How to talk to the capital markets about ESG and Corporate Purpose
An interview with Brian Tomlinson, Director of Research at the CEO Investor Forum at CECP.
Feature with: Extraordinary Women on Boards (EWOB)
Extraordinary Women on Boards (EWOB) is a dynamic, peer-to-peer community of highly accomplished women who actively serve on private and public boards. The group brings women board directors together to share their wisdom, experiences and insights. EWOB represents hundreds of boards from a wide range of sectors and industries. Members discuss the issues boards are facing, and bring actionable ideas, smart questions, and best practices back to their boardrooms.
The COVID-19 pandemic has removed geographic constraints and transformed the community from its original NYC-based membership to board directors across the US and globally, as zoom has enabled connectivity and access to discussions. To learn more about the extraordinary group we interviewed the organization’s co-founder: Lisa Shalett, and one of its earliest and most active members: Stefanie Shelley.
Stefanie: I’ve been in the financial services and fintech space for a long time, in Chief Marketing Officer and General Management roles, driving growth and digital transformation. I spent a lot of time at the big banks - JP Morgan Chase, Citibank and Capital One, and then Broadridge Financial Solutions, in the fintech space. I joined my first board, a public bank, Green Bancorp in 2010 and we grew the bank significantly over a number of years. I currently sit on two financial services boards, Mercer Advisors and Fora Financial and also the NY Chapter of the NACD. In addition to my boards, I do advisory work with companies and private equity firms and with a recent degree in coaching, I also do coaching work with executives.
Lisa: I never would have predicted that I was going to work on Wall Street and I ended up having a twenty-year career at Goldman Sachs, where I was a Partner. I got to Wall Street, and then Goldman, because I have a Japan background that led me to Japanese equity sales. I spent the first 11 years of my career at Goldman in the Equities Division in New York, then Tokyo, and back, eventually running International Equities Sales and Trading, and Global Merchandising. Unexpectedly, I was then tapped to become the Chief Operating Officer of Global Compliance, Legal and Audit, which coincided with a period of time just pre financial crisis, when a lot of the financial firms were experiencing major difficulties, with some disappearing, and Goldman became a bank holding company. It was a fascinating lesson in risk during a very interesting historical time. Four and a half years later, I raised my hand for my next opportunity, and I was asked to move to the Executive Office and become the Global Head of Brand Marketing and Digital Strategy, responsible for Goldman Sachs’ brand. A week and a half into this new role Goldman’s brand was hit with a crisis, and became a focal point and target during the financial crisis. This was the same time that social and digital channels first began to emerge, and that led me to spend a lot of time in the startup ecosystem with founders who were disrupting advertising and marketing. I loved working with startups and when I left Goldman that is exactly where I headed, advising a lot of growth companies and was very fortunate to get the opportunity to serve on two boards. At that time when a woman joined a board, she tended to be the only woman on that board. This ultimately led to the creation of what is now Extraordinary Women on Boards.
“I would find a topic, a great speaker, and create an event for these women board directors. The original group of 15 women then started bringing more women who were on boards and through these referrals, by February 2020, purely through word of mouth, the group had grown to 100! I figured I needed a name at that point so I called it Extraordinary Women on Boards.”
Lisa: After leaving Goldman, I started to meet a number of women who had just completed their accomplished careers and were now having “portfolio careers,’ doing a number of different things. It seemed that typically, joining a board would be an important part of the portfolio. Over and over, I would meet women who would tell me how amazing it was to meet another woman (me) who was on a corporate board, and tell me how she wished she could meet more women who were on corporate boards. This happened to me 15 times in a row!
“With all the organizations already in existence, women were still having trouble meeting other women on boards.”
I thought that it was odd that with all the organizations already in existence, women were still having trouble meeting other women on boards. This was some years ago but still, it should have been easier for women to get together. After I heard this conversation over and over and over again, exactly in the same way, I figured the universe was sending me a message: I needed to get all of these women together. With the intent of creating a one-off event in which all of these amazing women had a chance to meet, I got a really interesting speaker on a topic related to board work and brought everyone together. It was a fantastic event, and my intent then was to have everyone share their email addresses and say ‘let's stay in touch.’ Afterwards, every single woman reached out to me and said ‘Lisa, you must keep doing this, please’.
“Women don’t just want to get into the boardroom, which is not easy; they want to be excellent board directors, and they want their boards to be excellent.”
That became my side hustle. Every 6 weeks or so, I would find a topic, a great speaker, and create an in-person event for these women board directors. These events were great – and the women then started bringing more women who were on boards, and all of a sudden, by February 2020, purely through word of mouth, there were one hundred people – a number of whom were referred in by Stefanie, who has such a phenomenal network herself! At that point the group needed a name, so I called it Extraordinary Women on Boards, because these women were truly extraordinary! Once the pandemic started, the geographical constraints of in-person events were removed and the need for board directors to get together and talk was massive amidst all the uncertainties and chaos that was going on. We kept doing events, and members would refer in more women directors from all over the country and the world – the group is now approaching 500!
“I would say a few things, 1) women wanted to meet other women board directors, 2) women on boards wanted to discuss their board work with peers.”
One thing that has been differentiated about Extraordinary Women on Boards is that it is post-placement. Members are already on at least one public or private for-profit board. While any woman wants to help increase diversity in the boardroom and help women aspiring to be on boards get on boards, I have found that when you combine women on boards with women who want to be on boards, the conversation somehow tends to focus narrowly on ‘how do you get on a board?’ An important conversation, but not a unique one and not necessarily helpful to women already on boards. By focusing on a peer-to-peer group where women on boards can talk about their board work in a safe space where any question was welcome, where everyone felt respected and that they belonged, everyone could learn from each other. There is a tremendous generosity spirit in the community combined with the fact that women don’t just want to get into the board room, they want to be excellent board directors, and they want their boards to be excellent. A focus on learning and excellence became the spirit of this organization and that is what my co-founder and I think about all the time. We think constantly about trying to create value – another differentiating factor is that we bring a focus on current/bleeding edge topics and speakers to help our members “see around corners” in their boardooms. We are always respectful that these are incredibly busy, accomplished women board directors -- and if they continue to allocate their time to EWOB, then we feel like we must be doing something right. I was joined by an amazing co-founder, Lisa DeCarlo, last August, which made such a difference as we were growing so fast.
Stefanie: I joined in 2019 and I remember being at a couple of different events. They were great events with maybe 30-40 people – it always was a wonderful group of women. All of us were on boards and there was a desire to learn and deliver the best we could to our boards. As Lisa would say we all want to “drive excellence.” EWOB brought many talented board directors together in a community of inclusion. We’re helping each other out and learning and doing the best for our boards. One of the special parts of EWOB is that as we all started bringing our friends and colleagues in, the organization grew so fast. I’ve lost track of how many people I’ve introduced, but it’s been many accomplished women – and then they’ve all introduced their friends. And then when the pandemic started and we went virtual I asked Lisa if we were still keeping to the NY area and it became pretty obvious that our world just became global. I reached out further and brought on colleagues from Spain, California and North Carolina. With this multiplier effect of EWOB, our group of now nearly 500 women continues to grow which helps our board directors build their networks and knowledge and contribute significantly to their boards.
Lisa: We need to figure out how to maintain the best of the reach, convenience and inclusion we’ve benefited from thanks to Zoom, while also reintroducing meeting in person but not leaving anyone out. There are so many things that we could do with this organization -- one of the most exciting things is to continue to find ways to unlock the expertise and wisdom of the members. It’s wonderful to get speakers, but there are many experts already in the room! We’re always thinking, how do we make it easier for people to share their wisdom and information? Second, how do we amplify the profile of the members? Because we need to see more women on boards represented, and heard from. There's an opportunity through the community to enable and facilitate that more.
“You have to be proactively holding up a mirror, looking to see if your network is limited. And invest in the pipeline of relationships with diverse candidates before you need them. It's so aggravating and untrue to hear ‘I can't find any women’.”
Stefanie: When you have an organization, we need to think about how we help its members to connect with each other. One of my favorite things as a member is both how Lisa and Lisa find incredible experts to come speak, but also the chance to just simply network within the community. We come together and we transfer so much knowledge and information.
Stefanie: It’s funny, as I just heard from a board that they “couldn’t find women for their board”. When I hear that I just want to say “are you kidding?” We have about 500 right here if you want to come in and start meeting experienced board directors. EWOB is a great place to meet a talented organization of female board directors to add to their networking connections.
"We have to keep working on opening our eyes."
Having been a board director on several boards as the only woman on the board, there’s no question that two or three women would add more diversity – and “diversity of thought” to the board. We’re all focused on trying to bring broader diversity to create that “diversity of thought”, but it all starts with the funnel of where the candidates are. It's great to have an organization like EWOB, where if you feel like you don’t know enough women, it’s a good place to start.
“It’s funny, I just heard from a board that they “couldn't find women for their board”. When I hear that I just want to say “are you kidding?”
Lisa: EWOB loves to work with companies, search professionals, PE, VC firms, etc to bring board opportunities to our community and help identify experienced, excellent women board directors as potential candidates. You have to be proactively holding up a mirror, looking to see if your network is limited. And invest in the pipeline of relationships with diverse candidates before you need them. It's so aggravating and untrue to hear ‘I can't find any women’. Ask, what is the strategy for developing a pipeline for your board? There needs to be a strategy for this just like there are strategies for everything else. The second thing is the spec itself. When you go out and look for a board director, are you layering on levels of experience such that by doing so, you’re limiting the eligible pool from a gender perspective? Does your spec say ‘must be a sitting CEO’? Because, first of all, does that necessarily mean they are going to be a good board director, but second, it does really narrow the pool of possible candidates to men with few exceptions. I don’t think anyone’s revisited those specs in a very long time or done much analysis as to how those qualifications lead to great performance in the boardroom. If you’re going to have qualifications that make the applicable pool so narrow, then of course you're not going to find the women. So, change the spec. And it would be great if the spec more often included digital skills, technology proficiency, HR, marketing.
Stefanie: I would say the first priority when joining the board is to listen and learn - and build relationships with the board and management. It can feel like an uphill climb when you’re new, but once you have that knowledge and understanding of the company, you can add value to the board. I’ve found that asking questions contributes to the “diversity of thought” in the boardroom as it creates insights and a richer level of discussion. Along with listening and learning, it’s important to get to know the directors and learn even more about the history of the company and specific challenges and opportunities - while you also build personal relationships.
Lisa: It's helpful to have a group of peers, other board directors, to talk to and get advice from – so you have kind of a ‘sanity buddy’ as you begin this experience. Since recently joining a new board virtually, I think it’s really important to realize that it’s so helpful to spend time with the other board directors. There is so much to be gained from investing in that one-on-one time especially in this environment. It gives you a sense of the board culture to give you clues on how to make your entry and find your place. Some boards assign you a buddy or you can ask for a buddy. This will help you get through the material and learn the language of the company. With Zoom, it will help you to think through the dynamics and read the room, the ‘should I speak, when should I speak’ internal debate, which even if you were in the room, you might be torturing yourself over.
Stefanie: ESG is an important topic across the boards, across the country and really the whole world. Many companies, and some of the companies I’ve worked with, are trying to understand what ESG is for their company and how they can deliver, contribute and meet the needs of stakeholders. Companies are evaluating what they’re currently doing well and what parts of ESG they need to focus on. From my experience, it seems that companies have made a lot of progress on the (G) part, Governance, implementing corporate governance in the boardroom. Last year, the Social part (S) became a key initiative in companies with a focus on DEI (diversity, equity and inclusion) given the racial injustice that took place along with the focus on companies’ own employees, given the global pandemic. (E) for the Environmental part is the newer standard that companies are working on now. The questions are what are the Environmental standards and goals we should set to contribute to reduce the carbon footprint?
There are ESG discussions across the board, in the largest corporations all the way to small private companies. There’s a debate about whether this starts at the board or at the company. Questions are asked: How can you align and integrate ESG into your business strategy? I’ve worked with some companies where ESG is in pockets and places but not integrated into a full business strategy. There are questions from smaller private companies, like “what should we do with ESG? ESG came from institutional investors years ago with leaders like Larry Fink and it continues to grow, including more stakeholders like customers and employees. As ESG continues to grow, it’s a hot topic and as Board Directors, we can’t get enough information.
Lisa: I like to look at where sources of outside pressures are. In the past year, we’ve seen that the number of stakeholders who are very focused and increasingly activist with respect to the importance of ESG, has really escalated. And that has helped to drive change.
"Where there could have been a time when ESG was a nice-to-have, suddenly it has become a must have. It’s always wonderful when those things happen but often it’s in reaction to something that hasn’t been great."
Look at the reasons why diversity and race have become central topics, and why they have become part of the S - because of horrible things. But whatever is the source of outside pressure, who cares, as long as it creates a focus and an energy, and an allocation of resources. A challenge is that immediately boards go to what can be measured, and suddenly you find a morass of different ways to measure ESG. It can be easy to get deterred from the conversation about ESG and the important things that should be tackled first. What to measure and which measurement system to use, become an obstacle to the focus that is needed, on what aligns with the business and what makes sense for the company – this is what boardrooms are grappling with. I think it would be great to get some convergence around metrics, a pain point which I’m excited to see Nossa Data is focused on, and it would be great for there to be more clarity as to what ESG really means and what the different stakeholders want to hear.
Lisa: I’ll take the first one. The way that someone becomes a member of EWOB is to be referred by a current member and serve on at least one for-profit, public or private, board.
Stefanie: I agree with Lisa, it’s about referring our colleagues and friends to EWOB. I’ve enjoyed introducing a lot of very accomplished women to Lisa and they’ve all added tremendous value to EWOB. We will all continue to “pay it forward” as we bring in more accomplished women board directors and then they do the same. I’d also add that ESG is a very critical topic in boardrooms as it’s still in an early stage. Many companies are either developing their ESG strategy for the first time or building out their current ESG or previous initiatives like Corporate Social Responsibility. ESG is an important priority for our boards and many of us who are EWOB Members are working on it – by supporting the board, the company and the greater good of the world.
An interview with Brian Tomlinson, Director of Research at the CEO Investor Forum at CECP.