April 1, 2024 • 36 mins
We love our listeners! Drop us a line or give us guest suggestions here.
Episode Description
Nav Singh has held leadership roles at McKinsey's Boston office, including Managing Partner for Boston and Leader of the Global Innovation Practice. After retiring from McKinsey in 2023, he launched a new entrepreneurial venture, called 2123iX.
In this episode Nav’s shares valuable insights on effective board practices, the importance of innovation and technology in governance, and the critical role of diversity in fostering successful organizational leadership. The episode emphasizes the importance of proactive, informed, and collaborative board engagement to navigate the challenges and opportunities of the next century.
Big Ideas/Thoughts/Quotes
1. 2123iX - A Century of Innovation
The name 2123iX originates from Nav's retirement year (2023) and his vision to impact the next 100 years. Its focus is on creating a culture and mindset for longevity and innovation and emphasizes patience and quality in building companies that will make a significant difference.
"2123 stands for a 100 years, “I” stands for innovation, “X” stands for scale. The most important thing is: we're in no rush. We want to build high-quality companies over time, we'll be purposeful and take our time doing it."
2. Board Preparation Insights from McKinsey:
· Importance of thorough and honest preparation for board presentations
· Engaging discussions over presentations to drive meaningful decisions.
"In my mind, a good board discussion preparation requires an honest view of what are the risks, what could go wrong, what are the main issues we're trying to solve...It is that holistic view that in my mind makes a good board presentation and results in a good board discussion."
3. Characteristics of High-Performing Boards:
· The balance between healthy tension and collaboration between boards and management.
· The critical role of the board chair in setting a positive, inclusive culture.
· The necessity of continuous learning and adaptability among board members.
“Discussion is much more important than presentation. Sometimes people become enamored by our presentation and the materials. But its the discussion that you drive, the decisions that you drive that matters the most."
"The most important thing is one should be on the same page. People should be on the same team. People should be working towards the same goals… and there should be some healthy tension, that's good in my mind."
4. Diversity in Board Composition:
· The impact of diverse perspectives on boar
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:05):
Hello and welcome to On Boards, a deepdive at what drives business success.
I'm Joe Ayoub and I'm herewith my co-host Raza Shaikh.
Twice a month, On Boards is a placeto learn about one of the most
critically-important aspects of anycompany or organization - its board
of directors or advisors - witha focus on the important issues
(00:27):
that are facing boards, companyleadership and stakeholders.
Joe and I speak with a wide range ofguests and talk about what makes a board
successful or unsuccessful, what it meansto be an effective board member, and
how to make your board one of the mostvaluable assets of your organization.
Our guest today is Nav Singh.
(00:47):
Nav is a senior partner emeritus fromMcKinsey's Boston office where he
held a variety of roles, includingmanaging partner for Boston, leader
of the state and local practice inNorth America, leader of the Global
Innovation Practice and of McKinsey'sCenter of Government Governance, and
(01:08):
he was a member of the firm's Knowledgeand Technology Council as well.
He also holds 20 patents fromhis work prior to McKinsey.
He has served as the chair of the boardof the Greater Boston Chamber of Commerce.
He is a trustee at the Museum of Scienceand Worcester Polytechnic Institute.
(01:31):
He is also a member of the executivecommittee of Mass High Tech Council.
Now, he retired from McKinsey in 2023and is now reinventing himself as he
pursues his entrepreneurial passions.
He has founded a platform called2123iX with an aspiration of helping
(01:54):
launch companies that will make adifference over the next 100 years.
Nav, it's great to have youhere with us on On Boards today.
Thank you, Joe and Raza.
It's a pleasure to be here andthank you both for all what you do.
As a start, tell us about whatthe platform 2123iX means.
(02:15):
It's obviously somethingambitious, because if you're
going to solve the problems ofthe next 100 years, it must be.
But what does it stand for?
I think the most important thing is, thereis, I hope, going to be a lot of fun.
2123 came because I retired in2023, 2123 is 100 years from now.
(02:37):
I've had the pleasure of working withtwo great companies, GE and McKinsey,
both 100 years, almost one of themand one of them much more than 100.
I've had the pleasure of working withmany clients and many institutions
that have survived 100 years.
It takes a different type of a cultureand mindset to survive that time.
Very few people do.
So, yes, we're being ambitiousby taking a 100-year look.
(03:00):
I've also had the pleasure of working withmany venture capitalists, many PE firms,
many, different types of tech companies.
I'm a huge fan of technology,a huge fan of innovation.
If you just think about it, theprogress we've made over the
last 20 years from a technologyperspective has been mind blowing.
None of us would have guessed that.
I remember in '89, we barelywere using emails at that
(03:23):
time, and look, we have come.
So, just take a 100-yearoutlook, technology is going
to transform us dramatically.
So, 2123 stands for a 100years, I stands for innovation.
X stands for scale.
The most important thingis we're in no rush.
We want to build a high-quality companyover time, and we'd be purposeful
and take our time towards it.
(03:45):
I will be watching carefullyto see what you do, and I'm
sure it will be interesting.
Thanks.
So, in your years with McKinsey,you had the opportunity many
times to work with management inpreparation for board meetings.
Let's start with some observationsabout the prep work that you observed.
What did you see that was good?
(04:06):
What did you see that concerned you?
So, look, I had the pleasure ofbeing in multiple boardrooms,
helping multiple management teamsprepare for the board presentations.
As you may know, like McKinsey, I had theprivilege of working with the C-suite,
with the CEOs, and they're a layerdown and sometimes two layers down.
(04:27):
And often when a board topic iscoming up they need some external
advice, they need to get preparedaround issues, and we had the pleasure
of partnering with many of them.
Some of them are big decisions.
For example, should we do M&A ornot, or what types of deals to do?
Some could be cultural issues, some couldbe technological issues, some could be
portfolio issues, all kinds of issues.
(04:48):
The board presentation isfun because it's a purpose.
There's a date thatone is working towards.
Everybody's clear on the goals.
Everybody makes a time.
You know that your materialswill not go into a bookshelf.
They will be used for a good discussion,hopefully drive some decisions.
In my mind, a good board discussionpreparation requires an honest view
(05:11):
of what are the risks, what could gowrong, what are the main issues we're
trying to solve, really understandthe market, have some logic to it.
Have key decisions outlined, what isthe decision we're trying to make,
what are the options around those,what are the pros and cons of that.
It is that holistic view that in mymind makes a good board presentation
(05:34):
and a good board discussion.
I would say discussion is muchmore important than presentation,
because people get enamored by ourpresentation and the materials.
It's that ultimate discussionthat you drive, the decisions that
you drive that matters the most.
Amen.
Amen.
I couldn't agree more.
I think presentations should bevery short at board meetings.
But in terms of the rigor with whichmanagement prepared what they were doing,
(05:59):
was there a variance in what you saw?
How did various management groups thatyou work with approach what they were
going to put together for the board?
I think the most important thingis how much the CEO and the
management people are engaged.
There were some who thought the topicthat was being discussed was worthy
of a lot of the time and they spentquite some time because it was a big
(06:23):
material decision, and the most importantthing as a consultant should aspire
towards is a management owning therecommendations, owning that decision.
So, when the management team is intimatelyengaged in a board topic, that leads to a
much better outcome because ultimately themanagement owns it, and that is nirvana
for a consultant, because you want topartner with the management team and
(06:46):
work with them to make things happen.
Now, what sometimes on the otherside happens is, a board and the
questions that the board ask and theboard prep can create a lot of work.
It can create a lot of work for themanagement teams, and sometimes as
I went through this exercise whenthe teams are ultimately engaged,
you wonder when do they reallyget the time to do other things.
(07:08):
I think it's a balance so the board candrive great things, but can also create a
lot of work for the organization, a lot ofchurn, and remember, you're working with
the CEO and sometimes their teams, andit's getting a huge amount of work across
the whole ecosystem, so one has to be verycareful from a board perspective with the
questions that you ask, the materials thatyou asked for and how much time and rigor
(07:31):
a management team should spend on it.
If it's a big decision,Joe and Raza, go all in.
If it's a minor decision, becareful of not overdoing it.
Now, that's good advice.
Now, one of the things you mentionedwhen we talked about this a week or
so ago was that on some occasions,they would ask you to be there for
the board meeting, and sometimes not,and that's certainly my experience.
(07:54):
I'm sure Raza as well.
In my view, if you want the board toreally understand a critically-important
issue, I would raise the question, whynot have the expert, not the whole team,
you don't want too many bodies in theroom, why not have the lead consultant
(08:14):
or whoever it is that's helping you withthis topic, be in the room so the board
has an opportunity not to just hear thepresentation, but to ask questions that
will help create a better discussion.
What your thoughts about that?
I think, as I shared lasttime I am mixed beyond this.
On one hand, I think there are timeswhen they should be in the room because
(08:38):
there are some big provocative decisionsthat's being made and having a full view
and understanding and being prepared toanswer the questions of the board in a
very independent way is very powerful.
I think that's part one.
At times, though it's totally fine forus not to be there, because ultimately
we are working for the management andthe management may have 10 different
(09:00):
things that they're working through andour component and our work could be one
part of it, nine out of 10 parts couldbe other parts that they're working on.
At times, the CEOs will notwant us to be there, and
sometimes they're big decisions.
But if that's the case, that'sa minority when that happens,
I think, but that's a choice.
That's a relationship between the boardand the CEO and the leadership team.
(09:21):
It may not be the bestoutcome, but that's fine.
I think it is their choice.
I think life is about judgments.
Yes, as a board member, if I ever wanted,I can always go back and say, "Look,
I do want to do a deep dive into thisand I would like to talk to X and Y."
I know I'm not being prescriptiveas to what is the right answer.
In my mind, it is judgment and Ithink as long as we are there for
(09:42):
the big decisions, and at least ourthinking is being represented well,
that's the most important thing.
Well, my concern would be if thereason ultimately was that management
wanted to manage the issue.
That is, that maybe not put everythingout there for the board because they
want the board to go in a certaindirection, and that would be my concern.
(10:07):
So, yeah, I understandit's management's decision.
But when management is working atthe highest level, they are often
incredibly inclusive with bringingall of the information to the board
so the board can really understand it,ask the difficult questions, challenge
maybe what management is thinkingappropriately, and make the discussion
(10:31):
as deep and productive as possible.
So, that will get us into the next topicthat I wanted to kind of get into with
you which is, what are the board practicesand characteristics of a high-performing
board that you saw and the one that,when we talked before, we'll go through
a few of them, that you talked a lotabout the last time was collaborative
(10:52):
approach, which makes a lot of sense.
Talk a little bit about whatyou've observed and and why that
is such an important aspect tomaking a board really effective.
Yeah, this is a tricky topic, because theboard has a responsibility of oversight.
The management has a responsibilityof driving impact and delivering.
(11:13):
There should be some natural tensionand there should be some healthy
tension, and that's good in my mind.
But the most important thing isone should be on the same page.
People should be on the same team.
People should be workingtowards the same goals.
In the process, if there's somehealthy tension, that's totally fine
and that should be there, so I haveno concerns about the healthy tension.
(11:34):
I do have concerns about unhealthytension, when the board wants
to do the management's job.
As you know, many of the board membershave prior leadership experiences.
They always go back to, "This is how Idid it, and I was so good at what I did.
You all don't know what you're doing."
Sometimes that creeps naturally.
I think as you have confident leaders onthe board, I think that naturally happens.
(11:56):
The urge that every board member,in my mind, should prevent is
that, look, they're not management.
They have a different role.
Healthy tension is perfectly fine,having an expectation is fine, but
doing the management's job is not fine.
By the way, if you don't likethe CEO and the leadership
team, you need to act on that.
And at times one needs to acton it and that's totally fine.
(12:16):
In that case, if the tension is evenhigher and maybe even unhealthy,
that's okay, because that isa tough decision that needs to
be made, but that is very rare.
In most cases, people are trying tomake a difference with the existing
team and are very happy with the team.
How do you collaborate and what isthe culture that you create, because
(12:37):
the board also has a responsibilityof beyond being the healthy, the
source of healthy tension, theyalso are a source of inspiration.
They need to inspire the management team.
They need to do thisin a constructive way.
That in my 23 years, the topleaders also need some inspiration.
They need some encouragement.
They need some love at times, and theboard plays a critical role in doing that.
(13:00):
That is an excellent observation and afair thing to hold the board to, I think.
You talked about a healthy tension,which I think makes a lot of sense,
and, of course, it's true that theboard shouldn't get into management.
We know that and sometimes thatline is not as clear as it might be.
(13:20):
On the other hand, there are managementteams that don't want the board to
get fully into a subject because, asI said, they may have other reasons.
Maybe they're goodreasons, maybe they're not.
And so one of the things we didtalk about before, another important
factor in boards, is the roleof the chair in helping to set
(13:40):
the tone for the board culture.
Talk a little bit about the role thatthe board chair can play and the impact
he or she can have on board culture.
Joe, you and I have been Celtics fans,as you know, I'm not sure about Raza.
I'm sure he's a Celtics fan also.
I almost see the role of the board chairas a coach as well, and they have a
(14:05):
team and the team is the board, and itis critical for them to make sure that
the team is working well as a team andthe culture of the team is important.
I think people often try tofix the culture bottoms up.
I personally think the culture has tobe addressed top down and the role of
the CEO and the chair in defining theculture of a board is absolutely critical.
(14:27):
You should be able to raise the questions.
You should be able to ask the tough ones.
You should be able to say, "Look,I don't agree with the decision."
You should have the encouragement.
The board members should get the feedback.
One should be always asking boardmembers so the board members
are going to come at the time.
We should be always asking them in anindependent way what do they think.
(14:49):
This could be during the boardmeeting or after the board meetings.
This culture that we are all on thesame team and the chair together with
the CEO are the captains of the team,because I do think the CEO plays an
equally critical role out here, butthe role of the chair in terms of the
dialogue, in terms of the discussion,in terms of the agenda, in terms of
(15:10):
ensuring that all the board membersare being heard, listening to them.
We talk about inclusion.
Inclusion in my mind is just notrace or gender or color, whatever.
Inclusion in my mind is listening topeople, hearing them out, getting their
point of view, because otherwise why havea board if you're not listening to them,
and I think in my mind, the chair playssuch a critical role in any of that.
(15:35):
I love the analogy to the coach of aNBA basketball team, and in thinking
that through, one of the things thatI think is a great practice is, the
analogy I'll make is, that when yougo into executive session, it's kind
of like a timeout, and coaches needto take a time out now and then.
I know Joe Mazzulla is taking more thisyear than last year and it seems to
(15:58):
be working well, but having the teamtogether and with the chair coaching
them or guiding them and thinkingabout what are we doing and what are we
talking about and what are the issueswe may have with management, that's kind
of an interesting way to look at it.
Thanks for raising that.
Joe, I have to add one more thing.
In my mind, feedback is gift.
(16:20):
The chair should proactively beasking for feedback, what's working
well and what is not working well.
I've seen some board chairs do itextremely well, and I've seen the
board discussions get better over time.
And some don't ask.
In my mind, having the mix, having thecourage to ask the board members as to,
"Hey, give me feedback on what i'm doingwell versus not doing well," because none
(16:40):
of us get trained to be a board chair Webarely get trained to be a board member.
And even if you are trained,every board is different,
like every team is different.
So, the way you coach one team isgoing to be really different from team
to team or from board to board, soeven if you've served as chair, new
company, new subject, new management,new board, maybe a different approach.
(17:04):
I think that is a really great comment.
It strikes me as being fundamental to thevery important role that a chair plays.
If you're going to give feedback tothe CEO, yeah, you should be giving
feedback to the chair too, because theCEO and the chair both have to function
at a high level for all this to work.
One of the things we've all talked about,the three of us, is about the importance
(17:27):
of diversity of perspective on the board.
That's what makes a board strong.
And one of the things you have said whenwe've talked is, yeah, I mean, of course,
it means gender, of course it meansracial, but it's so much more than that.
If you could just expand on how youlook at diversity of perspective
or diversity generally on a boardand how that might be viewed.
(17:52):
Yeah, so as I said, of course, it'sgender, of course, it's race, of course,
it's like color, so we should neverever move away from that perspective.
But that said, we're notstressing enough about age.
Often people are servingall kinds of demographics.
People in the 30s may not resonate withthe people in the 40s and 50s and so on,
and one needs to keep that in mind also.
(18:13):
Age is an important part that we arenot explicitly talking about enough.
Skills, what skills do they bring?
I go back to our favoriteNBA coaching analogy.
You would not pick a team thatdid not have different skills,
and what skills they bring andhow they complement each other.
I think having the skills and thecapabilities becomes very, very key in
(18:35):
my mind, and we'll talk about technologysoon and having the right skills out
there becomes critical in my mind.
But the most important thing inmy mind is a learning ability.
A board member should be willing tolearn and be a sponge, be a great
listener, be able to go in andunderstand the management's perspective.
(18:56):
If needed, dig in deeper.
Be willing to understand the market.
Be willing to go all in andthe learning capability.
The diversity of that becomes criticalbecause at times, as all of us sit on
the board, we think we know it all and wehave done this for so many years, but in
my mind, we have not learned enough yetand we should be learning all the time.
(19:16):
So.
To me, that is a critical, critical skill.
I would just urge people to think aboutdiversity in a holistic way and to
think about the complete team and thecomplete mix of things that we want.
Well, two other things I want to askyou about before we get into a focus on
AI, which I know is top of mind for manyof us, but certainly for you, is the
(19:38):
board's role in identification of risk.
I think, again, when we talked earlier,we talked a lot about, sure, the audit
committee, a lot of times, that'swhere identification kind of resides.
But the audit committee isfocused on finances and it's
focused on what happened, notwhat is going to happen so much.
(19:59):
What are your thoughts about how aboard can be best prepared or best in
a position to identify major risks inthe future in terms of the strategy
of the company or the position of thecompany or the brand of the company?
I think risk is where mostboards should earn their living.
(20:19):
I believe in offense and defense,and of course, we need to think
offense, but I've seen nobody win achampionship just based on offense.
We can only win a championship ifyou can do both extremely well.
Yeah.
In terms of defense, look,it is not the obvious stuff.
In my mind, board members donot earn the keep or their time
commitment just by doing the obvious.
(20:41):
They need to think around the corner.
They need to think ahead.
They need to think aboutwhat could go wrong.
Defense means, in this case,thinking about what could go wrong.
And of course we have an auditcommittee and people do all the work.
I think that to me is table stakes.
That's a must do and everybody should do.
But thinking ahead on the risk, forexample, due to political risk a few
(21:03):
years ago, some of the risks thatwe have right now did not exist.
A few years from now, the risks thatare likely going to come up will likely
not exist, so being on top of those.
If you look at cybersecurityrisk, it's a major, major risk.
It's a huge risk forall of us at this stage.
And in my mind, I'm notsure if it's preventable.
I have to say that.
I hope it's preventable.
I'm not sure if it really is.
(21:25):
If you would assume that,I'll be prepared for it.
If there was a cyberattack, what do we do?
If you look at the market risk, I thinkthis is the single biggest one that I
do not think people think enough about,what could go wrong with our market?
Who are the new entrants?
Who are the attackers?
Are they gaining market share?
(21:46):
How could they enter our space,and how do we think about that?
To me, risk is holistic and oneneeds to be fully on top of that.
But I think beyond that, one alsoneeds a framework and a process and
a systematic approach to assess risk.
I've seen some great managementteams who put that into place and
it goes up to the board also, butbecause it forces you to think.
(22:09):
If you're having a good risk discussion,if your head does not hurt by the end
of the discussion, there's a problem.
Because it is just not theidentification of risk, what is the
abatement plan, who is going to workon that, how do we address that?
Again, going back to the learningpoint, being like curious about all
kinds of topics and being aware ofwhat could go wrong, so risk is a
(22:33):
huge hot button for me all the time.
And as I said, you can't wina championship without great
defence and defense to ascertainrisk for a company and a board.
What are your thoughts about havinga separate risk committee, separate
from the audit committee on a board?
I'm not a big fan of creating toomany committees, but the risk one,
I would prioritize above anythingelse, because this team should be
(22:54):
thinking about what could go wrong,not what is obvious because what is
obvious hopefully is being addressed.
What could go wrong is much tougher.
We've heard some guests say, "Well, isn'trisk really a full board responsibility
that should be a board discussion?"
And kind of my reaction to that is sureeverything's a board discussion but who
(23:15):
are the people that are kind of chargedwith thinking and really focusing on the
risk aspect because you don't really havetime to do it at every board meeting.
So, if there's not a group kind offully involved and responsible for
risk, I think it's very easy to missstuff and all you have to do is miss
one really important item in thefuture, a market risk, an investment
(23:39):
risk, a failure to take, and that willhave a huge impact on the company.
As you can see, I'm biased towardshaving such a committee, and I would
also say it's important to change thecompositions of this team over time.
Of course, you need some boardparticipation, but then as a risk evolve
over time, you should have differentpeople thinking about who should be
(24:01):
a member of the risk committee andwhat perspectives they can bring.
I think I will go back to mydiversity point, how do you
get diverse points of view.
It's a very different profile.
By the way, as I've worked with manyscience-oriented teams, the best
way to assess risk is not with theleadership team, it is to go two or three
levels down and sit in the cafeteriaand ask people what could go wrong.
(24:25):
And some of these peopleare very, very open.
If you were to put them in a spotand say, what could go wrong, you
get the best insights because theyare on the front lines living it.
That is a really interesting perspective.
I agree.
Obviously, management has to becomfortable with you talking to people
three levels down, but if you want togather information, again, a broader
perspective, because senior managementis focused on what they're focused on.
(24:50):
They may not see some of thethings coming that some other folks
in the organization might see.
Joe, I think one of the best practices,which I implemented when I was a
chair of the University of MinnesotaChemical Engineering & Materials
Science Board, we had the students comein without the faculty in the room.
Those were the best insights, and we toldthem, "Look, anything you say stays here."
(25:16):
Maybe we're not sure who said what,but for the advisory board, that
was incredibly helpful in thinkingthrough what other things are
said that need to be addressed.
Great approach.
I really loved that.
Now, one of the risk that is obviouslyemerging and we talk a lot about it is AI.
(25:38):
You mentioned that it's the singlemost disruptive technology we've
encountered in our lifetime.
How do you see boardsgetting prepared for that?
I would say first, AI isthe flavor of the month.
Some would say, flavor of the year.
I would say it has been a flavor foryears, because we're getting excited
about GenAI right now over the last, butAI has been around for a long time and
(26:01):
it is making a big difference forever.
But more broadly, Raza,I would say technology.
Technology is evolving all the time,and how do we stay on top of that?
But the reason why I get excited about AIand other technology areas is, look, the
GDP of the world right now is roughly giveor take around 80 to 90 trillion dollars.
Our McKinsey Global Institute colleagues,some incredible work they've done that
(26:24):
shows the math of the impact of AI,between 17 to 26 trillion dollars.
Wow.
That's a pretty massive number.
If I look at the pharmaceutical area,which I work, and you're talking about
100 billion dollars worth of impactfrom AI, these are massive numbers.
Given that macro impact and the macroscale, in my mind, and the way it's
(26:48):
going to touch everybody, it's criticalfor a board to be fully on top.
Not every member may be on top, but a goodchunk of members should be fully on top.
There are two reasons for it.
I, again, go back to offense and defense.
Look, if you're not playing defenseout here, you will likely get
impacted in a significant way becausesomeone is going to enter your
(27:09):
field and disrupt you completely.
There's a huge option for offenseas to how do you play offense
given the numbers we're talkingabout, they are mind blowing.
How do you play offense out here?
But the most important thing is tofigure out what is fluff and what is not.
Raza, you've been doing this, likeliving with your fund, to be able
to filter out what is good versusnot, and what are the markers we're
(27:31):
going to have that help us decide?
Because it is not ultimatelywhat a company invests in AI in
terms of the dollars, but it's apeople, it's a time commitment.
So, having all that judgmentand that filtering, and
it's changing by the minute.
think it's great the way you put it.
I think what it implies is that thosesubstantial portion of the board that
(27:54):
needs to be ready, needs to understandtechnology in general and the flavor
of the month, in particular, andthen tie it to the opportunities and
risks for the enterprise and how toview that and how to make decisions
around various aspects of AI from biasto hallucinations to other things.
(28:14):
One thing that I wanted to get yourtake on is for at least publicly-traded
companies, as an example, that thereis a requirement for having a financial
experts on the audit committee.
Would it mix?
And taking another example, the DCROInstitute provides qualified risk
(28:36):
director certifications and their visionis that at some point, having a risk
expert should be required on variousparts of the board, would you be in
favor of having a required or mandatedtechnology or AI experts on the board?
(28:58):
I am having a pause becauseI'm not a big fan of mandating
anything, but should one do it?
Maybe yes, as long as you don'tcreate a lot of bureaucracy around
that, go back to the role of thechair and the CEO as a co-captain.
It's a responsibility that they havethe right people on these teams.
(29:18):
It's just not about the certification,Raza, as you know, I mean, the way
things are moving, if you are stuck intwo weeks of old, I mean, you missed it.
Things are moving so rapidly, so thisis why I go back to the capability
I talked about, they should betechnically competent, but willing to
learn a lot, stay on top of the news,understand the implications of that.
(29:38):
Going back to your hallucinationspoint, I mean, yeah, these systems
are hallucinating right now.
Five years from now, willthat have improved or not?
And I hope so.
I'm no AI geek out here.
I am trying to barely keep up,but I hope that some of these
things will improve over time.
One has to assume that.
(30:00):
But I think the second order impactof what comes from AI as it becomes
real, it becomes huge in my mind.
I'm not a big fan of certification, buteverybody should be willing to learn
and a good chunk should be AI competent.
Yeah, I think in some ways, short ofmandating or even a guideline, that it
is a very important column in the skillsmatrix that the board needs to recruit
(30:24):
for, and you should have it there.
And then on top of that, as you mentionedearlier, that a substantial portion of the
board needs to kind of constantly developtheir understanding and knowledge of this.
It's just moving very fast.
My impression, and as we talked aboutearlier, I think if you're just trying
to train people, yes, you can train them,that gets them to level one in my mind and
(30:47):
the journey we are going on is one to 10.
So.
Going from zero to one is critical.
I have no doubt about that, butthe journey from one to 10 will be
self-driven, so they need to drive it.
The board members need to drivethe journey from one to 10 because,
Joe, I mean, even this was the baseaverage which we are going, something
that is two weeks old is too old.
(31:09):
That's quite a challenge, actually, toexpect that board members on every board,
for public and private companies, willhave enough self-motivation to continue
to learn at a very quick pace about abroad and fast changing subject matter.
(31:30):
It's certainly a good idea, butto expect that board members
will do it on every board withoutsome kind of guideline, or even a
mandate, I think may be unrealistic.
Not every board member needs to doit, but there should be a reasonable
chunk of board members who arewilling to stay in with the times.
Now, I've wondered what should bethe mix of this, but I go back to
(31:55):
look at the last 20 years and theimpact of technology in our lives.
People talk about high tech top companies,mega seven and so on, but look at
the disruption that they've created.
Look at the cashflow that they have.
Look at the impact that they have.
I would rather be in the business any day,and that requires a lot more competence.
Should people becompetent as they come in?
(32:18):
Yes.
Some would be nice, but the mostimportant thing is, are they willing to
learn, because if you just take lightpace of every two weeks to the next
five years and 10 years, if you're notkeeping pace, how far behind you are?
I think that's where the so calledwinners and losers will be made.
People who catch up to AI, and asan organization, as management, as
(32:41):
board are able to learn and turnthat into an opportunity would
be the winners and successors.
Let's just talk a minute about the GreaterBoston Chamber of Commerce Board for
which you served as chair for three years.
During your term and the subsequentterms of Paul, my brother,
(33:01):
Micho Spring and John Fish.
The board has undergone areally significant change
in terms of its composition.
It'd be great if you couldtalk a little bit about that.
So, I think in my mind, this is a greatexample of the CEO and the multiple
board chairs working as a team.
This is all going with John Fish whowas the chair before me, and then we had
(33:27):
Paul Ayoub, your dear brother, who dida remarkable job, and then Micho, and
then Ronald Hanley, then Karen Kaplan,who was the chair before John Fish.
This always has been a theme.
This always was a topic, and Ithink we talked about diversity and
we said, "Look, why can't we fixit on the Chamber of Commerce and
be a role model to the community?"
That was the theme out here.
(33:49):
And this was a consistent thing.
Yvonne Garcia joined the boardas a nominating and gov chair.
She together with Paul havedone a remarkable job in
continuing that momentum.
But it also goes back to theCEO, Jim Rooney has been a
consistent force on this.
His whole team is diverse, plus he hasbeen the one who has been, we of course
push him, the one person who has ensuredthat among the different chairs, every
(34:12):
chair has had the same team, but Jimhas been constant throughout this also.
I think again, it goes back tomy point about collaboration
and about partnerships.
You don't move anything in aday or two, or an year or two.
You move these needles in 5-10 years,and the role that Paul Ayoub, your dear
brother played was extremely critical.
I could go around each of the chairsand all of them have played a huge role.
(34:35):
Ron O'Hanley is a chair right now,and he's doing a tremendous job.
So, things get moved over time.
In my mind, this is a great example.
We are more than 50% women now on theboard, and I think in terms of people
of color, we are approaching 40%.
If I'm not right, it'srough roughly there.
Does it meet all the otherdiversity criteria I talked about
in terms of technology, in termsof age, in terms of capabilities?
(35:00):
Not yet.
So, I think that work is still to be done.
I also showed an example of Museumof Science, where there are a lot
of people who are experts in biotechand life sciences, and there, as I
chaired the committee for nom andgov there we are trying to ensure
that we have different industries.
I think we go back to the firstdiscussion we had, diversity is
(35:21):
multifaceted and one needs tothink about this in a holistic way.
I'm very proud of the work the Chamberof Commerce has done and everybody else
I think lauds that also, but hopefully wewill keep working on that for a long time.
Thank you.
I think the mission to achieve really afull diversity on the chamber board over
(35:41):
time has set an incredibly strong example.
As you said, it serves as a rolemodel for the business community.
And there's nothing better to try tosend a message than actually doing it
rather than telling people to do it.
Kudos to you and the chairs beforeand after you that all worked together
with Jim Rooney to make that happen.
(36:03):
Nav, it's been greatspeaking with you today.
Thank you so much for joining us.
You're welcome.
It was a pleasure and thank you bothfor what you're doing and I look
forward to listening to this podcast.
And thank you all for listening to OnBoards with our special guest, Nav Singh.
Please visit our websiteat OnBoardsPodcast.com.
(36:26):
That's OnBoardsPodcast.com.
We'd love to hear your comments,suggestions, and feedback.
And if you're not already a subscriber,please be sure to subscribe at Apple
Podcasts, Spotify, or wherever youget your podcasts, and remember
to leave us a five-star review.
Please stay safe and take careof yourselves, your families, and
your communities as best you can.
(36:48):
We hope you'll tune in forthe next episode of On Boards.
Thanks.
Hello and welcome to On Boards, a deepdive at what drives business success.
I'm Joe Ayoub and I'm herewith my co-host Raza Shaikh.
Twice a month, On Boards is a placeto learn about one of the most
critically-important aspects of anycompany or organization - its board
of directors or advisors - witha focus on the important issues
(00:27):
that are facing boards, companyleadership and stakeholders.
Joe and I speak with a wide range ofguests and talk about what makes a board
successful or unsuccessful, what it meansto be an effective board member, and
how to make your board one of the mostvaluable assets of your organization.
Our guest today is Nav Singh.
(00:47):
Nav is a senior partner emeritus fromMcKinsey's Boston office where he
held a variety of roles, includingmanaging partner for Boston, leader
of the state and local practice inNorth America, leader of the Global
Innovation Practice and of McKinsey'sCenter of Government Governance, and
(01:08):
he was a member of the firm's Knowledgeand Technology Council as well.
He also holds 20 patents fromhis work prior to McKinsey.
He has served as the chair of the boardof the Greater Boston Chamber of Commerce.
He is a trustee at the Museum of Scienceand Worcester Polytechnic Institute.
(01:31):
He is also a member of the executivecommittee of Mass High Tech Council.
Now, he retired from McKinsey in 2023and is now reinventing himself as he
pursues his entrepreneurial passions.
He has founded a platform called2123iX with an aspiration of helping
(01:54):
launch companies that will make adifference over the next 100 years.
Nav, it's great to have youhere with us on On Boards today.
Thank you, Joe and Raza.
It's a pleasure to be here andthank you both for all what you do.
As a start, tell us about whatthe platform 2123iX means.
(02:15):
It's obviously somethingambitious, because if you're
going to solve the problems ofthe next 100 years, it must be.
But what does it stand for?
I think the most important thing is, thereis, I hope, going to be a lot of fun.
2123 came because I retired in2023, 2123 is 100 years from now.
(02:37):
I've had the pleasure of working withtwo great companies, GE and McKinsey,
both 100 years, almost one of themand one of them much more than 100.
I've had the pleasure of working withmany clients and many institutions
that have survived 100 years.
It takes a different type of a cultureand mindset to survive that time.
Very few people do.
So, yes, we're being ambitiousby taking a 100-year look.
(03:00):
I've also had the pleasure of working withmany venture capitalists, many PE firms,
many, different types of tech companies.
I'm a huge fan of technology,a huge fan of innovation.
If you just think about it, theprogress we've made over the
last 20 years from a technologyperspective has been mind blowing.
None of us would have guessed that.
I remember in '89, we barelywere using emails at that
(03:23):
time, and look, we have come.
So, just take a 100-yearoutlook, technology is going
to transform us dramatically.
So, 2123 stands for a 100years, I stands for innovation.
X stands for scale.
The most important thingis we're in no rush.
We want to build a high-quality companyover time, and we'd be purposeful
and take our time towards it.
(03:45):
I will be watching carefullyto see what you do, and I'm
sure it will be interesting.
Thanks.
So, in your years with McKinsey,you had the opportunity many
times to work with management inpreparation for board meetings.
Let's start with some observationsabout the prep work that you observed.
What did you see that was good?
(04:06):
What did you see that concerned you?
So, look, I had the pleasure ofbeing in multiple boardrooms,
helping multiple management teamsprepare for the board presentations.
As you may know, like McKinsey, I had theprivilege of working with the C-suite,
with the CEOs, and they're a layerdown and sometimes two layers down.
(04:27):
And often when a board topic iscoming up they need some external
advice, they need to get preparedaround issues, and we had the pleasure
of partnering with many of them.
Some of them are big decisions.
For example, should we do M&A ornot, or what types of deals to do?
Some could be cultural issues, some couldbe technological issues, some could be
portfolio issues, all kinds of issues.
(04:48):
The board presentation isfun because it's a purpose.
There's a date thatone is working towards.
Everybody's clear on the goals.
Everybody makes a time.
You know that your materialswill not go into a bookshelf.
They will be used for a good discussion,hopefully drive some decisions.
In my mind, a good board discussionpreparation requires an honest view
(05:11):
of what are the risks, what could gowrong, what are the main issues we're
trying to solve, really understandthe market, have some logic to it.
Have key decisions outlined, what isthe decision we're trying to make,
what are the options around those,what are the pros and cons of that.
It is that holistic view that in mymind makes a good board presentation
(05:34):
and a good board discussion.
I would say discussion is muchmore important than presentation,
because people get enamored by ourpresentation and the materials.
It's that ultimate discussionthat you drive, the decisions that
you drive that matters the most.
Amen.
Amen.
I couldn't agree more.
I think presentations should bevery short at board meetings.
But in terms of the rigor with whichmanagement prepared what they were doing,
(05:59):
was there a variance in what you saw?
How did various management groups thatyou work with approach what they were
going to put together for the board?
I think the most important thingis how much the CEO and the
management people are engaged.
There were some who thought the topicthat was being discussed was worthy
of a lot of the time and they spentquite some time because it was a big
(06:23):
material decision, and the most importantthing as a consultant should aspire
towards is a management owning therecommendations, owning that decision.
So, when the management team is intimatelyengaged in a board topic, that leads to a
much better outcome because ultimately themanagement owns it, and that is nirvana
for a consultant, because you want topartner with the management team and
(06:46):
work with them to make things happen.
Now, what sometimes on the otherside happens is, a board and the
questions that the board ask and theboard prep can create a lot of work.
It can create a lot of work for themanagement teams, and sometimes as
I went through this exercise whenthe teams are ultimately engaged,
you wonder when do they reallyget the time to do other things.
(07:08):
I think it's a balance so the board candrive great things, but can also create a
lot of work for the organization, a lot ofchurn, and remember, you're working with
the CEO and sometimes their teams, andit's getting a huge amount of work across
the whole ecosystem, so one has to be verycareful from a board perspective with the
questions that you ask, the materials thatyou asked for and how much time and rigor
(07:31):
a management team should spend on it.
If it's a big decision,Joe and Raza, go all in.
If it's a minor decision, becareful of not overdoing it.
Now, that's good advice.
Now, one of the things you mentionedwhen we talked about this a week or
so ago was that on some occasions,they would ask you to be there for
the board meeting, and sometimes not,and that's certainly my experience.
(07:54):
I'm sure Raza as well.
In my view, if you want the board toreally understand a critically-important
issue, I would raise the question, whynot have the expert, not the whole team,
you don't want too many bodies in theroom, why not have the lead consultant
(08:14):
or whoever it is that's helping you withthis topic, be in the room so the board
has an opportunity not to just hear thepresentation, but to ask questions that
will help create a better discussion.
What your thoughts about that?
I think, as I shared lasttime I am mixed beyond this.
On one hand, I think there are timeswhen they should be in the room because
(08:38):
there are some big provocative decisionsthat's being made and having a full view
and understanding and being prepared toanswer the questions of the board in a
very independent way is very powerful.
I think that's part one.
At times, though it's totally fine forus not to be there, because ultimately
we are working for the management andthe management may have 10 different
(09:00):
things that they're working through andour component and our work could be one
part of it, nine out of 10 parts couldbe other parts that they're working on.
At times, the CEOs will notwant us to be there, and
sometimes they're big decisions.
But if that's the case, that'sa minority when that happens,
I think, but that's a choice.
That's a relationship between the boardand the CEO and the leadership team.
(09:21):
It may not be the bestoutcome, but that's fine.
I think it is their choice.
I think life is about judgments.
Yes, as a board member, if I ever wanted,I can always go back and say, "Look,
I do want to do a deep dive into thisand I would like to talk to X and Y."
I know I'm not being prescriptiveas to what is the right answer.
In my mind, it is judgment and Ithink as long as we are there for
(09:42):
the big decisions, and at least ourthinking is being represented well,
that's the most important thing.
Well, my concern would be if thereason ultimately was that management
wanted to manage the issue.
That is, that maybe not put everythingout there for the board because they
want the board to go in a certaindirection, and that would be my concern.
(10:07):
So, yeah, I understandit's management's decision.
But when management is working atthe highest level, they are often
incredibly inclusive with bringingall of the information to the board
so the board can really understand it,ask the difficult questions, challenge
maybe what management is thinkingappropriately, and make the discussion
(10:31):
as deep and productive as possible.
So, that will get us into the next topicthat I wanted to kind of get into with
you which is, what are the board practicesand characteristics of a high-performing
board that you saw and the one that,when we talked before, we'll go through
a few of them, that you talked a lotabout the last time was collaborative
(10:52):
approach, which makes a lot of sense.
Talk a little bit about whatyou've observed and and why that
is such an important aspect tomaking a board really effective.
Yeah, this is a tricky topic, because theboard has a responsibility of oversight.
The management has a responsibilityof driving impact and delivering.
(11:13):
There should be some natural tensionand there should be some healthy
tension, and that's good in my mind.
But the most important thing isone should be on the same page.
People should be on the same team.
People should be workingtowards the same goals.
In the process, if there's somehealthy tension, that's totally fine
and that should be there, so I haveno concerns about the healthy tension.
(11:34):
I do have concerns about unhealthytension, when the board wants
to do the management's job.
As you know, many of the board membershave prior leadership experiences.
They always go back to, "This is how Idid it, and I was so good at what I did.
You all don't know what you're doing."
Sometimes that creeps naturally.
I think as you have confident leaders onthe board, I think that naturally happens.
(11:56):
The urge that every board member,in my mind, should prevent is
that, look, they're not management.
They have a different role.
Healthy tension is perfectly fine,having an expectation is fine, but
doing the management's job is not fine.
By the way, if you don't likethe CEO and the leadership
team, you need to act on that.
And at times one needs to acton it and that's totally fine.
(12:16):
In that case, if the tension is evenhigher and maybe even unhealthy,
that's okay, because that isa tough decision that needs to
be made, but that is very rare.
In most cases, people are trying tomake a difference with the existing
team and are very happy with the team.
How do you collaborate and what isthe culture that you create, because
(12:37):
the board also has a responsibilityof beyond being the healthy, the
source of healthy tension, theyalso are a source of inspiration.
They need to inspire the management team.
They need to do thisin a constructive way.
That in my 23 years, the topleaders also need some inspiration.
They need some encouragement.
They need some love at times, and theboard plays a critical role in doing that.
(13:00):
That is an excellent observation and afair thing to hold the board to, I think.
You talked about a healthy tension,which I think makes a lot of sense,
and, of course, it's true that theboard shouldn't get into management.
We know that and sometimes thatline is not as clear as it might be.
(13:20):
On the other hand, there are managementteams that don't want the board to
get fully into a subject because, asI said, they may have other reasons.
Maybe they're goodreasons, maybe they're not.
And so one of the things we didtalk about before, another important
factor in boards, is the roleof the chair in helping to set
(13:40):
the tone for the board culture.
Talk a little bit about the role thatthe board chair can play and the impact
he or she can have on board culture.
Joe, you and I have been Celtics fans,as you know, I'm not sure about Raza.
I'm sure he's a Celtics fan also.
I almost see the role of the board chairas a coach as well, and they have a
(14:05):
team and the team is the board, and itis critical for them to make sure that
the team is working well as a team andthe culture of the team is important.
I think people often try tofix the culture bottoms up.
I personally think the culture has tobe addressed top down and the role of
the CEO and the chair in defining theculture of a board is absolutely critical.
(14:27):
You should be able to raise the questions.
You should be able to ask the tough ones.
You should be able to say, "Look,I don't agree with the decision."
You should have the encouragement.
The board members should get the feedback.
One should be always asking boardmembers so the board members
are going to come at the time.
We should be always asking them in anindependent way what do they think.
(14:49):
This could be during the boardmeeting or after the board meetings.
This culture that we are all on thesame team and the chair together with
the CEO are the captains of the team,because I do think the CEO plays an
equally critical role out here, butthe role of the chair in terms of the
dialogue, in terms of the discussion,in terms of the agenda, in terms of
(15:10):
ensuring that all the board membersare being heard, listening to them.
We talk about inclusion.
Inclusion in my mind is just notrace or gender or color, whatever.
Inclusion in my mind is listening topeople, hearing them out, getting their
point of view, because otherwise why havea board if you're not listening to them,
and I think in my mind, the chair playssuch a critical role in any of that.
(15:35):
I love the analogy to the coach of aNBA basketball team, and in thinking
that through, one of the things thatI think is a great practice is, the
analogy I'll make is, that when yougo into executive session, it's kind
of like a timeout, and coaches needto take a time out now and then.
I know Joe Mazzulla is taking more thisyear than last year and it seems to
(15:58):
be working well, but having the teamtogether and with the chair coaching
them or guiding them and thinkingabout what are we doing and what are we
talking about and what are the issueswe may have with management, that's kind
of an interesting way to look at it.
Thanks for raising that.
Joe, I have to add one more thing.
In my mind, feedback is gift.
(16:20):
The chair should proactively beasking for feedback, what's working
well and what is not working well.
I've seen some board chairs do itextremely well, and I've seen the
board discussions get better over time.
And some don't ask.
In my mind, having the mix, having thecourage to ask the board members as to,
"Hey, give me feedback on what i'm doingwell versus not doing well," because none
(16:40):
of us get trained to be a board chair Webarely get trained to be a board member.
And even if you are trained,every board is different,
like every team is different.
So, the way you coach one team isgoing to be really different from team
to team or from board to board, soeven if you've served as chair, new
company, new subject, new management,new board, maybe a different approach.
(17:04):
I think that is a really great comment.
It strikes me as being fundamental to thevery important role that a chair plays.
If you're going to give feedback tothe CEO, yeah, you should be giving
feedback to the chair too, because theCEO and the chair both have to function
at a high level for all this to work.
One of the things we've all talked about,the three of us, is about the importance
(17:27):
of diversity of perspective on the board.
That's what makes a board strong.
And one of the things you have said whenwe've talked is, yeah, I mean, of course,
it means gender, of course it meansracial, but it's so much more than that.
If you could just expand on how youlook at diversity of perspective
or diversity generally on a boardand how that might be viewed.
(17:52):
Yeah, so as I said, of course, it'sgender, of course, it's race, of course,
it's like color, so we should neverever move away from that perspective.
But that said, we're notstressing enough about age.
Often people are servingall kinds of demographics.
People in the 30s may not resonate withthe people in the 40s and 50s and so on,
and one needs to keep that in mind also.
(18:13):
Age is an important part that we arenot explicitly talking about enough.
Skills, what skills do they bring?
I go back to our favoriteNBA coaching analogy.
You would not pick a team thatdid not have different skills,
and what skills they bring andhow they complement each other.
I think having the skills and thecapabilities becomes very, very key in
(18:35):
my mind, and we'll talk about technologysoon and having the right skills out
there becomes critical in my mind.
But the most important thing inmy mind is a learning ability.
A board member should be willing tolearn and be a sponge, be a great
listener, be able to go in andunderstand the management's perspective.
(18:56):
If needed, dig in deeper.
Be willing to understand the market.
Be willing to go all in andthe learning capability.
The diversity of that becomes criticalbecause at times, as all of us sit on
the board, we think we know it all and wehave done this for so many years, but in
my mind, we have not learned enough yetand we should be learning all the time.
(19:16):
So.
To me, that is a critical, critical skill.
I would just urge people to think aboutdiversity in a holistic way and to
think about the complete team and thecomplete mix of things that we want.
Well, two other things I want to askyou about before we get into a focus on
AI, which I know is top of mind for manyof us, but certainly for you, is the
(19:38):
board's role in identification of risk.
I think, again, when we talked earlier,we talked a lot about, sure, the audit
committee, a lot of times, that'swhere identification kind of resides.
But the audit committee isfocused on finances and it's
focused on what happened, notwhat is going to happen so much.
(19:59):
What are your thoughts about how aboard can be best prepared or best in
a position to identify major risks inthe future in terms of the strategy
of the company or the position of thecompany or the brand of the company?
I think risk is where mostboards should earn their living.
(20:19):
I believe in offense and defense,and of course, we need to think
offense, but I've seen nobody win achampionship just based on offense.
We can only win a championship ifyou can do both extremely well.
Yeah.
In terms of defense, look,it is not the obvious stuff.
In my mind, board members donot earn the keep or their time
commitment just by doing the obvious.
(20:41):
They need to think around the corner.
They need to think ahead.
They need to think aboutwhat could go wrong.
Defense means, in this case,thinking about what could go wrong.
And of course we have an auditcommittee and people do all the work.
I think that to me is table stakes.
That's a must do and everybody should do.
But thinking ahead on the risk, forexample, due to political risk a few
(21:03):
years ago, some of the risks thatwe have right now did not exist.
A few years from now, the risks thatare likely going to come up will likely
not exist, so being on top of those.
If you look at cybersecurityrisk, it's a major, major risk.
It's a huge risk forall of us at this stage.
And in my mind, I'm notsure if it's preventable.
I have to say that.
I hope it's preventable.
I'm not sure if it really is.
(21:25):
If you would assume that,I'll be prepared for it.
If there was a cyberattack, what do we do?
If you look at the market risk, I thinkthis is the single biggest one that I
do not think people think enough about,what could go wrong with our market?
Who are the new entrants?
Who are the attackers?
Are they gaining market share?
(21:46):
How could they enter our space,and how do we think about that?
To me, risk is holistic and oneneeds to be fully on top of that.
But I think beyond that, one alsoneeds a framework and a process and
a systematic approach to assess risk.
I've seen some great managementteams who put that into place and
it goes up to the board also, butbecause it forces you to think.
(22:09):
If you're having a good risk discussion,if your head does not hurt by the end
of the discussion, there's a problem.
Because it is just not theidentification of risk, what is the
abatement plan, who is going to workon that, how do we address that?
Again, going back to the learningpoint, being like curious about all
kinds of topics and being aware ofwhat could go wrong, so risk is a
(22:33):
huge hot button for me all the time.
And as I said, you can't wina championship without great
defence and defense to ascertainrisk for a company and a board.
What are your thoughts about havinga separate risk committee, separate
from the audit committee on a board?
I'm not a big fan of creating toomany committees, but the risk one,
I would prioritize above anythingelse, because this team should be
(22:54):
thinking about what could go wrong,not what is obvious because what is
obvious hopefully is being addressed.
What could go wrong is much tougher.
We've heard some guests say, "Well, isn'trisk really a full board responsibility
that should be a board discussion?"
And kind of my reaction to that is sureeverything's a board discussion but who
(23:15):
are the people that are kind of chargedwith thinking and really focusing on the
risk aspect because you don't really havetime to do it at every board meeting.
So, if there's not a group kind offully involved and responsible for
risk, I think it's very easy to missstuff and all you have to do is miss
one really important item in thefuture, a market risk, an investment
(23:39):
risk, a failure to take, and that willhave a huge impact on the company.
As you can see, I'm biased towardshaving such a committee, and I would
also say it's important to change thecompositions of this team over time.
Of course, you need some boardparticipation, but then as a risk evolve
over time, you should have differentpeople thinking about who should be
(24:01):
a member of the risk committee andwhat perspectives they can bring.
I think I will go back to mydiversity point, how do you
get diverse points of view.
It's a very different profile.
By the way, as I've worked with manyscience-oriented teams, the best
way to assess risk is not with theleadership team, it is to go two or three
levels down and sit in the cafeteriaand ask people what could go wrong.
(24:25):
And some of these peopleare very, very open.
If you were to put them in a spotand say, what could go wrong, you
get the best insights because theyare on the front lines living it.
That is a really interesting perspective.
I agree.
Obviously, management has to becomfortable with you talking to people
three levels down, but if you want togather information, again, a broader
perspective, because senior managementis focused on what they're focused on.
(24:50):
They may not see some of thethings coming that some other folks
in the organization might see.
Joe, I think one of the best practices,which I implemented when I was a
chair of the University of MinnesotaChemical Engineering & Materials
Science Board, we had the students comein without the faculty in the room.
Those were the best insights, and we toldthem, "Look, anything you say stays here."
(25:16):
Maybe we're not sure who said what,but for the advisory board, that
was incredibly helpful in thinkingthrough what other things are
said that need to be addressed.
Great approach.
I really loved that.
Now, one of the risk that is obviouslyemerging and we talk a lot about it is AI.
(25:38):
You mentioned that it's the singlemost disruptive technology we've
encountered in our lifetime.
How do you see boardsgetting prepared for that?
I would say first, AI isthe flavor of the month.
Some would say, flavor of the year.
I would say it has been a flavor foryears, because we're getting excited
about GenAI right now over the last, butAI has been around for a long time and
(26:01):
it is making a big difference forever.
But more broadly, Raza,I would say technology.
Technology is evolving all the time,and how do we stay on top of that?
But the reason why I get excited about AIand other technology areas is, look, the
GDP of the world right now is roughly giveor take around 80 to 90 trillion dollars.
Our McKinsey Global Institute colleagues,some incredible work they've done that
(26:24):
shows the math of the impact of AI,between 17 to 26 trillion dollars.
Wow.
That's a pretty massive number.
If I look at the pharmaceutical area,which I work, and you're talking about
100 billion dollars worth of impactfrom AI, these are massive numbers.
Given that macro impact and the macroscale, in my mind, and the way it's
(26:48):
going to touch everybody, it's criticalfor a board to be fully on top.
Not every member may be on top, but a goodchunk of members should be fully on top.
There are two reasons for it.
I, again, go back to offense and defense.
Look, if you're not playing defenseout here, you will likely get
impacted in a significant way becausesomeone is going to enter your
(27:09):
field and disrupt you completely.
There's a huge option for offenseas to how do you play offense
given the numbers we're talkingabout, they are mind blowing.
How do you play offense out here?
But the most important thing is tofigure out what is fluff and what is not.
Raza, you've been doing this, likeliving with your fund, to be able
to filter out what is good versusnot, and what are the markers we're
(27:31):
going to have that help us decide?
Because it is not ultimatelywhat a company invests in AI in
terms of the dollars, but it's apeople, it's a time commitment.
So, having all that judgmentand that filtering, and
it's changing by the minute.
think it's great the way you put it.
I think what it implies is that thosesubstantial portion of the board that
(27:54):
needs to be ready, needs to understandtechnology in general and the flavor
of the month, in particular, andthen tie it to the opportunities and
risks for the enterprise and how toview that and how to make decisions
around various aspects of AI from biasto hallucinations to other things.
(28:14):
One thing that I wanted to get yourtake on is for at least publicly-traded
companies, as an example, that thereis a requirement for having a financial
experts on the audit committee.
Would it mix?
And taking another example, the DCROInstitute provides qualified risk
(28:36):
director certifications and their visionis that at some point, having a risk
expert should be required on variousparts of the board, would you be in
favor of having a required or mandatedtechnology or AI experts on the board?
(28:58):
I am having a pause becauseI'm not a big fan of mandating
anything, but should one do it?
Maybe yes, as long as you don'tcreate a lot of bureaucracy around
that, go back to the role of thechair and the CEO as a co-captain.
It's a responsibility that they havethe right people on these teams.
(29:18):
It's just not about the certification,Raza, as you know, I mean, the way
things are moving, if you are stuck intwo weeks of old, I mean, you missed it.
Things are moving so rapidly, so thisis why I go back to the capability
I talked about, they should betechnically competent, but willing to
learn a lot, stay on top of the news,understand the implications of that.
(29:38):
Going back to your hallucinationspoint, I mean, yeah, these systems
are hallucinating right now.
Five years from now, willthat have improved or not?
And I hope so.
I'm no AI geek out here.
I am trying to barely keep up,but I hope that some of these
things will improve over time.
One has to assume that.
(30:00):
But I think the second order impactof what comes from AI as it becomes
real, it becomes huge in my mind.
I'm not a big fan of certification, buteverybody should be willing to learn
and a good chunk should be AI competent.
Yeah, I think in some ways, short ofmandating or even a guideline, that it
is a very important column in the skillsmatrix that the board needs to recruit
(30:24):
for, and you should have it there.
And then on top of that, as you mentionedearlier, that a substantial portion of the
board needs to kind of constantly developtheir understanding and knowledge of this.
It's just moving very fast.
My impression, and as we talked aboutearlier, I think if you're just trying
to train people, yes, you can train them,that gets them to level one in my mind and
(30:47):
the journey we are going on is one to 10.
So.
Going from zero to one is critical.
I have no doubt about that, butthe journey from one to 10 will be
self-driven, so they need to drive it.
The board members need to drivethe journey from one to 10 because,
Joe, I mean, even this was the baseaverage which we are going, something
that is two weeks old is too old.
(31:09):
That's quite a challenge, actually, toexpect that board members on every board,
for public and private companies, willhave enough self-motivation to continue
to learn at a very quick pace about abroad and fast changing subject matter.
(31:30):
It's certainly a good idea, butto expect that board members
will do it on every board withoutsome kind of guideline, or even a
mandate, I think may be unrealistic.
Not every board member needs to doit, but there should be a reasonable
chunk of board members who arewilling to stay in with the times.
Now, I've wondered what should bethe mix of this, but I go back to
(31:55):
look at the last 20 years and theimpact of technology in our lives.
People talk about high tech top companies,mega seven and so on, but look at
the disruption that they've created.
Look at the cashflow that they have.
Look at the impact that they have.
I would rather be in the business any day,and that requires a lot more competence.
Should people becompetent as they come in?
(32:18):
Yes.
Some would be nice, but the mostimportant thing is, are they willing to
learn, because if you just take lightpace of every two weeks to the next
five years and 10 years, if you're notkeeping pace, how far behind you are?
I think that's where the so calledwinners and losers will be made.
People who catch up to AI, and asan organization, as management, as
(32:41):
board are able to learn and turnthat into an opportunity would
be the winners and successors.
Let's just talk a minute about the GreaterBoston Chamber of Commerce Board for
which you served as chair for three years.
During your term and the subsequentterms of Paul, my brother,
(33:01):
Micho Spring and John Fish.
The board has undergone areally significant change
in terms of its composition.
It'd be great if you couldtalk a little bit about that.
So, I think in my mind, this is a greatexample of the CEO and the multiple
board chairs working as a team.
This is all going with John Fish whowas the chair before me, and then we had
(33:27):
Paul Ayoub, your dear brother, who dida remarkable job, and then Micho, and
then Ronald Hanley, then Karen Kaplan,who was the chair before John Fish.
This always has been a theme.
This always was a topic, and Ithink we talked about diversity and
we said, "Look, why can't we fixit on the Chamber of Commerce and
be a role model to the community?"
That was the theme out here.
(33:49):
And this was a consistent thing.
Yvonne Garcia joined the boardas a nominating and gov chair.
She together with Paul havedone a remarkable job in
continuing that momentum.
But it also goes back to theCEO, Jim Rooney has been a
consistent force on this.
His whole team is diverse, plus he hasbeen the one who has been, we of course
push him, the one person who has ensuredthat among the different chairs, every
(34:12):
chair has had the same team, but Jimhas been constant throughout this also.
I think again, it goes back tomy point about collaboration
and about partnerships.
You don't move anything in aday or two, or an year or two.
You move these needles in 5-10 years,and the role that Paul Ayoub, your dear
brother played was extremely critical.
I could go around each of the chairsand all of them have played a huge role.
(34:35):
Ron O'Hanley is a chair right now,and he's doing a tremendous job.
So, things get moved over time.
In my mind, this is a great example.
We are more than 50% women now on theboard, and I think in terms of people
of color, we are approaching 40%.
If I'm not right, it'srough roughly there.
Does it meet all the otherdiversity criteria I talked about
in terms of technology, in termsof age, in terms of capabilities?
(35:00):
Not yet.
So, I think that work is still to be done.
I also showed an example of Museumof Science, where there are a lot
of people who are experts in biotechand life sciences, and there, as I
chaired the committee for nom andgov there we are trying to ensure
that we have different industries.
I think we go back to the firstdiscussion we had, diversity is
(35:21):
multifaceted and one needs tothink about this in a holistic way.
I'm very proud of the work the Chamberof Commerce has done and everybody else
I think lauds that also, but hopefully wewill keep working on that for a long time.
Thank you.
I think the mission to achieve really afull diversity on the chamber board over
(35:41):
time has set an incredibly strong example.
As you said, it serves as a rolemodel for the business community.
And there's nothing better to try tosend a message than actually doing it
rather than telling people to do it.
Kudos to you and the chairs beforeand after you that all worked together
with Jim Rooney to make that happen.
(36:03):
Nav, it's been greatspeaking with you today.
Thank you so much for joining us.
You're welcome.
It was a pleasure and thank you bothfor what you're doing and I look
forward to listening to this podcast.
And thank you all for listening to OnBoards with our special guest, Nav Singh.
Please visit our websiteat OnBoardsPodcast.com.
(36:26):
That's OnBoardsPodcast.com.
We'd love to hear your comments,suggestions, and feedback.
And if you're not already a subscriber,please be sure to subscribe at Apple
Podcasts, Spotify, or wherever youget your podcasts, and remember
to leave us a five-star review.
Please stay safe and take careof yourselves, your families, and
your communities as best you can.
(36:48):
We hope you'll tune in forthe next episode of On Boards.
Thanks.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!