2018 Directors to Watch Stalwarts of Private Company Governance

2018 Directors to Watch Stalwarts of Private Company Governance

There’s a fine balance in the boardroom between building trust with the management team and making sure directors aren’t a rubberstamp for the CEO. That balance can be even trickier when it comes to private company boards.

Successful directors realize this, and in order to find governance equilibrium they focus on what’s in the best interest of the company for the long-term, especially as they try to navigate constant change.

Indeed, significant industry change is number one among the top five trends private board members see impacting their organizations, according to a recent study from the National Association of Corporate Directors. Change is followed by the competition for talent, business model disruption, cybersecurity threats and the changing global economic conditions.

To manage all the challenges, independent and diverse voices in the boardroom are key, and they can also help organizations manage leadership failures.

A major issue for private companies, as mirrored at publicly traded firms, is tone from the top and the board’s role in shaping that. High-profile missteps at a host of companies, including Uber and Intel can be mitigated if firms have directors who demand CEO accountability.

The directors highlighted in this article see their responsibilities as board members running the gamut, from providing independence and oversight to making sure they have an eye on what’s best for their companies in the long term. They bring to the table a broad array of expertise and experience that’s invaluable to companies looking to keep ahead of business turbulence. While their work, as one director puts it, isn’t always sexy, it’s a duty they take very seriously.

MARION McGOVERN

Director, CPP, Inc., The Front Porch

Marion McGovern brings her expertise as a successful entrepreneur in human capital to her roles as an independent director. She is the chair of CPP–The Myers-Briggs Company. She is also a board member of The Front Porch, a continuing care retirement community with 10 communities in three states. Recently, she was named to the advisory board of Life Sci Hub, a digital talent platform for scientists in drug development.

An expert in the dynamics of the independent talent market, she was the founder of M Squared Consulting, an early gig-economy firm, and Collabrus, an employment compliance firm. She sold both to an international conglomerate in 2005, and remained a board member through 2014.

Marion has written two books, including Thriving in the Gig Economy, published in 2017. Her main engagement is consulting with the Alliance of CEOs, where she facilitates peer exchange for CEOs.

Empowering divergent ideas: Healthy dialogue doesn’t just happen in the boardroom. CPP once evaluated the psychological type of the board. A fellow director, an industrial psychologist, mapped our Myers-Briggs Type Instrument (MBTI) outputs to create an aggregate profile. This highlighted a board blind spot — too many of us shared two preferences. As such, we tended to agree with each other and not explore alternate ideas. To address this, we appointed a board member to serve as a devil’s advocate and question discussions in our strategy sessions. This helped us build a muscle to deliberately embrace diverse views in all of our board discussions.

BARBARA FORD

Advisory Board, Gold Eagle, LLC; Chair, Communities in Schools of Chicago

Barbara Ford is a partner at Phoenix Strategic Advisors LLC, a marketing strategy consultancy that helps businesses accelerate profitable growth through insight-driven understanding of consumers/customers, brands and category dynamics.

Barbara has over 30 years of marketing, strategy and advertising experience positioning and building brands and optimizing organizational effectiveness. With experience leading marketing services for S.C. Johnson & Son, as vice president at Global Advertising Resources for Kraft Foods, and a senior leader at global ad agency DDB, Barbara brings depth and breadth to addressing business challenges.

Barbara serves on the advisory board of Gold Eagle Company, a leader in the auto aftermarket industry, and just assumed the role of chair for Communities in Schools of Chicago, a leading student dropout prevention organization.

Barbara has an MBA from Loyola University of Chicago, and a B.A. from Drake University in Des Moines, Iowa, where she served on the board of trustees for nine years.

The value of an objective, external perspective: Throughout my career, the one thing I have heard consistently from companies of all sizes is the value of an informed, objective, external perspective. While that perspective needs to be attuned to the nuances, dynamics and realities of the company, an independent voice can serve as a constructive challenge to the status quo (or even myopia), encouraging a higher level of strategic dialogue to address business challenges. My work with private companies both large and small, B2C and B2B, has reinforced the merit of diverse perspectives, approaches and experiences.

WILLIAM A. HUDSON

Lead Director, Sasser Family Holdings; Director, H.D. Hudson Manufacturing Company, Environmental Systems Design

Bill Hudson is an experienced board leader who got an interesting start. At University of Wisconsin, Bill took a class focused on Roberts Rules of Order. This created a lifelong passion for governance.

During the early part of Bill’s professional career, he volunteered on committees, boards and ultimately became chairman of five industry associations. Bill’s first business board was the advisory board of Hein Electric Supply and later he was appointed to the board of Symmons Manufacturing. Internationally, Bill has served as a director for an Asian manufacturer and a French wholesale distributor.

Today, Bill is a director in his family’s 113-year-old fourth-generation business, H.D. Hudson Manufacturing Company, and ESD, Environmental System Design. Additionally, Bill serves as the lead director of a multi-generational transportation asset financial services company, Sasser Family Holdings, which recently was named the best private company board in its class by this magazine.

Board leadership makes the difference: Board leadership is a trend that has rapidly entered the private company realm. High performance boards must have best in class directors, selected for their skills and expertise as it relates to the forward strategy of the company. Consistently assessed and refreshed, top directors are focused on providing management with the strategic guidance, leadership and referrals that can help propel the company forward, faster. Find the right CEO, and then work with that individual in an environment of trust and transparency to provide long-term value and sustainable returns to the shareholders.

MICHAEL MONTELONGO

Director, Larry H. Miller Group of Companies, Herbalife Nutrition Ltd, Exostar LLC, Aerospace Corporation, Leadership Roundtable

Having completed careers as a soldier, presidential appointee and corporate executive, Michael Montelongo brings significant experience as a tri-sector leader — fluent in business, government, and civil society – to achieve organizational excellence and success.

An NACD Board Leadership Fellow, Michael’s board service includes the Larry H. Miller Group of Companies, Herbalife Nutrition Ltd, Exostar LLC, Aerospace Corporation and Leadership Roundtable. He is president and CEO of GRC Advisory Services, LLC, a private board governance, risk management and compliance matters firm and was most recently chief administrative officer and a senior vice president for Sodexo, Inc.

A public policy expert, Congressional Fellow, and lifetime member of the Council on Foreign Relations, Michael is a former Bush White House appointee serving as CFO and the 19th assistant secretary for financial management of the U.S. Air Force — the first Hispanic-American to hold that office. Michael earned his B.S. from West Point and MBA from Harvard Business School.

The right people and the right skills, at the right time doing the right things: A high-performing board has the right hardware and software. “Hardware” includes sound board protocols; “software” is about having the right talent and boardroom environment — servant leadership practitioners who foster a culture where everyone is treated, respected, dignified and served as they themselves would like to be. The first element — hardware — is necessary but insufficient; the second — software — is the “secret sauce.”

LINDA I. LIN

Director, First Bank of Highland Park

Linda Lin is an experienced management consultant and technology expert who serves as an independent director for the First Bank of Highland Park. She oversees the bank's IT steering committee, focusing on cybersecurity and technology strategy, and serves on the bank’s audit, ERM, and insurance committees.

Linda concentrates on helping C-suite executives improve margins and reduce risk by integrating technology, process improvement, and human capital. She works closely with leadership teams to overcome the complex challenges that arise from M&A integration and other disruptive events. Her clients have included McKinsey, Deloitte, Hewlett Packard, UPS, Delta Dental and several private equity-owned businesses.

Linda earned her MBA from the Kellogg School of Management and her B.A. from Harvard University. She is on the board of several local nonprofits and was named the 2005 New Hampshire SBA’s Women in Business Champion of the Year.

Scandals are failures of leadership: Volkswagen. Wells Fargo. Equifax. Front-page corporate scandals aren’t failures of compliance, they’re failures of leadership. Developing a culture of high integrity and high performance starts at the top, with a board that seeks out and develops exceptional leaders who focus on balancing the needs of shareholders, employees and customers. This is a critical but delicate balance, especially for companies in fiercely competitive industries facing intense technology displacement, compliance risk or external market pressures. The most effective boards foster an environment where employees are rewarded for making decisions for the long-term benefit of the company, even if they involve difficult trade-offs in the immediate term.

EDDIE LOU

Director, Albert.io, ChowBus, National Billing Partners, TheMomProject, Paro.io

Eddie Lou is the executive chairman and a co-founder of Shiftgig, a leading gig economy platform. Lou is a board director in five venture-backed companies: Albert.io, ChowBus, National Billing Partners, TheMomProject, and Paro.io. Lou enjoys working closely with founders and management to scale their business, raise capital, and attract talent.

Formerly a general partner with OCA Ventures, Lou also co-founded and is a board director of OneGoal, a 501(c)3 nonprofit that improves college persistence. OneGoal has grown to over 150 staff members and a $15 million annual budget with 12,000 students across six cities.

Eddie received his MBA and his B.S. in mechanical engineering from Washington University. He was recognized as one of Crain’s “40 Under 40” and “Chicago Business Tech 50,” a Chicago United “Business Leader of Color,” a Forbes “Up And Comer,” and an EY Entrepreneur of the Year Midwest finalist.

When to inspire and when to listen: Great independent directors know when to inspire for greater performance and when to listen with empathy. Building a company is a challenging journey. The best independent director listens well and builds trust with the CEO, creates a safe outlet for a CEO to get input, and can have conversations that are not biased from an investor director viewpoint. This transparent communication is important in guiding the company’s strategic direction and challenging management to think big while balancing near-term business priorities, financial performance and short-term results.

MARGARET PEDERSON

Director, Xamax Industries, Noble Sensors

Margaret Pederson is vice chair and CEO of Xamax Industries which provides a critical material layer of technical papers, films, nonwovens and laminates used in manufacturing industrial and consumer products from truck liner panels to electrical power cables to facial wipes.

Margaret has expertise in business development, marketing, strategy and innovation, focusing on transforming organizations to meet 21st opportunities and challenges. Her board assignments include Xamax Industries, Noble Sensors, National Association of Corporate Directors (president, Connecticut chapter), Viad, TextureMedia, WomenCorporateDirectors advisory board and numerous global trade organizations plus NFPs.

She runs Amirexx, a boutique consulting group that focuses on creating value for middle market and private companies. Margaret’s prior work includes domestic and international operating and business development experience in stand-alone plus large multidivisional companies, living in London, Paris, Tokyo and Manila. Her past roles include division president at PRIMEDIA (NYSE) and senior operating roles at Reed Elsevier.

The board’s role during crisis or transition: The board plays a pivotal role in times of crisis or transition by bringing credibility and stability. Thorough meeting preparation identifies challenges and opportunities and forces decisions. Decisions are made quickly based on strategy and ROI. Experienced directors objectively evaluate factors easily overlooked or minimized. Expertise replaces historical decision patterns and balances family dynamics; a new normal is more readily accepted as the next stage of development unfolds. All stakeholders are heard; internal and external players are reassured that stability continues.

CINDY L. RUNGER

Director, UniBank

Cindy L. Runger is an experienced director, having served on bio-tech, education and bank boards. She sits on UniBank’s board as an independent director and member of the audit, loan, and governance committees.

As a lawyer, finance executive and investor, she brings her passion for governance and risk management to her boards. She has served in leadership positions in politics, investment firms and private banks like J.P. Morgan where she managed individual and institutional portfolios and relationships.

Runger is a pioneer member of Athena Alliance, where she advises female executives aspiring to become directors. She’s also a dynamic and regular guest speaker on topics of leadership and women on boards.

 Additionally, she serves on Gonzaga University’s board of regents as vice chair of the development committee and is president of Seattle Rotary.

Runger holds a J.D. from Gonzaga University Law School and B.A. from Gonzaga University.

Tone at the top elevates risk management approach: Who says risk management isn’t sexy? When aligned with strategic business objectives, it can be extremely impactful and long-lasting on a company’s reputation and shareholder value. To make risk management a critical governance priority, it begins with the board setting the tone at the top — embracing this responsibility and actively promoting a culture that values risk mitigation in all business situations. It also includes engaging independent directors with multi-sector expertise. These directors can offer valuable perspectives on issues like accountability, transparency, and sound executive compensation.

CATE BRADY

Director, BAI (Bulk Ag Innovation)

Cate Brady has over 20 years of boardroom experience, bringing digital innovation to many industries including financial, insurance and healthcare services. As a technology entrepreneur, she took her first company to an initial public offering and sold the second to a corporate buyer. Cate is on the board of BAI, a manufacturing company growing through acquisitions. She is also the COO of Neurocern, a venture-backed data analytics and risk-modeling company focused on insurance.

She previously worked as a consultant doing C-suite-level assignments such as a corporate reorganization or acquisitions for privately held companies. Her board and operational experience enable her to understand the unique needs of privately owned and family-owned businesses. A strong believer in integrity and accountability, she brings intelligence, creativity and a collaborative approach to the boardroom.

Cate has a certificate from the Women Director Program of Northwestern University, an M.S. in finance, and a B.S. in economics.

The duty of loyalty is not to the CEO: Directors owe a duty of loyalty to the shareholders and the company they serve, as opposed to complete loyalty only to the CEO or the family founders of the company. This is the core of my governance beliefs and yet it is often the most ignored of the rules and best practices of a director. Organizations may have great accounting and financial practices and procedures, even have a compensation committee made up of independent directors. But if the independent directors are really just a rubber stamp, the corporation will suffer in the long run. It is the fiduciary duty of a director to act honestly, in good faith and in the company's best interests.

SANDRA WILSON

Director, Midtronics, United Generations, North American Stamping Group, SS White Dental

Sandra Wilson is CEO of Value Wise Partners, a consulting firm enabling businesses to achieve peak performance through business simplification, operational/service excellence, winning growth strategies and leadership/board development. She drives value in the boardroom with 30 diverse years of Fortune 200 and private business experience in C-suite, finance, operations, sales, marketing and innovation.

Sandra has over 12 years of independent director experience and serves on four corporate boards; Midtronics, an automotive battery management provider that is recognized as one of Chicago’s most innovative companies; United Generations, a global family holding company owning businesses offering highly-engineered, mission-critical equipment and services; North American Stamping Group, one of the largest tier II automotive stampers/assemblers in North America; and SS White Dental, a manufacturer of dental equipment. She is also a committee member for the Private Directors Association.

Sandra has a B.A. from Northwestern University (Phi Beta Kappa) and an MBA from the University of Chicago.

A key attribute of a trusting partnership: The best directors are said to have “noses in, fingers out.” Skillful directors are inquisitively curious, in a thought-provoking way, without being managerially directive about the day-to-day business. In fact, the best questions are the ones that stimulate executives to return to their teams and rethink a topic in a different way in order to find a better solution. Directors with diverse and vast experience can cause others to think deeply while still having executives who are empowered to lead and make decisions. This is the trusting partnership that creates real value in the boardroom.

PERNILLE SPIERS-LOPEZ

Director, Meijer Corporation, ECCO USA

Pernille Spiers-Lopez serves on the private boards of Meijer Corporation and ECCO USA. Pernille is a trustee and interim board chair for Save the Children International, trustee at Save the Children US, and board chair for Homeboy Industries.

Pernille was with IKEA for 21 years. During her tenure as president of IKEA North America (2001-2009), Pernille lead the fastest expansion ever within IKEA. Most recently Pernille was the global HR manager for the IKEA Group and its 135,000 employees. She has dedicated most of her career to the advancement of women in leadership both inside and outside IKEA.

 Pernille published her first book in Denmark in 2012 about personal leadership and taking responsibility for our own life and success, If Your Life Was a Kitchen. The English version is titled Design Your Life.

Maximizing the luxury of long-term thinking: Financial independence and the luxury of long-term thinking are competitive advantages for a privately owned company. Under the right leadership, as a private company, you can stay focused on delivering to both short- and long-term goals even in the toughest of times. You can stay the course when you don’t have shareholders breathing down your neck every quarter. Staying committed to the company vision, mission, values and core business creates long-term trust among customers, suppliers, partners and employees. As a board we need to hold management accountable and responsible for delivering on that.

SHEENA S. IYENGAR

Director, Asian University for Women, Ashinaga

Sheena S. Iyengar is the S.T. Lee Professor at Columbia University. Her first book, The Art of Choosing, received the Financial Times and Goldman Sachs Business Book of the Year award, was the basis for one of the most-watched video series on NHK, Japan’s public television station, and ranked third on Amazon’s Best Business & Investing Books of 2010.

In 2002, Iyengar received the Presidential Early Career Award for Social Scientists. In 2011, she was voted one of Thinkers50’s “Most Influential Business Thinkers.” And, in 2012, Poets & Quants ranked her among the “World's Best B-School Professors.”

Iyengar has spoken to over 120 audiences that range from Fortune 500 companies and nonprofits to government bodies and medical institutions around the world.

Iyengar sits on the board of a startup that uses new tools in artificial intelligence and machine learning to optimize the hiring decision making process. She also sits on the board of two not-for-profits; Asian University for Women and Ashinaga.

The importance of injecting an innovation DNA: Private company boards with a growth mindset will perceive the evolution and competition of our technologically advanced market as an opportunity to innovate and stay competitive. However, private companies, and even public companies, often lack either the resources or the culture to make innovation part of their DNA. To solve for this, boards should incorporate a diverse set of professionals from all backgrounds, some of whom must understand how to leverage big data to make informed choices. The efficiency of exposing operational trends has the power to drastically strengthen a company’s human capital, which is increasingly important for corporate governance.