changed the nature of trading. The SEC report on equity and options market structure conditions (October 2021).
(26:08) - On growth of ESG. "It all starts with the generational shift that is going on, from Baby Boomers to Millennials." "The new generation thinks beyond the bottom line." "People and investors are focusing on non-financial metrics for public companies (more and better disclosures)."
(29:52) - History and nature of Nasdaq's Boardroom Diversity Rule (approved by the SEC on August 6, 2021). Standard disclosure matrix and minimum diversity standards (gender and minorities) with long phaseout periods. "We received 200+ comment letters to the rule, 80% was positive. From the 20% that was negative comments, 10% said that we shouldn't implement the rule, and the other 10% said we didn't go far enough."
(34:10) - His take on crypto and blockchain technology. "We were thrilled to welcome Coinbase to Nasdaq via their direct listing." "It's really an interesting and dynamic time for the crypto markets." "It's still early innings in terms of the regulatory framework (from SEC and CFTC)."
(36:16) - His favorite books:
1. How to Win Friends and Influence People by Dale Carnegie (1936)
2. Genius Makers by Cade Metz (2021)
(37:05) - His mentor Bruce Aust (retired Vice Chairman of Nasdaq)
(38:29) - On Nasdaq's approach to technology in the boardroom: their board portal Nasdaq Boardvantage, critical for security. The Nasdaq Center for Board Excellence "offers the latest governance insights and actionable intelligence for board members and executives (board evaluations and questionnaires". The topic of ESG is very relevant for boards, and they have an advisory team that consults with boards on ESG, Nasdaq OneReport (to simplify the process of ESG data capture, engagement, oversight, and disclosure).
(40:05) - An unusual or absurd habit that he loves: From the book Extreme Ownership (Jocko Willing and Leif Babin): "The first thing I do in the morning is to make my bed." This way everyday you start by accomplishing something.

Jeff Thomas is a Senior Vice President of Nasdaq’s Corporate Services business unit. Based in San Francisco, Jeff oversees Nasdaq’s new Listings and Capital Markets businesses. He also oversees business development and relationship management for Nasdaq’s listed companies and Investor Relations Solutions' clients in the Western United States. Previously, he served as President of Liquidity Solutions at Nasdaq Private Market, where he worked closely with private companies to help them provide shareholder liquidity prior to an IPO.

If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media.

You can follow Evan on social media at:

Twitter @evanepstein

Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

You can follow Evan on social media at:

To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/

Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

Manny Alvarez: On Regulatory Challenges in Fintech, Crypto and Boardroom Diversity

Épisode 45

lundi 18 octobre 2021 • Durée 51:40

Intro.
(1:18) - Start of interview.
(1:51) - Manny's "origin story". He grew up in Oxnard, CA. He went to Cornell University for undergrad and "that's probably the first time he realized that the rest of the world did not look like Oxnard." His foray into film studies, including at Université de la Sorbonne Nouvelle, also known as Paris III.
(8:05) - His decision to go to law school.
(9:34) - His start with Sonnenschein Nath & Rosenthal's (now Denton's) SF litigation practice. Later, his experience at the California Department of Justice (Consumer Law Section). His time with the Consumer Financial Protection Bureau (he was an enforcement attorney between 2011-2014). That was his first experience "building something."
(14:38) - His time with Affirm (31st employee and first attorney). He was there between 2014 and 2019.
(15:19) - His decision to leave Affirm to be appointed as the new Commissioner of the California Department of Business Oversight (now Department of Financial Protection and Innovation). The Department oversees the operations of state-licensed financial institutions, including banks, credit unions, money transmitters, issuers of payment instruments and travelers checks, and premium finance companies.
(20:30) - His take on "fintech": "A lot of people use this term [fintech] as a noun, but I think of it more as an adjective that describes an ethos that embraces the democratization of financial services." Fintech also encompasses ubiquity ("meeting the customers where they are"), the increased computing decision-making power (larger data-sets), and interoperability.
(26:49) - His take on the rise of Buy Now, Pay Later (BNPL). "In the early days of Affirm that term did not even exist, what was used was point of sale."
(32:07) - His take on the rise of crypto through a regulatory lens. "Think about functional regulation." e.g. Store of value ≠ money transmission ≠ smart contract features, etc. "It's important to articulate what function you're worried about, define the activity and figure out who has the authority to regulate that specific activity."
(37:27) - His take on how some in the private sector have proposed new regulatory frameworks, e.g. Coinbase's "Digital Asset Policy Proposal" or Andreessen Horowitz's "How to Win the Future" housed in their new web3 policy hub: "I think the self-regulatory approach and proposals put forward by private actors is smart and practical." "If for no other reason it forces a conversation between the company and the regulator." "It ought to be adopted by more companies in newly emerging spaces." "It shows a modicum of good faith [and transparency] by companies."
(41:39) - On the creation and purpose of UC Hastings Center for Business Law Roundtable on Financial Policy & Regulation.
(43:18) - On Board Diversity (California's SB-826, AB-979), Nasdaq Boardroom Diversity Rule.
(46:14) - His three favorite books:
1. One Hundred Years of Solitude by Gabriel Garcia Marquez (1967)
2. The Sound and the Fury by William Faulkner (1929)
3. The Invisible Man by Ralph Ellison (1959)
(46:47) - His mentors:
1. His mom, who taught him grit.
2. Gary Hernandez, former partner at SNR Denton (formerly Sonnenschein)
3. Paula Boggs, musician and former GC at Starbucks.
(49:08) - Quote that he thinks of often, or lives his life by: "I love mankind... it's people I can't stand." (Linus Van Pelt of Peanuts)
(49:45) - An unusual or absurd habit that he loves: he wakes up at absurd hours but he relishes those early morning hours.

Manny Alvarez is a financial services executive and former regulator committed to increasing access to financial literacy and technology, protecting consumers from harmful practices, and engaging under-served communities.

If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media.

You can follow Evan on social media at:

Twitter @evanepstein

Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

You can follow Evan on social media at:

To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/

Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License

Kendrick Nguyen: "There is No Question in my Mind that Retail Capital is Coming to the Private Markets."

Épisode 44

lundi 27 septembre 2021 • Durée 58:33

Intro.
(1:11) - Start of interview.
(3:04) - Kendrick's "origin story". He was born in Vietnam and grew up in the Bay Area. After law school he worked at Goodwin Procter for a couple of years before taking a position in-house for a large fund-of-funds (Permal Group) in NYC. He then worked at the Stanford Rock Center with Joe Grunfdest. After Stanford, he joined AngelList as the GC, and launched Republic in 2016.
(4:37) - On the origin and mission statement of Republic. In 2016, Reg CF allowed equity crowdfunding from unaccredited investors for the first time. The vision is that "there will be a seismic shift of consumers wanting to be investors." "We call this the ownership economy." "This will become the dominant driving force in changing VC and PE, and broadly speaking, the financial markets in the coming years."
(7:58) - The evolution of equity crowdfunding in the last 5 years. "It took the SEC 5 years to increase the cap from $1 million to $5 million in Reg CF, and $75 million in Reg A, effective since March 2021. "The first 5 years was slow, but now Republic has deployed $700 million in capital and much of it (over $600 million) came in the last 18 months."
(10:13) - International crowdfunding. The UK allowed equity crowdfunding before the US, it has been a very successful model, the cap is $15 million and there are tax advantages to invest via crowdfunding. "About 20% of all early fundraising in UK tech startups comes from equity crowdfunding."
(11:30) - Equity crowdfunding in the U.S. in 2020.
(12:28) - Republic's different platforms. "Republic is as much a legal tech company as it is a just a tech company."
(14:43) - His take on the evolution and growth of private markets: "There is no question in my mind that retail capital is coming to the private markets." "There will be many changes, mimicking changes in society." "This will give rise to a new multi-trillion market that will probably eclipse the size of VC and PE if you're just looking at tech."
(18:17) - How "retail capital" will impact corporate governance (where institutional investors has reigned in both public and private markets). "Private companies will soon have a lot more stakeholders, including thousands investors from the customer base."
(21:57) - How will venture capital change with the rise of retail capital. "The very top VCs (those with real value add) will remain important players, but the next cohort of VCs will need to be nimble to adjust to 1) the new forces of retail capital; and 2) other sources of capital that will enter the space." "The flow of capital will be more robust (from retail capital and high net worth capital) and it will challenge the VC market."
(26:11) - How will VC-backed companies (or retail-backed companies) change the composition of their board or their corporate governance? "One of the advantages of raising $5 million in crowdfunding from tens of thousands of investors is that it is very founder-friendly, it does not come with a board seat." "It's still very early in the evolution of retail capital to work out these details." "Retail investors (tens of thousands of customers that may only invest $10 or $20 each in the company) may care more about the social narrative, liability or image of the company than their return on investment."
(29:00) - Crowdfunding stories from Gumroad (raised $5 million from thousands of investors in 12 hours), Backstage Capital (raised $5m in exchange for 10% of the management fees and carried interest in the VC firm), Bucket List (raised ~$3m from ~30,000 investors), Robot Cache (a gaming company that raised ~$30m in a Reg A fundraising over 2 weeks) in the Republic platform.
(31:21) - Some corporate governance implications of having retail investors in the cap table in private companies.
(38:13) - How crypto has impacted the fundraising scene. Republic itself has raised ~$70 million since its founding, ~$50 million in equity and about $20 million in a token offering. Since 2018, Republicy Crypto has been on the forefront of the U.S. regulated securities fundraising in the blockchain space.
(44:44) - On the governance of Blockchains, could it disrupt corporate governance itself and thoughts on Decentralized Autonomous Organizations ("DAOs"). "[One issue] is that organizations [in my subjective experience] tend to have a group of people that have superior knowledge, dedication and drive [so the idea] of consensus decision-making is challenging. It sounds good in theory but in practice is it compatible with building a complicated organization?" "Institutional investors are still not 100% on board with crypto."
(53:05) - A recent book that he recommends: The 15 Commitments of Conscious Leadership (2015), by Jim Dethmer and Diana Chapman.
(53:25) - His mentors:
1. Joe Grundfest, Stanford Law School.
2. Naval Ravikant, Co-Founder of AngelList.
(54:15) - Quote that he thinks of often, or lives his life by: "Happiness is success."
(55:35) - An unusual or absurd habit that he loves: Sleeping in sofas, even when there is a comfortable bed!
(56:17) - The living person he most admires: there isn't one person (other than his parents). There is something to learn from everyone.

Kendrick Nguyen is the Founder and CEO of Republic, a private investing platform launched in 2016 for investors seeking high growth potential across startups, gaming, real estate, and crypto.

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Abe Friedman: "Investors Don't Care As Much About The Messenger As They Do About The Message."

Épisode 43

lundi 13 septembre 2021 • Durée 56:50

Intro.
(1:30) - Start of interview.
(2:12) - Abe's "origin story". He grew up in L.A and moved up to the Bay Area where he attended Berkeley for college and law school. After law school he went to Seattle and worked in-house for US West Communications (now Qwest Corporation). Back in northern California he joined another telecom before joining the founding team at Glass Lewis in 2003 ("the market was ripe for disruption").
(5:37) - His time as the Global Head of Corporate Governance at Barclays Global Investors (2005-2009).
(7:38) - His time as the Managing Director and Global Head of Corporate Governance and Responsible Investment at BlackRock (2009-2011). "The focus and attention to corporate governance was ramping up at that time and BlackRock was an incredible spot to be in a moment of so much change in the space."
(9:39) - On why he decided to start Camberview Partners in 2012. "Most of the people thought I was crazy. It was a big decision to take that leap." "Maybe the hardest decision that I've had to make professionally but probably the best decision in terms of what it has created in the market."
(11:45) - He started the firm because he believed that they were at a moment in the evolution of governance where companies would have to care a lot more about the institutions and people voting their shares. Two drivers: Say-on-Pay (after Dodd-Frank) and the rise of Shareholder Activism. Companies were not doing much engagement with voting teams at the big institutional investors. They needed better advice.
(19:38) - On the rise of institutional investors and their growing influence in corporate governance.
(24:28) - On the rise of stakeholder capitalism and ESG. "I think it's definitely here to stay."
(26:53) - The current state of play in shareholder activism.
(31:20) - Two issues to consider in the current market:
1. "It's very common for public companies to underestimate the extent to which investors don't care so much about the messenger as they do about the message. They care about the substance."
2. "The need for companies to change how they manage their IR strategy has never been stronger." "Most companies are still operating in an old and outdated IR model [still tailored mostly to fundamental investors, when it should address a much broader set of constituencies]."
(36:53) - On board diversity and social changes. "This has impacted the investor dialogue, including human capital management."
(41:42) - On the rise of private markets and startup governance issues. How PJT Partners has allowed them to expand their governance footprint beyond only voting (in public companies). Now they tap all investor issues (their team has about ~70 people now).
(47:28) - The books that have greatly influenced his life:
1. Crossing to Safety (1987), by Wallace Stegner.
2. The Return of Martin Guerre (1983), by Natalie Zemon Davis.
(48:48) - His mentors: his scout master (Marty Burger), his grandmother, and his former his boss at BGI (Naozer Dadachanji, who became a board member and investor in Camberview Partners).
(51:42) - Quote that he thinks of often, or lives his life by: "The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy." (Martin Luther King).
(52:54) - An unusual or absurd habit that he loves: family tradition of watching "the price is right" (while they're home sick).
(53:35) - His time as Mayor of the City of Piedmont.
(55:06) - The living person he most admires: his wife.

Abe M. Friedman is a Partner and Head of PJT Camberview, based in San Francisco. Mr. Friedman joined PJT Partners through the acquisition of CamberView Partners in 2018. Mr. Friedman founded CamberView in 2012 and served as its Chief Executive Officer through 2018. Before founding CamberView, Mr. Friedman was Managing Director and Global Head of Corporate Governance and Responsible Investment at BlackRock. Prior to that role, he served in leadership positions, including Global Head of Corporate Governance, at Barclays Global Investors from 2005 until the company merged with BlackRock in 2009. In 2003, Mr. Friedman helped found Glass, Lewis & Co. and served as Chief Policy Officer and General Counsel.

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To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/

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Priya Cherian Huskins: On SPACs, D&O Insurance and Federal Forum Charter Provisions.

Épisode 42

mardi 7 septembre 2021 • Durée 54:08

Intro.
(1:24) - Start of interview.
(1:54) - Priya's "origin story". She was born in India and grew up in Louisville, Kentucky. She went to Harvard college and studied law at Chicago Law School. After graduation she clerked for Judge Frank Magill (U.S. Court of Appeals for the Eighth Circuit, in North Dakota). She later joined WSGR as a corporate securities attorney during the dot com boom in Silicon Valley. In 2003, she joined Woodruff Sawyer to specialize in D&O insurance.
(5:42) - On why she joined Woodruff Sawyer in 2003.
(8:44) - On her experience joining the board of directors of public companies such as Realty Income Corporation, NMI Holdings, and Anzu Special Acquisition Corp I (a SPAC).
(11:26) - Priya's take on the evolution of the D&O insurance market since she started working in this industry in 2003. Current costs for IPOs, and SPACs ("the cost has gone up 4-5x in the last year or two").
(16:58) - Her response to the increasing cost of D&O insurance (particularly for public offerings).
(19:51) - On D&O insurance for private companies: "There is a cohort of carriers that will underwrite D&O insurance for smaller private companies almost on a fully automated basis, but firms come to see us when they reach ~$100 million in revenues (or typically at or after series C and D VC financings)." "Private companies do need D&O insurance, particularly if they want to attract good directors. It's important to highlight that private companies are also subject to the fraud provisions of the federal securities laws." [Note: last week, the Department of Justice announced the arrest of Manish Lachwani, co-founder and former CEO of HeadSpin Inc., a Silicon Valley-based private technology company, on charges of securities fraud and wire fraud perpetrated to raise money from investors. The SEC separately charged Lachwani with defrauding investors.] Litigation risks arise both from public enforcement (such as from the DOJ and SEC) and private enforcement (such as from shareholder litigation).
(24:11) - Her take when a wealthy individual, not D&O insurance, indemnifies directors (a la Elon Musk). "It happens more in private companies than in public companies."
(27:44) - Her take on the evolving litigation risks with SPACs (from regulators and plaintiff attorneys). "The SEC has been abundantly clear that they expect directors and officers of SPACs to do a lot of diligence." She highlights the SEC enforcement action in Ability Inc (2019). The number of securities class actions in SPACs is also on the rise. "There have been around ~110 De-SPAC transactions, and about 17% of them have been sued ["that seems high until you note that about 27% of the IPO cohort of 2018 has been sued."] There is also new litigation such as the complaint against Bill Ackman's SPAC alleging violations against the Investment Company Act of 1940 and the Investment Adviser Act of 1940, to which a group of over 60 law firms have responded ("[these complaints] are highly opportunistic, there is no question in my mind that they are hoping for a quick settlement to setup a cottage industry, and I sincerely hope that doesn't happen.")
(35:40) - Her story on the Sciabacucchi case, Federal Forum Charter provisions and what's the latest on this front ("very few IPO claims were filed in state courts in 2021: only foreign filers or some that didn't get the memo to include federal forum charter provisions"). "This is the most important thing that [I've ever done] for corporate America."
(44:07) - The books that have greatly influenced her life:
1. Born to Run (2009), by Christopher McDougall.
2. The Obstacle is the Way (2014), by Ryan Holiday.
(47:34) - Her mentors: she would like to particularly mention her partner at Woodruff Sawyer: Denise Amantea.
(49:13) - Quote that she thinks of often, or lives her life by:
1. "If you're not humble, life will visit humbleness upon you" (Mike Tyson).
2. "Pride goes before the fall" (favorite of her mom)
(50:15) - An unusual or absurd habit that she loves: watching Alaskan sled dog racing!
(51:11) - The living person she most admires: her parents.

Priya Cherian Huskins is a partner and board member at Woodruff Sawyer, a commercial insurance brokerage. She is a leading expert on D&O insurance. In addition to serving as a board member at Woodruff Sawyer, Priya serves on the board of directors of Realty Income Corporation, NMI Holdings, and Anzu Special Acquisition Corp I.

She can be reached via email at [email protected].

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