Sound-Up Governance – Details, episodes & analysis

Intro Transcript:

Hi, this is Matt Fullbrook with a bit of a first for this platform. Today, I’m sharing with you a full episode of SOMEONE ELSE’S podcast. It’s called Policy Crimes, and it’s hosted by a dude called Tristan Markle. The first season of Policy Crimes explores the question: what does homelessness cost? Through interviews with some super interesting experts and academics, Tristan discovers that the answer – financially, socially, politically, and more – is waaay more interesting and complex than you might think. But… in my opinion, at least, the complexity points to some important conclusions. I’ll let you explore those for yourself by listening.

The reason Policy Crimes is relevant to the Ground-Up Governance world is that homelessness provides a deep and provocative case study for a constellation of decision failures. Failures that happen in the face of decisive data, unnecessary and extravagant spending, and human suffering. Exactly the types of errors that we hope to avoid through good governance in the boardroom. Have a listen through and see what lessons you can take away.

I should also say that Tristan and I met, and have been close friends since we were 8 years old. We’ve done so much together and know each other so well that it could fill a whole other podcast. Speaking of which, stay tuned to this space because Tristan and I are going to put out an episode of us interviewing each other which will get posted here soon. In the meantime, you can learn more about the work Tristan and his cool team are doing by heading to srocollaborative.org and even doing a super nerdy technical dive on Google Scholar into his past work on cure and vaccine for HIV/AIDS. For now, check out episode 1 of Policy Crimes where Tristan interviews Professor Dennis Culhane from the University of Pennsylvania. If you enjoy the show, please take a second to subscribe and spread the word.

CLICK HERE for a full episode transcript

A new long-form scripted podcast episode where Matt Fullbrook discusses the shortcomings of board evaluations and shares some new ideas to improve on the status quo. The argument builds on practical experience, academic research, and an analogy to modern music production.

Full transcript available at https://groundupgovernance.substack.com/p/bonus-board-evaluations-dont-workbut

TRANSCRIPT:

MATT VOICEOVER

Welcome back to Sound-Up Governance. My name is Matt Fullbrook, and when I left off last time with Andrew Escobar, governance nerd and reliable partner in exploring vaguely countercultural topics, we had talked through an exercise that I conduct with boards and executives on considering the benefits and harms of our decisions on a variety of stakeholders. Andrew had expressed some concern that focusing on harms might be distracting to boards when they're trying to drive toward a positive organizational purpose. And that's where we pick up our conversation here.

MATT

If I put this in an overly blunt way, not thinking about the harm is where boards actually get in legal trouble, because the manifestation of the actual liability in the real world - which is rare, we both know that this, especially in Canada, just doesn't really happen - but it's when you harmed somebody and didn't talk about it, where it was thoughtless harm or negligent harm or sabotage. But that basically never happens. But it's like if you say, "no, we're going to benefit these guys, not considering the downside to others," and then those people say, "well, you harmed us. We're going to sue you." As long as you could say, "no, we know and we're sorry, but we did this because of these reasons," then the courts are cool. But if you say, "shit, we didn't think about that!" that's where you're in trouble. Right. So, I agree with everything that you're saying and think that framing it as harm kind of matters. Right. Because if boards - and I know we've conditioned boards to be very sensitive to liability. That's the solution. Right?

ANDREW ESCOBAR

The challenge with that is that when you're focused on the harm or the downside...When you focus on that fear of doing the wrong thing, of making the wrong decision, then no decisions are ever made or easy decisions are made.

MATT

Yeah. So I wonder if it's the. If you take the combination of all of these things. So, like, we've got a purpose, we've. Got a thing that we're aiming towards. It doesn't mean that we always take the most linear path. No matter what, no matter what damage we cause, the collateral damage we cause. We might deviate a little bit from the straightest path toward the purpose, but at least we know where the gravity is. And we take time to consider the groups and individuals that stand to be affected along the path towards our purpose. Say out loud, of those who are going to be affected, who benefits, who might suffer. Does the gravity of purpose not just still pull us along? Or does fear keep us from doing anything? Do we just sort of stay still as long as we have said that we might harm somebody?

ANDREW ESCOBAR

This doesn't answer your question, but I just, I couldn't help but think of, for each decision that you make in a boardroom, ranking all of your stakeholders or constituencies and try to figure out that question of harm and benefit. And does that actually fit with our shared understanding of purpose and our way of decision making by values? That's an interesting way to think of it.

MATT

This is exactly what... So let me describe though, because I love what you're saying. This is what I try to convince boards to do. I say, hey, we just in 15 minutes heard everybody's voices, built alignment, if not agreement, around how we feel the priority of these important stakeholders should pan out in the context of this decision. The first pushback that I get when I say to them, "I believe you should do this. This is a better way to spend 15 minutes than literally any other thing you might spend 15 minutes on when an important decision is at hand, especially early on in the decision." A lot of them are just like, "we really hear what you're saying. We agree with you. I just can't see us doing that during a board meeting." I'll stop. What do you think?

ANDREW ESCOBAR

I think that where might that pushback come from? It doesn't feel like real, tangible, productive work. Maybe it feels silly to them. I think where the power might come from, it is that it's this, like, loose exercise that you can do, and that might be revealing when you do it. Sometimes when we're making decisions, we put too much structure and process around the decision. And I think that structure is important, intent is important. But if you don't also leave some time for what's unstructured. Right? Be intentional about your unstructured time. That is probably... that cannot get you good decisions.

MATT VOICEOVER

Could Andrew's instinct be on point here? You can't have good decisions without leaving room for intentionally unstructured exploration? We'll talk about that more next time. For now, reflect on your own experiences as an executive or board member, or even just someone who makes consequential decisions with other people in your life. Of course, planning and structure help, but do you also need a bit of informality to reach the best conclusion? Thanks for listening. And by the way, if you're really listening, you'll hear a bit of jankiness in today's music. If you want to know more about that and some other info on how I made the tune. Check out the notes in the post at groundupgovernance.com. If you haven't already, or even if you have, please take a second to like and subscribe and especially spread the word about the show. See you next time.

MUSIC NOTES

I mentioned this one is a bit janky. My first problem was that for a few minutes I really liked the sound of maj9 chords - in hindsight, it turned out pretty cheesy. The bigger issue came from me recording the original guitar part to a click track, but then only having time to create drums using a sequencer (no finger drums this time). Sequenced drums are super precise, like a metronome. So, it quickly became obvious that the time feel of my guitar playing was…not awesome.

I was running out of time, so I quickly re-recorded the guitar in one take, came up with a bass thing in 2 minutes and recorded that in one take and totally ignored the enduring cheesiness of basically all the sounds in this recording (especially the hilarious drum fill in the middle, which you probably can’t really hear underneath the voiceover in the outro).

Anyway, despite all that I think this one is kinda fun. I knew when I started this project that there would be some awkward music moments.

The guitar I played is the very sexy Gretsch Limited Edition Sparkle Jet. The bass is just a regular old Fender Precision. For both the bass and guitar I used some presets on the Headrush MX5. The drums are from the Teenage Engineering PO32 Tonic. I recorded and mixed this on the Teenage Engineering TP-7 and TX-6. This whole setup is the epitome of modern, compact, computer-free recording. No mics, no guitar amps, no editing. So fun.

TRANSCRIPT

MATT VOICEOVER

Welcome back to Sound-Up Governance. My name is Matt Fullbrook and this episode continues my conversation with my great friend, Andrew Escobar, who's a governance nerd, corporate director, open finance expert, and big thinker based, like me, in Toronto. I shared with Andrew an exercise that I've conducted with boards, executives and other curious people in the governance space more than a thousand times over the past 12 plus years. If that sounds like an obsession, it's because it is. I wanted to talk through it with Andrew because I feel like it's a shortcut to having one of the most important and potentially difficult conversations that boards can have. Check it out.

MATT

Despite the fact that we've known each other for a while and talked about governance a lot, you have not witnessed. The thing that I have done more than any other thing with the groups that I've worked with, which is an exercise that is boringly titled "To Whom do you Owe a Duty?" And what I do is I give them a list in alphabetical order of 10, we can call them generically stakeholders, that range from internal stuff like employees and senior management and the board to like one, circle out like shareholders and customers and community, that kind of thing, maybe a little bit farther out like regulators, and then all the way out to like the planet. And I always put "myself as a director" on the list. And I say, here's 10 stakeholders. You've got a group of, whether it's classmates or fellow directors or whatever, you have 15 minutes to rank them based on, from the perspective of a director, to whom do we owe the greatest duty through to whom do we owe the least duty? The corporation's always on the list too. And I say the only instructions I give beyond that are, I say ties are illegal, so everything has to have its own unique ranking. And I'm not going to define duty for you. If you think that's an important conversation, then you can talk about that in your 15 minutes. How confident are you in your board life that there has been implicit or, even better, explicit alignment among the people in the room when it comes to whom do we owe a duty when we're making, whether it's all decisions or this specific decision or whatever.

ANDREW ESCOBAR

I don't think that's ever been explicit. Can't think of... one, I've never done that exercise formally. But two, even if we had, I think we would have possibly arrived at different answers or some conflict on the top. But I'd like to think that, at least on the one board where I have the most experience or had the most experience, we would have probably arrived at very similar answers for those like maybe one or two spots. Because that speaks to me to purpose of the organization, purpose of the corporation. So I like that way of thinking about it because it speed runs the big question around purpose and framing it in terms of various stakeholders.

MATT FULLBROOK

When someone, and I'm sure you've heard in board contexts or classrooms or whatever, when someone says "we owe our duty to the corporation," which is fundamentally factually correct in Canada, what do you think that means?

ANDREW ESCOBAR

I think that's the correct answer, but it doesn't actually share any useful information. If I tell you that your duty is to the corporation, well then what? What does that actually mean? Alone, It doesn't actually mean much. That is a useful place to start because I think you need to square that with anything that you arrive at, like what is our purpose here? What, what are we doing? What are the decisions that we're here to make? I think it can come back to in the best interest of the corporation that is where your duty lies. But that actually doesn't provide any useful help to a new director, In particular. You've got to explore what that actually means. And it's going to be different to each board, each organization.

MATT FULLBROOK

Okay, so then the punchline of the exercise is, and they don't usually see this explicitly, but the moment that I describe it they're like, "yeah, right." Is that you can choose any pair of the of stakeholders from the list. And let's say the number one and number two most frequently are the corporation and shareholders or members or whatever, in whatever order. Most commonly those are the top two. And I'll say, "okay, well can we imagine a decision we might have to make in the real world where the long term interests of the corporation and the short term interests of shareholders might be misaligned?" And everyone's like, "yeah, and actually, yeah, we could think of thousands! Almost every time we spend money." And so I say, "great, but you choose literally any pair on the list and think of real world decisions where the interests of these pairs are misaligned with each other. You can't make a decision, there's no such thing as a decision that a board might make where everyone benefits. Right? Someone gets harmed in some way, and I don't mean necessarily like harmed in a way that they care about, But even if it's just an opportunity cost harm, there is harm. In your board experience, are we thinking both about the how do we maximize positive impact but also saying, yeah, by doing that this is the harm we're causing?

ANDREW ESCOBAR

I'm going to guess - this is a guess - that most boards don't like to focus on the harm, or maybe not even the harm, the deprioritization of certain stakeholders. But it's there. I, I don't know if that's a useful way to think about it. Right? The harm? I'd like to think that you focus on the good as opposed to the harm. But they're both like, they're both there, they're both present. With every decision you're going to make, there's going to be consequences that you either can see or not see. They might be short term or long term in nature. And you're making that conscious decision. But that is why, again, I think that for me, it actually comes back to purpose and values and like that. Maybe not full alignment, but that general understanding is important because that's how you're making decision. You actually might be a board that is prioritizing a certain constituency or stakeholder more than others. You might be optimizing for the short term and that guides your decision making. The challenge is how can you be honest about that with yourselves as a board and signal that to others. Right? Because whether that's a for profit listed company or a small, not for profit, if you can signal that, like, that helps other people make decisions, like, do I actually want to be a member of this organization? Because this is how they make decisions, do I actually want to, Should I get out of that stock? I don't like what they're doing. In terms of their short term outlook, their long term outlook. How do you signal that is important? That is your purpose, that is your values. And so there always will be both sides of it. But you're going to prioritize one or the other and it's going to always come back to purpose and values. Or rather it should.

MATT VOICEOVER

Before we wrap up, I should explain to anyone who's not familiar with the law in Canada and similar jurisdictions what were talking about here. It's true that our laws tell directors that they owe their primary duty to the corporation. If you look at the language of the laws and how they've been interpreted in the courts, what it really means is that boards need to consider the interests of all the individuals and groups that stand to be affected by the corporation's actions. Not that they must benefit all of those stakeholders, but that they can't neglect them. And that's what we'll talk about more in the next episode. If you want to know more about today's music, which I had exactly 10 minutes to create, have a look at the music notes at the bottom of the post at groundupgovernance.com thanks for listening. There's a reason why every content creator asks you to, like, subscribe and spread the word, and it's because that's what keeps shows like this alive. So what are you waiting for? See you next time.

MUSIC NOTES

It’s actually true that I only had 10 minutes to make the music for this episode. I used the PO-12 Rhythm by Teenage Engineering and made a simple beat and that’s all she wrote. If you noticed the copy of MF Doom’s Operation Doomsday on the turntable in the thumbnail photo, it doesn’t have any relevance or meaning to the music or episode. It was just the coolest looking backdrop for the photo I could find with no time to spare (i.e. 1 minute) in my office.

TRANSCRIPT

MATT VOICEOVER

Welcome back to Sound-Up Governance. My name is Matt Fullbrook. Once again, our guest is my great friend Andrew Escobar, corporate director, open finance advocate, and big thinker. In today's episode, we discuss what it takes for a director to feel empowered to be great and whether it might be a good thing for boards to be friends. Let's dive in.

MATT

What might it look like to empower any person, a person in the room, to behave like a great director instead of a not-so-great director?

ANDREW ESCOBAR

That's a really tough question. I'm trying to think of. I'm trying to think of not-so-great directors who maybe turned out to be great directors.

MATT

What could others do to make you feel more empowered, to feel like you can be curious and express that curiosity?

ANDREW ESCOBAR

Maybe I don't have another way to phrase this because I'm going back to my previous comment. Sometimes you need to be a really great editor, and sometimes you need a great editor. That, alone, I might come to a decision with all sorts of questions, but I need either a board, a system, a chair who can be a great editor for me. I think that's a, I'd say the fundamental role of a board chair, committee chair, to be a great editor. It's to curate those questions because you're not going to get maybe all the answers. And what is fundamentally the top question that we want answered? And that actually might not resolve within a regular meeting cadence. It might take us a few years to resolve. I know that I always approach board work with a ton of questions that don't go answered. I try to be my own editor, but it's almost so much more useful to rely on others to be your editor. And I think when I think of ok directors that turn out to be great directors, they found a way to be more open with their questions outside of meetings, outside of the regular structure of a board. And that's where, like, the magic happens. That's where the great questions are formulated, not always inside a board meeting.

MATT

It's occurring to me. One of the things that - this is unrelated to the actual questions here, but I think it's still worth talking about - one of the things that happened early in my career in the governance space was there was this anxiety around friendship. I'm generalizing, but we don't want directors to be pals. There's this fear that's an independence problem. If people care about each other as human beings, then they're gonna make decisions that are in each other's interests instead of whatever. And I think, first of all, I think that we corrected way too hard on that, and it introduced a level of formality to the world of boards that really worked against what you're talking about. But to what extent do you need to invest in building relationships to get this vibe that you're describing?

ANDREW ESCOBAR

Building relationships at work or on a board is not the same thing as building friendships. Those are different things. But I don't see how you can really do great work without great relationships. If that's true... If that's true, 9 to 5, Monday to Friday in your standard work hours, what would make board work or board relationships any different? There is something fundamentally different about a board who is teaming and a team who sees each other on a daily or regular basis. But I don't think that I could be a great director without having great relationships on that board. It would be... I think it's impossible. I really do. Because then what you're doing is you're approaching the problem of governance singularly. It's just you. I'm here to figure out what conditions work for me. I'm here to get answers on what I think is important for this organization, not what you as a board believe are the right questions, the right decisions. The right conditions. Like that is something collective. I don't. How do you do something collective without strong relationships? Do friendships get in the way of that? Maybe. But, I mean, I can sit down with a friend who I've known for a year or 10 years and get into a great debate, even a heated one, and still leave at the end of the night really enjoying their company and enjoying the conversation. Why wouldn't that also be true of board work?

MATT

Yeah, it's interesting. I think there's this, like, misconception, and maybe this is true for a lot of people, because the range of personalities among humankind is pretty vast. But I think we kind of imagine that with friends, it's harder to engage in conflict or call people out or escape groupthink or whatever. And I think for a lot of that range of personalities, it's actually the opposite, where the comfort level goes up to say, "no, that's stupid." Or, "you know, I don't. I really think this might be a bad idea." Or, "that really pissed me off, what you just did." Or whatever. Compared to, say, confronting a stranger like that.

MATT VOICEOVER

What do you think? Board chairs as compassionate editors, Boards as caring friends. I love these ideas, and I think they can help to turn big, complex and technical boardroom concepts and make them a bit more tangible and doable. Thanks for listening. In the next episode, Andrew and I will talk through how a board can consider the interests of all its key stakeholders in a really short time. For notes on today's music, scroll down to the bottom of the episode post at groundupgovernance.com See you next time.

MUSIC NOTES

Ever heard of “finger drumming”? Instead of me describing it, just look it up on YouTube and you’ll understand right away. For this tune I “finger drummed” on my MPC Live instead of programming a beat because I played the guitar part in the air instead of to a click/metronome. Anyway, this one’s just a simple bluesy guitar/bass/drums thing that emerged from the visceral joy of just playing an open E chord. All you guitarists out there know what I’m talking about. I used my Gretsch 6130 “Roundup” and for bass I used my Ernie Ball/Music Man Stingray 5. It was all recorded on the Teenage Engineering TP-7, which is a life-saver for someone like me who does multitrack recording while traveling.

Side note on the Roundup guitar - I’ve wanted one of these since I was a teenager. The whole over the top cowboy vibe appeals perfectly to my sense of kitsch and style. Mine was made in 2008 but I found it a couple years ago. It was the first one I’d ever seen in person. Love at first sight/sound.

TRANSCRIPT:

MATT VOICEOVER

Welcome back to Sound-Up Governance. This is the third episode of our new revamped format. My name is Matt Fullbrook, and once again our featured guest is governance nerd, open finance specialist, funky mustache sporting genius, Andrew Escobar. You might notice that the illustration of Andrew in the episode thumbnail does not include include said mustache. Sorry about that. Anyway, board composition might be the most debated topic in corporate governance. What expertise and skills should we have in boardrooms? What about diversity? Board size? independence? To me, though, the most important and underexplored question here is what makes a director truly excellent? So I asked Andrew for his perspective.

MATT

What are one or two or however many you'd like to think of? What are the specific differences between. And this can be behavioral or skill or whatever, between someone who's a freaking amazing director and someone who's just filling a seat.

ANDREW ESCOBAR

It's never their expertise or their capabilities, their past experiences. It's almost always their curiosity that is the differentiator for me between a great director and an okay director. Curiosity, I think, is fundamentally, to me what drives good governance, great decision making. You're going to approach those conditions that you've talked about with curiosity. You're going to approach purpose with curiosity. And you're not going to get stuck on any one condition or purpose or value. You'll always be questioning it. And that, I think, requires curiosity.

MATT

So I just want to make an implicit thing explicit because to some people, I think they feel like as long as they're asking questions or worse, questioning everything - I think you understand the difference - that's a demonstration of curiosity. But that doesn't sound like what you're saying to me.

ANDREW ESCOBAR

Curiosity is not simply coming up with 20 questions or downloading 20 questions. Curiosity is getting answers to those questions, coming up with your own questions, having a conversation completely unrelated to your board, with a colleague or a friend. And then from that conversation, something sparks in you relevant to your board work, and you jot it down and you make sure that you follow up with that. That is curiosity. So it's not simply just having the questions, it's following through on them and getting to the bottom of the answer. Why did we do this 10 years ago? Because it's kind of impacting how we do things today. How does it shape our work now? What can we do different if we did this thing? How would that shape our results? Like, those are the kind of questions you need, but just I like to think myself, I like putting myself in the position sometimes of the receiving end of those questions. Your management team, your senior leaders, your CEO. A thousand questions aren't helpful either. You don't have time for a thousand questions. And so how do you how do you be a great editor to those questions?

MATT VOICEOVER

If you're a fan of my One Minute Governance podcast, you'll know that season four, which wrapped up in December, was all about questions that I believe boards should answer. And if you're really sharp, you'll have noticed that the questions I've been asking Andrew so far on this show have been some of the exact same ones I featured on OMG. It goes without saying that I'm delighted by Andrew's thoughts here that a director's job isn't about asking questions. Rather, a director may choose to ask questions in service of moving the board's thinking forward or finding a deeper truth, but not just for the sake of asking. In the next episode, I'll talk with Andrew about what it takes for a board to empower its directors to do the things we talked about today. You may already know that I'm creating some kind of original musical composition for each episode of this show. So as as usual, if you're interested in learning a bit more about today's music, there are some written notes at the end of the post. Thanks for listening. If you're enjoying the show, please spread the word.

MUSIC NOTES:

I sketched this one out on the Teenage Engineering OP-Z while on the balcony of my hotel room in Cancun during a rainstorm while I was at the America’s Credit Unions Board of Directors Conference. All of the drums and synths are on the OP-Z, which will be obvious to anyone who uses it because I’m using all the OG sounds. I added more bass using my Ernie Ball Music Man Stingray 5 (with rad snake-related artwork by Mathias Chau). There’s one synth lead line that I played on the Nord Lead A1. I forgot to include it in the thumbnail but the guitar is my old Fender Strat that I got as a teenager. For any guitar nerds, it’s a 1997/98 Strat Plus - the ball bearing nut version, not the roller nut - with Texas Special pickups in it.

Listening back, I realize this one is funky but probably a bit disorienting. It’b because there’s a pulse, but no real emphasis of the downbeat. If you’re having trouble, the whole thing is in 3/4 (I’m thinking of it as having swung 16th notes), the very first kick drum is “on the one” and the little shaker sound is on every “and”…or eighth note offbeat.

TRANSCRIPT

MATT VOICEOVER

Hi, my name is Matt Fullbrook and this is Sound-Up Governance. The second episode in a brand new format where we zero in for few minutes one expert's perspective on a very specific corporate governance question or topic. Once again, my guest is Andrew Escobar, an experienced corporate director, open banking expert and super thoughtful big thinker on board stuff in general. I've done a lot of reflecting over the past year on whether we might be overdoing it when we look for answers to governance questions by looking at catastrophic failures. Even if there are useful lessons and examples of failure, they won't tell us anything about what it means to do a great job at a normal board meeting. And doing a great job at a normal board meeting is really important. So let's dive right into today's question.

MATT

One of the questions that I - and this might be splitting hairs for us, like for Matt and Andrew as the people who we are, but for a lot of people it's not - which is the question is framed as how do we do good governance under normal circumstances? Like, on a regular day where there's not like a crisis or even an important decision to make, it's just a regular ass board meeting. How do we do good governance? I'll just stop. What do you think?

ANDREW ESCOBAR

I think the challenge with that is... how do you do good governance on any random day? The problem with how we approach governance today is that it doesn't feel like an everyday thing, particularly for directors. It's something that you might engage in every couple of months, maybe every couple of weeks. It depends on your cadence. But it, you don't live and breathe it for the most part every day. And we tend to approach it in very segmented ways. Right? Our, our all day board meeting is in three months. Our committee meetings are in a month and a half. And you know when they are and you're sort of working towards those very specific sets of time. And I, I'm not a fan of that. I, I'd love to see how you diffuse decision making so that it is more of a day to day exercise. It might not take up all your time, but I think the best directors are the ones who think about those decisions that they have to make on a regular, if not daily basis.

MATT

So I think there's something in what you're saying that I don't know if I've thought about in this exact way before. Are we like artificially inflating the importance of the act of governance, like, because of this occasional nature of it? Where, like, okay, well every meeting has to be a thing. Let's make sure we're...we're increasing the vibe or the feeling of importance of everything that we have to do just because we don't get a lot of chance to do this.

ANDREW ESCOBAR

Yeah, we put way too much emphasis on the time that's scheduled as opposed to everything that happens outside of that time, which really matter. That's actually, I think, often more important. If you, if you gave less significance to that structured set time, how else would you arrive at decisions? How else would you shape decisions? Like, because decisions can be shaped within a meeting. It happens all the time. And that. I think if you're going to set specific time for decisions to be made, then you should use that productively. Of course, it should shape the decision in the time, or else why are you meeting to begin with? But that probably isn't the only way to do it. There has to be other ways, because that's not how we work. We don't delegate decision making to a specific scheduled time in our daily lives. In your home life or in your work life, you don't decide these things four weeks from now. You kind of have that conversation at dinner. You have that conversation having coffee with a colleague. That's how you make decisions. And we don't approach that in the same way in board work.

MATT VOICEOVER

Okay, sure, it's pretty common to think and talk about the work of a board outside of board meetings, and even to emphasize the importance of socializing among directors and executives at board dinners and similar. But do you agree with Andrew that even this might be putting too many constraints on how boards work? Is it conceivable that the very construct of a regular board meeting might be getting in the way of effective decision making. What do you think? I personally think I do agree. Think of all the possibilities that most boards choose not to explore in the ways they work together. Most board meeting agendas are more similar to each other than they need to be. And there's often not much structure around what happens outside of the confines of formal board and committee meetings. What else might we try?

In the next episode, Andrew and I will discuss what specifically makes a great director great. A quick note on today's music, which is built around a chopped up sample from the song Grit by my band, KC Roberts and the Live Revolution. If you want to know a bit more, I've left some brief written info at the end of the post. And don't forget, since we're still really new to this format, please boldly reach out and provide me whatever feedback is on your mind. If you're enjoying the show, don't be afraid. Subscribe, like, comment and share with anyone who might be interested. Thanks for listening. See you next time.

MUSIC NOTES:

First things first, this is based on a chopped up sample of Grit by KC Roberts & the Live Revolution, a song written by amazing friend and bandmate KC Roberts. The drums in the sample are played by Austin Gembora. I’ve been listening to a lot of JPEGMAFIA and so, well, I guess I was in a bit of a chaotic headspace. All of this was programmed on an MPC Live. Other than the Grit sample, there’s a “tambourine” sound that I crafted from the synth engine on a Nord Lead AI synthesizer. I also played a bit of a bassline on the Nord.

TRANSCRIPT:

MATT VOICEOVER

Hi everyone, this is Matt Fullbrook. Welcome to a whole new chapter of the Sound-Up Governance podcast where I'll talking to big thinkers in corporate governance and learning from them about the "how" of being a great corporate director or executive. Think of it as an interview show, but broken into really focused chunks. Each episode will zoom in one person's perspective on a very specific topic and will last just a few minutes. If I can keep up the pace, my hope is to also craft original music for every single episode. It might just be a quick, fun loop or maybe something more ambitious. I won't get too hung up on polish or details, so you may have to forgive a bit of, I don't know, unpredictability. Anyway, I'm super stoked to kick off this new version of the show with my great friend, the sincerely inspiring Andrew Escobar. In addition to having some really interesting board experience, Andrew's almost like an obsessive scholar when it comes to good governance. Many of you know that I'm pretty fixated on establishing clear definitions in the corporate governance space. My professional life essentially transformed when I finally had a concrete definition of good governance. So, let's start things off with Andrew's thoughts on whether and why it might be impossible to be a great director if you can't describe what good corporate governance is in the first place.

ANDREW ESCOBAR

I think for yourself. Yeah, you... How do you do your job if you don't know what that job is? And isn't that isn't the job good governance? I'd hope so. And so if you don't know what good governance is, if you don't have that self awareness to know if "Hey, I went to the board meeting today, that was good governance." How do you operate as a board member?

MATT

Okay, but is it fair to say that you didn't have a confident, specific definition at the beginning of your...

ANDREW ESCOBAR

I probably didn't have a definition of good governance for years.

MATT

Yeah. So does that mean you did a bad job?

ANDREW ESCOBAR

No. That's interesting. No. Yes and no. There were times without that grounding definition or grounding idea that I was probably lost and other directors were lost and I couldn't ground myself or help them ground themselves.

MATT

Right. So okay, maybe then, given that, describe, and this is unfair, but try to describe the difference between that and what it's like to have a confident definition.

ANDREW ESCOBAR

If you have a confident definition of what good governance is to you, it isn't just about your work as a director, but it's about the group's work as a board. And I think it's hard to get to good governance individually. You need others to come along with you on that shared journey towards good governance. And if you don't have a good definition, if you don't have a good understanding, how can you possibly lead others towards that? Or honestly be led by others towards that direction? I think that's important.

MATT

Okay, so do you want to share your definition?

ANDREW ESCOBAR

I don't have a precise definition, although - I think you know this - I tend to go back to the definition that you struggled with and worked on for a while because it's helpful. But I think I've extended it a little bit more. Intentionally cultivating the effective conditions for decision making. But beyond those those conditions, there was something missing for me. And maybe one of the conditions, it doesn't feel like a condition, one of those conditions for me is shared values. And that's a really touchy feely word, but that is part of it. Right? The values and understanding of your role as a director of the corporation or the not for profit or the cooperative, that's really important. What are we here to do? That almost needs to be the foundation for what comes next? Like, if we don't agree on what we're here to do, then... because it isn't good governance, like, we're not here to do good governance. That's not the end goal. Good governance gets us there. But where are we trying to get to? We're here to - and it might be something that I disagree with. It might be here to solely increase shareholder value. It might be just to make an impact in the world. It might be a mix of the two. But if we agree on that, then we can actually start working on what are those conditions, what do we need to change with how we approach our decision making towards that end goal. And so I tend to think about the end goal a lot more than I do the conditions. Because it's actually, I think, the end goal where you're going to get most disagreement, constructive disagreement with directors. Not on the conditions. Right. Like, you know, should we start a meeting earlier or later, or, you know, how do we, how do we frame this? Or how do we want our minutes to... Like, those are, those are all really interesting. In the end, there's a compounding effect to all those conditions, if you get them right. But without the foundation of what are we here to do, what are our values as we approach it, you can't do much more than that.

MATT

So it's interesting you mentioned this, and we don't need to talk about this right now, but one of the challenges that I get a lot is "where does purpose fit?" And I'm just like, well, it's like the most important condition, right? It's still, to me, it's a condition. It's like why we're here to... If the governance part is decision making and we don't know what the decisions are for, then that's an important condition. Right? It's like defining the problem carefully and making sure we all agree on what the, the nature of the problem is and then considering options to approach solving it. And, and, and, and, and. But no, you're right. I'm, I'm trivializing by saying, well, everything's just a condition, you know.

ANDREW ESCOBAR

But it's useful to frame it as a condition. Maybe to me, it's the most important condition. Yeah, right. And you said. I've said values, you said purpose. I think we're actually talking about the same thing.

MATT

I think you're right.

ANDREW ESCOBAR

But it's. There's two layers to that. Like, what's our purpose? Like the organization, the Corporation's purpose. That's 1. 2. What's our purpose as a board? That's another one. And then what's my purpose as an individual director? You need. That is a condition that needs to be foundational to your work.

MATT VOICEOVER

What do you think? How important is it for directors and executives to have a clear, specific and confident understanding of what corporate governance is? What good governance is? Something they can express sensibly to their peers. How important is it for the whole board and leadership team to share the same concept? Do you have your own definitions? Do you think your peers agree with you? I think these things matter a lot, and I often wonder why they seem so rare. In the next episode, Andrew and I will talk more about what good governance might look like on a normal day. No crisis or urgency, just doing the normal work of a board, but doing it really, really well. That episode is available right now, and subsequent episodes of the show will come out every week or two. In the meantime, I'd really like to know your first reactions to this concept and format. I could even say that I need to know, because I'm doing this in hopes that you will find it interesting and useful and maybe a bit fun. If you do in fact find it interesting or useful or fun, then please say so by subscribing to Ground Up Governance and clicking the like button and maybe leaving a comment or sending me a private message. And most of all, by letting other people in your community know that you like it so that they might check it out too. Oh, and if you're interested in knowing more about the background music, I'll leave a few brief written notes at the end of each post with a bit of info. Thanks for listening. It's so good to be back.

MUSIC NOTES:

Just a moody little loop that I built on an MPC Live. It started by strumming some chill guitar chords and ended up being a bit of a raucous, driving…whatever. The bass line is doubled between an Ernie Ball Music Man Stingray 5 bass and a Gretsch Roundup guitar. There’s some additional guitar chords throughout. All of the drums and the stabbing synth shots are on the MPC.

TRANSCRIPT:

Welcome back to…One Minute Governance? Sound-Up Governance? Kinda depends where you’re listening. I’m posting this everywhere. My name is Matt Fullbrook and this is the first medium- to long-form scripted podcast episode I’ve ever done. It’ll be a bit of a journey. There was just a story that I wanted to tell, and I figured that I’d use these platforms to get it out there. So, well, enjoy the ride.

Let me start with an admission. I can’t stand watching panel discussions. I’m pretty sure the *reason I can’t stand watching them is the exact same reason why I like participating in panel discussions. Like, being ON a panel. Being on a panel is fun. You get to meet and hang out with other people who like the same stuff as you and chat with them until time runs out. It’s pretty great. Listening to that happening is…less great. You can double check the stats if you want, but precisely 0.46% of human beings are good at taking the interesting things they know and turning them into interesting words that come out of their mouths. That number is much smaller if you take only the people who can edit themselves on the fly so that they don’t end up talking forever. Or the people who don’t have to read from a script to be interesting, because reading from a script when you’re on a panel is basically like asking the audience to endure something altogether bizarre and painful.

I think this is the exact same reason I can’t listen to most podcasts. For my tastes, a great podcast requires the combined talents of having something interesting to talk about, being able to talk about it interestingly, audio engineering aptitude, and the will to edit with a heavy hand. Plus having a tolerable voice. Each of those is rare on its own. Together…basically unheard of.

As an aside, this is my first attempt at a medium-length scripted podcast. Probably the only one I’ll ever do. This is *really* hard. Script edits, self-doubt, bad performances. Seriously, what you’re hearing now is my fourth complete re-do of the recording. And it’s *still* not gonna be perfect. I should probably be legally prohibited from even trying.

You know what else should be illegal? Panel discussions. Seriously. If you arrange or participate in a panel discussion you should be doing so with the full understanding that you’ll likely go to prison for the rest of your life. Make sure it’s worth it. Make it outstanding.

Anyway, I went to a conference this summer organized by the Governance Professionals of Canada. Shout out to the Governance Professionals of Canada. At this conference there was a session that taught me something incredible. Actually lots of incredible things, but unsurprisingly it’s the objectively LEAST important lesson that’s changed me most significantly.

The title of the session was Umbay Nagamon – An invitation to action on reconciliation in Canada. Umbay Nagamon translates roughly from Ojibwe as “come sing.” I won’t try to convey the fundamental substance or message of the presenters – there were six of them, presenters, that is – because I just don’t have any words better than what the title of their session already plainly tells us: “an invitation to action on reconciliation in Canada.” As in, each one of the few hundred of us in the room is invited to act – empowered to act, even.

What I *do* want to describe is my experience of the session itself, which was the diametric polar antithesis of a panel discussion. There was a cheerful introduction followed by a heartbreaking story – told brilliantly by someone who admitted they had never before told a story in front of a big audience – followed by an informative presentation with powerpoint slides followed by an engaging group activity followed by a cheerful outro…and in between each segment a musical performance, sometimes traditional music, sometimes western music, all amazing. Total run time of the session? I just checked: 77 minutes.

A couple weeks ago I was a panelist on some corporate governance topic or other. Me and two other people – both super smart and fun to talk to. Total run time? 90 minutes. No musical performances or group activities or any other remotely cool intervention. Just me and two other people talking. For 90 minutes. In front of an audience. Not outstanding.

Right, so I learned a lesson from the six brilliant people on stage for Umbay Nagamon – An invitation to action on reconciliation in Canada. It took me a while – like weeks, probably – to realize that there was a lesson at all, let alone that I’d learned it. But the thing was… I was thinking a little about Umbay Nagamon every day. Not just about the vitally important stuff they talked about, but about the actual experience of sitting in the room consuming their session. That’s weird, right? Like, reflect for a second on what I assume is the approximately six million hours you’ve spent sitting at conferences. Ever find yourself thinking about – feeling, even – the impact of the experience of witnessing a session at a conference for WEEKS afterward?

If you *have* experienced this, I think I know why it happened. And this is the lesson I learned. It’s the same reason you can still basically re-experience the best moments of the best concerts you’ve ever been to, even if you’re not 100% sure what year it was or what song or maybe even what band. The message stuck with you, even if the source ended up being lost to time.

Sorry, what was the lesson? It’s that making people FEEL stuff matters a lot. In fact, it matters more – I think – than the content of the stuff that’s making them feel. Remember how much stuff was crammed into that 77 minutes? Probably sounds a bit chaotic, right? I think it probably was a bit chaotic in hindsight. I’m pretty sure the *chaos made me feel things, made me pay attention. There was a story that made me feel heartbreak, maybe even a touch of despair. Some data in the powerpoints that made me feel the enormity and urgency of a problem. And the music, which made me feel, well, lots of stuff. The way only music can.

Maybe a better way to explain the lesson is this: why bother trying to share information if you’re not also trying to convey a feeling? Without a feeling, there’s nothing enduring for your audience to latch on to. Maybe boredom is an exception. Try to avoid making your audience feel bored, I guess. Other than that, feelings make the information seem more important and more memorable.

You know how people who give advice on public speaking always tell you to try using humour? This is why. But the *problem with humour is that most of us are pretty bad comedians, *on top* of not having much useful stuff to say. Even worse are the educators who *are* good comedians but don’t have anything useful to say – which leaves us with a strong memory of bad information that seems important. I guess I’m telling you to beware of teachers who seem too funny. They’re probably hiding something.

Twenty four years ago, I was 19 and hanging out in Toronto with some friends. It was already obvious to me that these friends were, like, forever friends. That unmistakable bond. Here’s the story. I’ll let you judge how much to trust my memory of the details here. They don’t matter.

The evening kicked off with me and my friends Bryan and Tristan going to a thing at Hart House at the University of Toronto, a more university-y looking building you will never see. Google it: H.A.R.T. house. We walked up a spiral staircase to a little room in a tower where we sat on the floor with a small group of other weirdos and listened to a truly adorable man – a young Buddhist Monk - talk about Buddhism and the movie The Matrix, which had come out earlier that year. Going to this lecture was definitely Tristan’s idea – and it was a very good idea. I remember the experience more clearly than most things from that era – than most things in my entire life, really. And even more impressively Bryan ended up dedicating the remainder of his tragically short life to Buddhism. Inspired by this one weird dorky lecture. Facts!

And that’s just the beginning of the story! I grew up in a neighbourhood with an epic ice cream shop called Dutch Dreams. Dutch Dreams is the kind of place where everything is extra. The flavours were extra – not just in variety but also in innovation. When I was a young kid of I dunno let’s say 6 years old I don’t recall any other place anywhere that had anything other than obvious ice cream flavours. Obvious ice cream flavours are *incredible*, but they aren’t extra. Dutch Dreams would have some flavour that would be like chocolate AND vanilla AND peanut butter with peanut butter cups AND Reese’s Pieces AND a shot of bourbon or something. And it would be called Royal Supreme or some otherwise extra name. And a sundae would have a scoop of Royal Supreme and two other sincerely rad flavours plus chocolate sauce and peanut butter sauce and marshmallow sauce and a huge pile of whipped cream and like 8 types of fresh fruit on top. Extra.

Dutch Dreams still exists, although I haven’t been for many years. It’s at 36 Vaughan Road in Toronto, which is not the original location from my childhood. It’s only like a block away, but it still feels a bit strange to me that they moved. Not quite accurate or something.

So, after the lecture Tristan peels off to do something else, while Bryan and I walk up to meet another friend, Misha, at Dutch Dreams. Epic sundaes in hand, Misha, Bryan and I start walking to Misha’s mom’s place, where Misha still lived at the time.

As a side note, in my memory we were all entirely sober despite the hippie lecture and giant sundaes maybe suggesting otherwise.

To get to Misha’s mom’s place required a cut through the parking lot of a supermarket, and during this cut a police cruiser speeds up from behind us, screeching dramatically to cut us off. Impressively, we all held on to our ice cream. I, for one, found myself feeling much more curious than scared, which tells you all there is to know about growing up white and male in Toronto. Two police officers emerge from the car to question us.

Question 1: Where are you coming from?

Response 1: We just got some ice cream at Dutch Dreams, obvi. Hence the sundaes!

Question 2: Where were you before that?

Response 2: Ooh we went and saw an adorable Buddhist monk do a lecture about The Matrix! Thanks for asking.

Question 3: So you didn’t just beat up an old man?

At this point it is *very* obvious to the police officers that we three dorks did not beat up an old man.

Response 3: OMG someone beat up an old man? Is he OK? I wish we could help, but, y’know, sundaes…

Or something to that effect. Then we went on our way.

Anyway, here’s the thing: doesn’t it seem like that night had some magic in it? Almost like it was destined to be an enduring memory. Strangely, Bryan, to me and many others, figured prominently in the magic moments of our lives. Like he was part wizard or something. I haven’t met many other people like that.

There was another part-wizard in my life named Gregory. I’m going to tell a story about Gregory that’s shorter and slightly more tragic, but that finally veers whatever this podcast is into our shared world of corporate governance.

In the early days of 2021 I announced my resignation from the University of Toronto after having worked there in some capacity since the year 2000. For most of that run, I worked at the Rotman School of Management. I got my first office at Rotman in 2002 or 2003 while I was a child and still completing my undergrad in literature and philosophy. I am confident that there are a couple of people from Rotman listening to this and I assure you I had absolutely no idea how weird it was for a literature and philosophy undergrad student on a casual part-time contract to have an office. With a window. All to myself. At the Rotman School of Management. With my name on the door: Matt Fullbrook, as if I had EARNED that s**t.

I remember once after some random philosophy class, a classmate asked for some notes or a copy of a book or something and I said, “sure, let’s go grab it from my office.” And we walked to my office. At the Rotman School of Management. I opened the door with my name on it, and we went inside to pick up the book or whatever. And although I don’t remember this guy’s name or what he looked like, I do remember he was essentially speechless, which is totally fair.

Anyway, after I resigned from the University I had an important question to explore: “do I even care at all about corporate governance?” It really wasn’t very obvious to me – I sort of felt like I *really* cared, and *really* didn’t care simultaneously. Actually, the real question I wanted to answer was slightly different: “is now the time to do something completely different with my life?” So, what else do to than pick up and go to the desert with my boo, Dana, to sort myself out.

There’s an amazing song on Jeff Rosenstock’s killer new Hellmode album called Life Admin in which he sings: “Might go to the desert cuz I make enough to f**k off to the desert if I want to. I haven’t decided yet. Got a sweet new pedal and I don’t pay rent.” Am I allowed to sing someone else’s song in a podcast? Probably not. Sorry in advance if this gets taken down. And honestly, you should be listening to Jeff Rosenstock’s recording anyway. It’s truly excellent.

But that was the headspace: we went to the desert because we make enough to f**k of to the desert if we want to. Before going to the desert, we visited some old friends in LA and ate and drank and went to the beach and whatever. It was dope. But it was time for the desert.

Bags packed and ready to leave the adorable B&B where we stayed in LA. We’re walking out the door to hop in the car and drive to the desert when I get a call from a friend to tell me that the great part-wizard, Gregory, had died. This was…ugh. It was really very bad.

These things transform you in ways big and small, transient and permanent, immediate and eventual. The transformation relevant to *our journey here on this podcast was big, transient, and immediate. I stopped caring about the stated mission for my desert adventure. You’ll recall from a few seconds ago that I was seeking an answer to the question: “is now the time to do something completely different with my life?” I mean, it really seemed important before. Urgent and elemental. And let’s be clear here: this was not one of those “death makes you realize what really matters in life” things. Because we all know that what really matters in life is snacks. It was just suddenly obvious that *that* question didn’t matter like I thought it did.

In case you were wondering and maybe even a bit worried: yes, we made it to the desert. We saw tarantula hawks, scorpions, a tarantula, and the greatest find of all…an adorable little blind snake. It was like meeting a celebrity. Truly amazing.

But that’s beside the point.  I started focusing on unfinished business. And, honestly, unfinished business is still basically the core premise of my work in corporate governance today. The first bit of unfinished business really startled me. I had no idea what good corporate governance was. Now remember, this was 20 frickin 22. Twenty years after I settled into my well-deserved office at the Rotman School of Management to run a research centre that studied and provided insights to the world on the topic of good corporate governance.

You might be thinking one or both of two things. Both fair things. The first being “pfft, stop playing, Matt. Of course you knew what good corporate governance was.” And the second being, “Oh snap! That’s kinda embarrassing. You must’ve felt dumb, huh? Or at least some regret that you’d messed up so bad.”

On the first thing, I assure you if I *had* had a clear idea of what good corporate governance was, this would not have been a transformation. It was an…acute? Poignant? feeling. As for the second thing, you’d be wrong on that one, too. One of the tremendous benefits of privilege (of which I have roughly infinity percent) is a near-immunity to shame. And so, I felt none: no regret, no dumbness, no embarrassment. Only a new flavour of privilege-fueled purpose and ambition.

See, the thing is, none of my peers or colleagues or associates or mentors or any of the respected experts out there really seemed to know what good governance was , either. Sure, there’s the Mad Libs style definition that goes something like Good corporate governance involves the implementation of robust processes, rules and structures to foster sustainable growth and a healthy workplace environment. Or whatever. This is the type of definition where you can replace most of the words with other words and it will always basically sound right enough to pass. But it doesn’t tell you what the processes and structures and rules should look like. It’s basically telling you “you’ll know when you have good processes and structures and rules if you’re getting the result you want.” Sustainable growth or some such nonsense.

Here’s the thing about results: sometimes good results come from bad inputs, and sometimes bad results come from good inputs. You know like when you’re first learning to cook or bake or drink cocktails or whatever? Like you’re a little kid and your parents let you experiment with making food. They give you some benign ingredients to work with and pre-heat the oven. Ready to bake whatever nonsense you conjure up. And so you mix flour and sugar and salt and eggs and hot sauce and chocolate chips and put it in the oven and there’s a 99% chance it turns out inedible? But you and I can both imagine that if you get the ratios of those ingredients *just right* it’s conceivable that you get something kinda OK.

Why? Because results are always, at least partly, influenced by luck. And I don’t know about you, but I can’t stomach the idea that good governance boils down to good luck.

And that was my first realization: results are results. Good governance is something different. It’s also something more than rule following. Rule following is just another way of saying you’re playing the game, or at least that you’re not cheating while playing the game. I can’t stomach the idea that good governance is the same as not cheating while playing the game. Rule following is rule following. It’s compliance. Good governance is something different.

I wanted to believe that good governance is something that actually matters. Anyway, I pulled on that thread long enough to eventually land on my current definition – which, if you’re listening you’ve probably already heard me say a million times –

My current definition goes like this: Good corporate governance is intentionally cultivating effective conditions for making decisions.

There’s like 100 podcast episodes and 50 interviews and six million linkedin posts that’ll tell you more about me and that definition of good governance so let’s not waste any more time right here on THAT.

OK, let’s waste a *little* more time. I’ve only recently understood the real magic of this definition. And I’m at the beginning of a journey to learn to wield that magic. I’m gonna stop with the magic metaphor because I don’t have a very good grasp on the relevant vocabulary. I don’t want to conjure me up some governance spells or whatever. Sorry I’ll stop.

I’ve only recently understood the vast POTENTIAL of my definition of good governance. It’s three things:

First, framed this way, good governance is so tangibly DO-able. Pick a condition that might affect decision-making. Let’s say, the presence or absence of the delicious aroma of a freshly-baked pie or cookies. Because, as we know, snacks are what really matter in life. We can easily grasp the potential for such an aroma to be distracting, or maybe inspiring, or maybe just fun. More importantly, we can be intentional about it. Even just by thinking “hmm…should we bake a pie in the boardroom? Eh. Maybe not.” There you go! Good governance!

Second, because good governance is so DO-able, literally anyone can do it. That pie and cookies thing? All of that can just happen in a single person’s head. It could be YOUR head. And even if the answer had been “heck yes! Let’s bake a pie in the boardroom!” I bet you’d have a pretty good idea what steps you could take to try to make it happen. Holy smokes! Look at you. You’re doing good governance all by yourself.

The third thing is pretty fresh for me, and takes us mostly to the end of our journey here because the rest of the story has yet to be written. Ugh, sorry that was corny as hell. Whatever. I had *always* thought I was fighting a fight to change systems. Big systems like regulations and laws and stuff, medium systems like the influence of consultants and educators on corporate governance, and smaller systems like a single boardroom during a single meeting. No matter the size of the system, you gotta get buy-in. If we think of it that way, doing good governance requires everyone to be on board and push in the same direction. But I was wrong. Good governance can belong to a single person in the system, and for only a fleeting moment. Noticing in that moment that the system isn’t working right – or not as right as it could – and an intentional cultivation of a condition in the system to get it sorted out…even for just a few seconds. It can matter *so* much. Just think: in those few seconds, the right person might now be inspired and empowered to say or do something that shifts the way everyone in the room thinks and behaves. Maybe forever. Or maybe just enough that we see a problem or solution or opportunity that we’d never seen. Or that we generate an idea that’s slightly cooler than what we WOULD have come up with. Or we just like and trust each other a bit more.

I guess what I was trying to say in the 3600-odd scripted words you’ve heard so far is this: making people feel things matters. Good corporate governance is science married to art. The power and potential of good governance might only manifest for a second at a time and you may not even notice. But it’s not abstract. It’s so do-able. You don’t need permission. It costs zero dollars. You don’t need others to care or even pay attention. It’s you. Inspired by the part-wizards in your life. Being intentional.

That was supposed to be the end. And I need you to suspend your disbelief for a second. I know *I* would be suspicious of what I’m about to say… skeptical of anything that seems so contrived. The best I can do is admit that DOES seem contrived and hope that you’ll trust me for no reason. Here’s the thing: there’s an extra connection, a thread even, between the beginning of my story and the end. It’s a second lesson from Umbay Nagamon that I overlooked. I wrote, edited, and sat on the script for a few hours didn’t see it until I was sitting with my boo, Dana, watching TV with a cocktail. She can vouch for me! And it’s one of those things that’s so crystal clear and makes this whole journey feel and sound like I’m a million times smarter than I am. I told you before that I don’t feel shame. That was true until now.

Let me read back to you something that I said a while back. Direct quote:

I won’t try to convey the fundamental substance or message of the presenters – there were six of them, presenters, that is – because I just don’t have any words better than what the title of their session already plainly tells us: “an invitation to action on reconciliation in Canada.” As in, each one of the few hundred of us in the room is invited to act – empowered to act, even.

If you see the connection already, you are SO far ahead of me. If not, trust me, I feel you. Let me read back what was supposed to be, and will be again, the very end of my story: The power and potential of good governance might only manifest for a second at a time and you may not even notice. But it’s not abstract. It’s so do-able. You don’t need permission. It costs zero dollars. You don’t need others to care or even pay attention. It’s you. Inspired by the part-wizards in your life. Being intentional.

It's the same message. I learned it from Umbay Nagamon and am grateful for it.

Thanks for listening. I don’t know exactly what I hope to achieve by sharing this other than some information transmitted on some feelings. Beyond this, I’m working hard on creating a new…something… to make good governance easy – or easier – so that you don’t have to come up with all the ideas on your own. But that’s a story for another day, pretty soon. I’ll probably never do another podcast episode in this format again. But let me know if you loved or hated it. If you learned anything, or if you think there’s something more I need to learn. My name is Matt Fullbrook. Until next time…

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TRANSCRIPT

Matt Voiceover

Welcome back to Sound-Up Governance. I think it's fair to say that the best part of my profession, if you can call it that, is the privileged access I have to a huge variety of super smart, super interesting and super influential people. Confronted with an endless menu of awesomeness, one has to use some kind of criteria to determine who, exactly, to hang out with, since everyone's at least a little great. I like to look for the folks with a spark of, I don't know... counter culture. Like, the people who you'd really like to glom onto and drink with at a party because you just know you're gonna learn something and have tons of fun. So who am I talking to today? Reanna Dorscher and Ciara Wakita. Respectively, a Partner and Principal at Hugessen Consulting, one of the serious major players in executive compensation and governance in Canada. Part of their awesomeness is reflected in the fact that they're decidedly different than most of the influential folks in this space for lots of reasons, not the least of which is that they're less male and less... old than the status quo.

Reanna Dorscher 

It's great to work in this space, because we are considered young,

Matt Voiceover

That's Reanna Dorscher.

Reanna Dorscher 

There's very few professions where we would be the young up and comers. You know, I certainly do think impostor syndrome is a real thing, particularly for me. And it's funny how it can swing from day to day, from mandate to mandate. To me the imposter syndrome settles when you take the time to build the relationship, understand the individual, how they like to work, what your business does, I understand what's top of mind for you, I really want to listen to what's keeping you up at night, and you kind of build that trust. I find the relationship gets strengthened, and it helps my imposter syndrome fade. I have a lot of great mentors in this business as well. They have, you know, put me front and center in front of groups, they've given me so much confidence, because they show they had confidence in me and they've passed the reins on a number of really big client files. And so having those kinds of people in your corner and having them even in my corner today still makes a big difference.

Ciara Wakita 

When I first came into the governance space, you know, I think we need to acknowledge that boards are a very mysterious place to most early and mid stage professionals.

Matt Voiceover

That's Ciara Wakita

Ciara Wakita 

Yeah, it doesn't quite have the same cachet as going into finance or going into strategy or into marketing. Like you're going into governance is a little bit different. And, and it's not taught in business schools and that sort of thing, either. And so it's very mysterious, I think, until you know, people reach sort of senior executive stages of their career. And so coming into this industry as a service provider, and I came from management consulting, where all you do in management consulting is reimagine the art of possible, right? And you're always thinking about a new way to do something or a different way to approach a problem. And there's a lot of space for that, I think, in governance, because we have benefited, I think, from a steady, predictable set of boards in Canada for a really long time. And I think that is something that does offer some value, right? But there is, like I said, opportunity to innovate, to rethink how we do that. And rethink what levers are available to offer more value or to really lean into their role as a strategic asset of the organization.

Matt 

So, there's something in what each of you said that I really want to pick up on. The mentorship thing, Reanna, that you talked about, I find really interesting, too. Because I think this is a space, where we may be, from our perspective, we get this access to mentors in a way that for instance, like... Board's have to, like a director has to be forced to have a mentor, like there's not a lot of people who are in the board world who are like, sufficiently self aware to say, "you know what? I really wish I had someone on my side who was helping me to see the things in myself that I don't see, and unlock that value and so on." So, you know, I I've had some mentors in my life that have been really amazing. I've just my statement here is, I think, I think maybe we should be like champions of have a greater like, acceptance, or maybe giving permission for these super like influential, high powered people to also want mentors. I mean, does that make sense?

Reanna Dorscher 

It does and I think for me, the best mentorship I've had has always been natural. It wasn't like me asking someone to be a mentor. Right? And something with that Ciara mentioned is boards are such a mystery, and we need to find a way to break down that mystery and help people see how they can add value and why it matters. And then I think that natural learning Curiosity will will come about or I would hope that it would.

Ciara Wakita 

I think there's this concept, some people call it reverse mentoring. I, for many years, I used to have a cool coach because as I started to get older, I realized I started to become less cool. And I, I didn't think I knew all of the new lingo. So there was this like young, brilliant consultant that came out of out of undergrad. So I mentored her professionally and she mentored me to be cool.

Matt 

Did it work?

Ciara Wakita 

It did it did. I'm pretty cool. I'm pretty cool, Matt.

Matt 

I think maybe these this like mystery factor. Do you think maybe boards or senior corporate leaders kind of want the mystery to be there? As not on not intentional gatekeeping, but to make themselves feel special? I mean, I'm being a little bit nonsense, but but I think here's what I'm getting at. I remember having a conversation with some faculty when I was at Rotman trying to make a case to them as as I was trying to, as I was understanding boards and governance more intimately. I was like, "Wait, why aren't we being, like more intentional and active about teaching this to the MBAs? like, I think that really enjoy it. And it would help." And the answers that I would get would always fall somewhere along the line of "Yeah, well, they're too young to really get it. So, no." I was like, they're only too young, because you're not teaching it to them. You know what I mean? So is this is there maybe a little bit of either intentional or unintentional gatekeeping going on that perpetuates both the mystery, and the lack of access to like early resources and mentorship?

Ciara Wakita 

I think it's less gatekeeping. And more about relevance, because like, rightly or wrongly, I think that people associate governance with process. And that's ultimately what it is right? Like, like governance in itself is not a business outcome. It's a means to a business outcome. And because governance is connected to process, it's a very unsexy term. And it doesn't spark a whole lot of curiosity or inspiration amongst professionals, early and mid stage, you know, as they grow their careers.

Reanna Dorscher 

Yeah, I would agree with that. I think, if you ask most people that don't work in this space, and that don't work with boards, what they think of when they think of governance, they probably say bylaws, and no one wants to sign up for a course where they learn about bylaws, right? They think of it as being a purely legal process function. And so it's, I think that's probably one of the barriers is just the barriers of interest, because nobody really understands how impactful and interesting it can be, and that it's not bylaws.

Ciara Wakita 

And I think that's exactly where the governance community is going. Like, I think that there's an opportunity to connect governance to business outcomes and connect it to purpose, right? I truly believe that every organization is different, therefore, every strategy is different. And therefore every board should be approaching their role differently. I think once we can connect governance to something more intrinsic, once we can connect it to purpose, that's a lot more inspiring in terms of something that I want to do. Right? And when I'm teaching directors, you know, one of the first things we ask is, "why do you serve on a board?" And we'll get all kinds of things I'm I want to give back, I want to serve my community, like it takes five or six answers before somebody says they're doing it to get paid. Right? And so money is not the motivator of, you know, joining the governance community, particularly in Canada. And so I think that we have to find a way to connect to purpose and I think we have a generation that's actually willing to do that now more than it ever has.

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Matt Voiceover

It won't surprise any listeners that I like this idea of corporate governance having the potential to really matter and not just be some boring, bureaucratic necessity. Throughout our conversation, both Reanna and Ciara made a point of saying that the work of consultants in the governance space helps people. I happen to agree, but I sometimes have a hard time explaining it to folks who might see me and others like me as just another cog in the vast capitalist machine. Here's their take, starting with Ciara.

Ciara Wakita 

I think what connects me to this work most, Matt, is that I'm truly convinced that boards, like industry corporate boards, can influence the fabric of our country. Can influence the fabric of our societies, how we govern ourselves, what our beliefs are, whether we're inclusive, whether we're not. And the work that we do in board effectiveness, you know, our role is to help boards better their odds of making good choices. It's to better their odds of making choices that are meaningful to the communities in which they operate, to the people in which they employ, to serve the whole realm that works around the organization. And I think if we can influence who's at those tables, how they think through their problems, and help them get to outcomes that are inclusive of all of those perspectives, then I think we're doing our part.

Reanna Dorscher 

And I would think, you know, in helping and adding a lot of value is just taking the time to really understand the priorities, the issues at hand, the challenges, the opportunities, and offering an external perspective and asking the right questions. I think it helps just make boards make better decisions when they have an external perspective, asking... an informed external perspective, asking the right questions and kind of pushing their thoughts a bit, because you don't bring about change by doing the status quo. And unless you bring in an external perspective, I'm not sure how you, you push meaningful change.

Matt Voiceover

I have a pretty strong, maybe strident, opinion that organizations in general are making a big mistake by not working hard to bring young people onto boards and other positions of influence. I was curious for Ciara and Reanna's as perspectives on how to get some movement here.

Reanna Dorscher 

You know, when we think about, like, diversity of thoughts and perspectives, I also think of diversity of knowledge base, right? And so what are the few subject matters or the few topics that we think that traditional boards don't pay enough attention to, or they don't necessarily naturally have the knowledge from their years of service, both at either the management team level or the board level? And so then how do we identify those individuals that possess those unique knowledge bits, right? And try to share with them like, "Hey, by the way, it would be great for boards to understand better, what you understand or what you know," and kind of try to create that connection between the mystery of a board and the value creation of advising, if that makes sense. Like, how do you kind of show people what the value is of what they know that others don't? And how can we be impactful?

Matt 

Yeah, and like without it being this, sometimes there's this tendency to tokenize young people and bring them in boardrooms and just be like, "tell us about the youth!" And like, Well, no, there's to you than just that, right?

Reanna Dorscher 

I think it's also making sure that you're bringing people into the conversation, because you're genuinely interested in hearing from them. And you feel like you have something you you can learn and your open minded to their contributions. I think to a certain extent, I mean, chang is constant, right, and appeals like the board. I think everyone has good intentions, they want to do things better, they want to change everyone who says, "well, the status quo could be pushed, we could think about things differently. We should be making more time for this." But then other priorities getting away. Right? And so I think there's just that lack of taking the time to take a step back and say, "what have we been doing forever, or spending time on forever, that we are just spending time on because we've been doing it forever, not because of value add? And can we take it away to make space to do these other activities or think differently?" And it's just the world changes so quick, businesses change so fast, priorities change so fast. I really think boards don't necessarily get that time to have that conversation about what can come off the agenda to make space to do things different.

Ciara Wakita 

Yeah. Change resistance, I think is such a natural human behavior. And of course, we see it in boardrooms, we see it in every aspect of human life. And I think, especially like in business, one of the ways that we get change is because we have leadership, or we have hierarchies, or we have some sort of power force that actually really enforces change in organizations. Boards are unique, because there's nobody more senior than the board telling them to change or change their behaviors and the way they do things or, or their processes. And so it takes a really strong chair, there's a huge role for leadership on boards. And to some degree, a chair is also a first among peers, too, right? And it takes everybody on the board to be on board with change. And so that's actually I think, a force that works against change in this space. Because simply of how they're structured and there's nobody truly saying okay, you must make change.

Matt Voiceover

I had to take advantage of the fact that I had two people with me who kind of eat sleep and breathe listed company governance stuff. Some of you may know that for more than 20 years, I ran the data collection efforts for two sets of what we called board ratings, including for a project called Board Games that gets run in Canada's national newspaper, The Globe and Mail. We vacuumed up countless thousands of data points every year and spat out scores that claimed to measure good governance. But really were just metrics of very specific types of public disclosure. They were useful, for sure, but it was a bit of false advertising. Anyway, I was curious about the state of affairs in the way listed companies think about and work on disclosure in the years since I've been out of that racket.

Reanna Dorscher 

Yeah, so I will say, and if you go back to, you brought up Board Games, I do think and we saw it with many clients, people take their Board Games, and it would be a bit of a check the box activity.

Reanna Dorscher 

I'm gonna put this in my proxy, because it's gonna get me two more points in Board Games. It's not necessarily that we we feel that this is, you know, a meaningful change, but it's gonna get us two more points. And in my mind, anytime you're doing a check the box, it's goes against creating value and good governance. And it just, it inherently doesn't line up to me doing check the box activities in the governance world. So in terms of what we've seen, from a trend, I do think we're seeing more transparency in the terms of plain language like proxies used to be very legalese. They used to be very, you know, you'd have to really understand either like the specific technical aspects of the business, or the securities requirements that drive the form requirements, to actually get any value from it. So, you know, I always tell my clients, if you, if you want someone to pay attention to your proxy, you have to know they're gonna look at two places: the letter to shareholders at the front of the CD&A and the summary compensation table that shows how much you paid and the year over year changes, right? And so those are your two places to share any key messages and ones just numeric. So if you really want to tell a story, put it in that letter to shareholders. And I think it's become a great opportunity for the committee chair and the board chair to pen a letter that talks about key performance highlights for both the corporation and the executive team. What were some of the pay decisions that were made. What are some of the things that the board plans to change to be better or to do better. And as well, letter to shareholders also include, "if you don't like something, here's how you can get a hold of us, here's how you can engage the board directly." Which I think is a change. So I mean, big picture, plain English, lots of pictures and charts. And just kind of a let's take the mystery away from this. Here's how it's structured. And here's the decision we made as a result of this performance.

Matt 

Totally!

Matt 

So first of all, this is a great trend. Second of all, I wonder if like if maybe they could also add like a selfie video from the CEO, just be like "Hey, guys!" this is like just, you know, make it give us as many different media so like, you know, people like me, who decided I never want to read a proxy again, I would watch a video, I might listen to a podcast. You know what I mean?

Reanna Dorscher 

I think that's an interesting evolution out of COVID that when AGMs went to virtual Right? And you actually did have a CEO doing like a webcast AGM corporate presentation. I mean, not really as much about the proxy, but as much as the business how the business is doing. But that is kind of interesting thing now that most websites, you can actually watch the webcast of an AGM as opposed to, you know, read the proxy and attend in person.

Matt 

On the flip side, Is there stuff here that you you feel like boards are really spending a lot of time on just like, dudes, like, this is not worth the time.

Reanna Dorscher 

It's not so much that it's not worth the time. But I feel like we should be at the point now where ESG doesn't need to be this big mystery pillar, but it's just kind of something that's a part of the way we do business and making good strategic business decisions, right? And so sometimes I think boards can spend a little bit too much time speculating what ESG is and what it means for their business without just taking the concept and breaking it down to what are the environmental, social and governance things we are already doing in our business, and where do we want to go on each of these pillars? So you know, I'm hesitant in saying ESG is taking up too much time, because I do think it's important strategic conversations. But I think sometimes we're missing the practicality of the conversation and just breaking it down into what are we already doing? And what do we want to do better?

Matt 

Yeah, it's one of those situations, I think, where there's the way they talk about it is worse, in some cases, I will exaggerate a little bit. It's worse in some cases than virtue signaling. It's just signal with no virtue, you know whatI mean? Where we could be like, talking about, "okay, well, like you said, what do we actually want to be in the world?"

Reanna Dorscher 

Yeah. And, you know, I want to go back to the Board Games thing for a minute because it's interesting, you know, I said people were doing it for a check the box to get extra points. But for boards that really didn't know where to go to make their disclosure better, it was a good starting space, right? And so if we think about how we can make boards better how we can make disclosure more useful, what are the resources other than a Board Games that someone can go to and say, "I want to do better with my proxy, but I have no idea where to start?" Right? And I will give Board Games credit that it gave people some ideas that if you wanted to build on your disclosure, here's how you might be able to start.

Matt 

I agree. I think the mistake wasn't caring about disclosure, it was making it gamified. Right? Making it a ranking, implying that that there's winners and losers. And if you're at the bottom of the list, there's something wrong with you, which, frankly, it's really stupid. You know...It is what it is for now. Ciara, what about, are you seeing stuff where you find yourself witnessing things you wish, you could just be like, can we move, Can we like, just move on to something better?

Ciara Wakita 

Yeah, I do. I mean, I spend probably two thirds of my time helping boards with their board evaluations. And first and foremost, we have to stop calling them board evaluations. I think the word evaluations just doesn't set anybody up for candor, and trust and transparency. And so I think we need some, some different nomenclature around that. But what I often see is very like routine, truly check the box exercises. We're going to do the exact same survey, and we're going to ask the exact same questions that we did last year. And you know, we're going to maybe find different outcomes, which you're probably not going to. And so one of the things that I hope starts to shift is that we actually take all of the energy that goes into board evaluations, and it's a lot, it's a lot of precious Director time that goes into this every year. And we can actually reframe it and think about this, rather, as an alignment exercise. And so think of if we think about it like, okay, a board has a purpose, an organization has a purpose, a board has a purpose, then we can start to think of like, what are all the things and levers that are available to us to make that come true? Right? And are we are all of those dimensions, balanced and in harmony? Because what's happening right now is we're saying, we're asking questions like, "do we meet enough?" You know, "are our materials good? Are we getting them on time? Is the quality good enough?" But really, unless you're connecting that to something else, all of those responses are a matter of opinion. They're not actually connected to an outcome that the board is trying to generate. And so I think we can start thinking about it more holistically, and really generate things that can offer structural shifts in how boards operate, as opposed to tinkering with processes or, you know, trying to shift director behaviors.

Matt Voiceover

See what I mean? These two are the true embodiment of the cool kids when it comes to governance consulting. Embedded right in the heart of influence in the Canadian system, questioning status quo, coming up with big ideas. This is the rising generation of governance expertise. Thanks again for tuning in. And sticking with me on this nerdy adventure. Shoot me your cocktail bar recommendations or cocktail recipe recommendations at that, plus any compliments and complaints to soundup@groundupgovernance.com. For those of you in temperate regions, make the most of the seasonal changes by wearing your coolest jacket as much as possible. Catch you next time.

Ciara Wakita 

I'm a figure skater on a synchronized skating team. Our role is to represent Canada internationally. Synchronized skating is kind of like ice dance with 16 people. We all look alike, and then we make shapes and squares and stuff on the ice.

Matt 

And frankly, I've never heard of it until you talked about it. And so I immediately that night after we partied, I looked it up and it's like, it's really cool!

Ciara Wakita 

It's pretty cool. The view from the top is pretty awesome, right?

Reanna Dorscher 

And she's gonna be representing Canada in Italy.

Ciara Wakita 

It's true. Next year. Yeah.

Matt 

That's really it's very cool.

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