High Performance Boards - Didier Cossin

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Yours,

       Thorsten

      ***

      Joanne cast her mind back to a chilly afternoon in March 1992. She had been in her office thinking about how to improve a distribution partnership for WeCare, the multinational consumer goods company she worked for at the time, when her phone rang.

      It was her old friend from business school, Burt Goodman, who was now a mover and shaker at GCD, a major consulting firm. Goodman invited Joanne to join him for the Henry Street Settlement dinner in New York City. ‘I'm just not cut out for big gala events, Burt’, she had protested.

      ‘Oh come on, it will be good for you’, Goodman said. ‘Sometimes even an MBA and over 20 years of experience in a major multinational can't match the magic of one lucky dinner conversation’. So Joanne decided to go.

      At the dinner, she was seated next to Jordan Wise, the CEO of Amsterdam-based Virtuous Ventures, a major international conglomerate. Their conversation touched upon Joanne's family and career journey to date, and Wise asked her advice on the pros and cons of joint ventures in different emerging markets. Joanne shared her key learnings about each market, as well as the main strategic and industrial dimensions that needed to be considered.

      ‘But doesn't it depend on your partners in the end?’ Wise wanted to know. Joanne described the different partnerships that WeCare had developed locally, depending on the distribution channels in place (or not) in different markets.

      Two days later, Wise called her with a proposal that took her by surprise. ‘How would you like to be on the Virtuous board, Joanne?’ he asked her. She had always aspired to board service at some point in her career – but she was only 44, surely far too young to be a director.

      Her first meeting with Virtuous Ventures' Chairman Gerald Grossheim was over lunch at the famous Charlie Trotter's restaurant in Chicago's Lincoln Park. Over their first course, Grossheim explained how the company's 11-member board worked, how often it met (four times a year), and his relationship with Jordan Wise (almost daily contact, yet with a certain necessary distance). He also discussed other members of the top team.

      Grossheim asked Joanne about the kinds of challenges she had encountered when negotiating with local distributors during international expansions, and about how she had developed an understanding of customers in different markets. Joanne happily described her extensive travels in India, Bangladesh, Thailand, China, and Egypt to talk to WeCare's local sales teams. She had accompanied them on visits, discussing their frustrations and where they saw opportunities, in order to get a sense of the reality on the ground.

       Joanne had some questions of her own. While Grossheim sipped his coffee, she asked him:

       Who was on the Virtuous board? How dedicated were they? What did each bring – and what was his or her unique contribution?

       How did board directors ensure they had the information they needed to make decisions? What were the board briefing papers like? Were there other sources of information?

       What kind of processes and structures did the board have in place to ensure it was doing things efficiently and professionally? How did it ensure directors have a sufficient board-level view of risk? (Here, Joanne recalled the WeCare board's inability to understand how their growth strategy had exposed her own company to key vulnerabilities.)

       What was the Virtuous boardroom culture like? What kind of dynamics were at play? How would the other directors view the contribution of a much younger woman?

      Together, they formulated questions for Grossheim to ask Virtuous Ventures' President of Marketing, including what additional information he could ask for that would be helpful in assessing the company's current global marketing plan.

      Three months later, after a series of discussions and a formal panel interview by the nominations committee, Joanne was appointed as an independent director and began eight years of board service with Virtuous.

      ***

      The following Tuesday, Joanne walked into Mario's and kissed her nephew Thorsten on the cheek. It had been 18 months since she had last seen him. While Joanne sipped her iced tea, Thorsten told her how his favourite professor from business school, Sam Cragnolino, was on the board of Kloetzel and was approaching retirement.

      As a member of the nominations committee, Cragnolino had seen the board's needs analysis, which had identified a gap in the area of finance – and investment in particular. The head of the committee had developed a skills and competency matrix, which specified that the candidate should also be young (between 30 and 40), and had then issued an invitation to executive search firms. He also asked the other board members if they had any candidates to nominate. Sam had recommended Thorsten.

      James Caspar, Kloetzel's chair, had also screened the candidates proposed by the search firms, and invited Thorsten for a panel interview. The young man's expertise in securing and structuring deals with a series of major clients had attracted Caspar's attention as being something missing from the board's existing skillset – and something they very much needed. Thorsten had made the shortlist and passed the due diligence process, and then met the full board. He had been impressed by the ambition of its members to contribute to transforming Kloetzel.

      ‘I really like what they're doing’, Thorsten said to Joanne. ‘James seems active and engaged, yet not overbearing. Everyone I talked to seems serious about really building something’. Joanne smiled at his enthusiasm.

       ‘That's great, Thorsten’, she said. ‘Board service is one of the most rewarding experiences any professional can have during their career, and I think you stand to gain a lot. But tell me’, Joanne said, putting down her fork and looking intently at the young man, ‘what is it about your experience that leads you to think you could make a meaningful contribution to Kloetzel?’

       ‘I know how companies are thinking about the costs and benefits of major transactions’, Thorsten said. ‘I could help Kloetzel think about whom they could approach and with what messaging to expand in major markets, which is part of their strategy’.

      Joanne asked him about Kloetzel's current performance, and whether there were discrepancies across major markets. Thorsten shook his head. He didn't know the details. He dug in his pocket for a pen to make a note.

       She pointed out the difference between board service and an executive director role. ‘You're not there to tell management how to do their job’, she said. ‘You're there to challenge them on the strategy to make sure it's a good one, and to help them to get what they need to be able to do it, and then to check that they actually do it’.

       Then Joanne asked Thorsten the following questions:

       People: Who were Kloetzel's current board members? What kind of

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