Many Roads, One Role for Board Members: Business Advisor

CCBJ: In addition to your legal work and board work, you started WOMN LLC. What is that, and how did you get into it?

Marla Persky: I had been practicing law for about 30 years, primarily in-house. I was at Baxter International, where I had a variety of both legal and business roles, with my final role being acting general counsel and corporate secretary. Then I joined Boehringer Ingelheim Corporation, a privately owned pharmaceutical company, as general counsel for its North American businesses.

Several years ago, I started thinking about what made me happy when I was driving home from work, as opposed to what made me drive home with a scowl on my face, and I decided to focus on what made me happy. Two things that really jumped out at me were, number one, I really enjoyed the business. The law was okay, but it was really business that motivated me. And two, I really liked helping people get ahead in their careers. Throughout my legal career I was always an advocate for diversifying the legal profession. So I created a company, WOMN LLC, that’s dedicated to helping women succeed in the business of law. I work with women, both in law firms and in corporations, to help them develop a business discipline and view themselves as a product so that they take ownership of their career and guide themselves in the right way in order to reach the highest levels of the profession. So that’s what I’ve been doing over the past four and a half years.

You’ve certainly had experience building a successful career, and that includes being a member of a number of boards. What are you currently doing in that regard?

Right now I’m on the Leukemia & Lymphoma Society national board; the board of World Neighbors, which works with the poorest villages in the world to help them develop sustainable solutions for things like hunger, poverty and illness; and the board of Primary Stages, which is an off-Broadway theater company. Those are all not-for-profit boards. Currently, my for-profit boards are TEXT IQ, which is an artificial intelligence startup, and YGEIA, which is a healthcare informatics company, also a startup. On all the boards on which I serve, I generally sit on the governance and the audit committees because of my corporate secretarial experience and my risk/crisis management experience.

Can you talk more about governance in general and what that really looks like? I know that the notion of governance versus managing the company can be a slippery slope.

In the public company ­arena, it may not be as much of a slippery slope as it is in not-for-profit organizations. Governance really focuses on how the board operates in order to fulfill its role and its purpose. Governance does not oversee business activities of the company or the C-suite. The board of directors in a for-profit company represents the shareholders. In a not-for-profit, they are the ones who represent the interests of the targeted population that the nonprofit serves.

In either case, board members shouldn’t get involved in the machinations of how management runs the company. There is an adage for directors: Nose in and fingers out. You’re supposed to be looking over management’s shoulder and be a guide for management. You make sure that management is doing what needs to be done to protect the assets of the investors or to push forward the mission of the not-for-profit. Make sure the company is operating with realistic budgets, and approve those budgets. Oversee and approve the corporate strategies. Ensure that there is succession planning for the CEO. So it’s an advisory role. It’s not a roll-up-your-sleeves-and-get-your-hands-dirty type of role. You’re not supposed to be involved in the day-in, day-out activities of the organization unless it’s one of those not-for-profits where there isn’t staff and it’s really the directors who run the organization.

As you said, you were the corporate secretary at Baxter International. Can you talk a little about the corporate secretary’s role?

Absolutely. Let’s just focus on public companies. In a public company, the corporate secretary is generally an employee. Sometimes they are outside counsel who come in and serve in that role. But at least at large companies, they are an employee of the company and they exist in order to do a couple of things. First of all, they serve as a bridge between management and the board, vis-à-vis the scheduling of board meetings, the putting together of board books and presentations, and making sure that there is a recipe for smooth and open communications between management and the board. But the meat and potatoes of the communications, of course, comes from the CEO and the C-suite. The corporate secretary focuses on the form of the communication, and the C-suite focuses on the substance of the communication to the board.

Corporate secretaries are also responsible for protecting the corporate existence of the company, so if it’s a publicly traded company, they’re the ones who make sure that SEC and other regulatory filings are done appropriately and on time. And they put together processes for ensuring that the filings occur. Again, they’re not responsible for creating the substance of the filings, but they do know who to go to in order to get the substance to put into the filings – the 10-Ks, 10-Qs, 8-Ks and the like. And in companies that are private, corporate secretaries make sure that the mechanisms are in place to ensure that the company’s licenses to do business remain updated and so forth.

How do individuals, and maybe more specifically women, get onto boards?

Often, women I talk to want to become the CEO or they want to get onto boards. Or they’re trying to decide which they should be aspiring toward. I don’t think the two roles are mutually exclusive because most boards, both public and private, want people with CEO or CFO experience to be on the board. Again, if you’re a board member, you’re supposed to be there to help guide and advise management. If you have no idea about what their roles or responsibilities and challenges are, it’s hard to be an advisor and help guide them.

Basically, I think that if you want to run a business, you want to be a CEO. If you want to be an advisor to business without implementing the business plans, you’re a board member. Because it’s different roles and it’s different responsibilities. It’s hard to be a board member if you don’t have the business experience. If you’re going to pursue being a board member, you’ve got to have experience under your belt that’s going to make you attractive as a board member. Whereas to become a CEO, you either start your own company or you work your way up elsewhere to get the knowledge and the skills and the experience to do it.

For-profit board members get on boards because of their networks and who they know. Some board members are placed by search firms, but only about 20 percent of open board seats get filled by search firms. The rest, 80 percent, get filled by networking. Who do existing board members know? Who does the CEO know? So it’s really critical if you want to be on a board that you network with the right people, and people who are serving on boards.

Many people think that serving on a not-for-profit board is a great way to get on for-profit boards. I’m not so sure it is a great way, but it is a way because it forces you to meet and work with other people. For example, often hospital system boards are very large – they have 30 or 40 people who may be icons of industry. Their primary role is to raise funds for the hospital. If you get on one of those boards, you have to have a checkbook with you. But you are also going to meet icons of industry who themselves have boards, so that is a good networking opportunity. But just having had experience on a nonprofit board alone does not make you an attractive candidate for a public company or a private for-profit company board.

Generally, boards are looking for specific subsets of business experience. CEOs, CFOs, international, regulated industries, privacy and information security are all really hot right now. So they’re looking for board members who have specific subsets of business experience that the board member can bring to actually help the company.

There’s also the topic of lawyers getting on boards. It can be hard for lawyers to get on boards because we, as lawyers, have the reputation of being very risk-averse, and that’s not necessarily the type of person you want to have on a company board. But there are organizations, like DirectWomen, that are specifically designed to help female lawyers get on boards of directors. There are many things that lawyers are trained to do – listen, bridge-build, ask probing questions – that are critical skills for a board member.