Linda Findley, Former CEO, Board Director, Blue Apron; Ralph Lauren, Tierney Remick, Vice Chair and Co-leader, Board and CEO Services, Korn Ferry Moderator: Lila MacLellan, Senior Writer, Fortune; Co-chair, Fortune COO Summit
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00:00What are boards looking for right now, and especially from COOs?
00:05So it may be helpful if I can set sort of the context of what's happened in the boardroom.
00:10Both its data is more specific to public boardrooms, but it actually has an influence on private.
00:16So over the last eight years, there's been huge composition shifts.
00:21And in fact, consistently since 2020, 35 to 40 percent of public directors appointed are first-time directors.
00:29And in that construct, a high percentage of them are not CEOs or CFOs.
00:35So you have new directors sitting around a table, many of whom have not sat in a CEO chair,
00:40but are very expert at an area or a specific place in which they're bringing their insights to that boardroom.
00:47It's very strategic. They're around the table for very important reasons.
00:51But because you have this dynamic shift happening, it's critically important that the COO,
00:57in partnership with the CEO and the leadership team, really help guide the board
01:02in what some of the key strategic decisions are that are facing them.
01:06But to do it in a way that is both educational but leveraging that boardroom
01:11to be able to help answer questions around supply chain, policy, regulatory.
01:16Linda and I were talking yesterday about just this dynamic change.
01:20Yeah, I think it's incredibly important that you are looking at boards that have these areas of expertise.
01:26When I built the Blue Apron board, I brought on a CHRO because we had a lot of front-line employees
01:31and I needed that expertise. She also happened to be a lawyer before, so it was a perfect combination.
01:35I had a COO slash president who had marketing expertise but also understood how to bring the supply chain to customers.
01:43And I had CFOs, et cetera. But I built my board intentionally that way.
01:48The Ralph Lauren board is built the same way, where you have different areas of expertise globally.
01:53And that balance is really, really important. But there's another dynamic as well, which is the public-private.
01:59I've been a private company COO, a public company COO, and then eventually a public company CEO.
02:05The private company boards are much more hands-on, much more involved.
02:10They're usually investors. They are bringing more and more independent members on
02:14as they think about the future of the business, but they're going to be involved day-to-day.
02:19Whereas the public company board intentionally is set up to be a governance body
02:23and not involved in managing the business on a day-to-day basis.
02:27And they're supposed to let management lead but stay on top with oversight.
02:32That creates a very different dynamic of how you're going to interact with those two different boards.
02:37What is it? The hands-out, noses-in?
02:40Yes, exactly.
02:41And so actually, I'd love to talk about communication with the board.
02:45And I'd love to find out from the audience here.
02:47Not only can you please think about questions that you have for our experts.
02:51It's a great opportunity.
02:52But also, just a show of hands here.
02:55When you communicate with your board, do you speak through the CEO or do you speak directly to the board?
03:00So if you talk mostly to your board through the CEO, can you raise your hands?
03:05Okay, great.
03:06And if you have a direct connection to the board?
03:12Wow. Is that a change, Tierney?
03:15I actually think boards are seeking to understand the leadership team of an organization.
03:20Historically, they may have gone through the CEO.
03:23But it's so important now to understand the end-to-end of the business.
03:26So one of the things that we're observing is in those engagements with the senior leadership team,
03:32they're asking that you not just present the slides,
03:35but you come in with specific questions or areas to pursue or insights that you're looking for them.
03:40And that engagement has created an incredible dynamic that's really positive.
03:45So boards want to understand the leadership team for multiple reasons.
03:48You just heard in the last session, succession is on everybody's mind.
03:51So they're thinking two, three, four years out.
03:54Who are the individuals that are going to be around that table?
03:56Are there internal candidates for CEO?
03:58Do we want to better understand who they are?
04:00So that provides an opportunity.
04:02But also, just as you're going through shifts,
04:04a board wants to understand the team of the CEO and the CEO of the team and how they work together.
04:10But I think it's important to understand that as you think about that direct relationship,
04:14that doesn't mean free reign.
04:16So the worst thing that you can do is come into the boardroom or speak to board members
04:24and disagree and present politics into this entire situation.
04:30So not just the COO aligned with the CEO, but frankly, the CFO, the general counsel.
04:35Have your discussions and your sort of arguments or debates outside of the boardroom
04:42and bring a united front because everyone looks weaker if you don't necessarily come in at least with some alignment.
04:51That doesn't mean you can't come in with a slightly different perspective.
04:54But I think it's just really, really important to think that way.
04:56Great CEOs will encourage their COOs and the rest of their executive team to have a direct relationship.
05:03And so that direct relationship is extremely important.
05:06But you want to be seen as somebody who understands long-term vision and strategy,
05:11really focused on execution, but arm-in-arm with the rest of your team.
05:15That's great advice.
05:16And so what strategies would you suggest for building those relationships?
05:20Is it like going out for dinner?
05:23What sort of happens outside the boardroom?
05:26You've been a CEO.
05:27I think most of this has to be led through the direction of the CEO and the board chair or the lead independent.
05:33And there are very high-functioning boards that have a regular cadence of spending time with management,
05:40either on a social basis before the board meeting itself.
05:44They may go to a site where a C-suite leader is based to explore a new innovation, new technology,
05:51sort of work through a challenge or an issue.
05:54So the board and the CEO are working very conscientiously about building those opportunities to actually understand the human,
06:01not just the leader and the area that they are overseeing.
06:05But I'd be curious how you did it because you were very successful with Blue Apron.
06:08Yeah, and I think it's an interesting dynamic because I know it sounds strange,
06:13but that board dinner the night before the board meeting is incredibly important
06:19because that is a great opportunity for the COO who usually is invited along with the CFO to that dinner
06:26to build that relationship and have a little bit more of a casual interaction.
06:32But I would actually say overall, again, working with the CEO and saying,
06:36okay, let's have a regular sort of structured way for the COO to be involved with the board is a little bit better
06:44because if you think about it from a board member perspective,
06:47they could have seven or eight of these types of dinners if it's always a dinner.
06:51And I will say, I mean, I love food.
06:53You know that I was Blue Apron.
06:55But it's really hard to talk and eat at the same time, it turns out.
06:59So you just wind up in a little bit more of a difficult situation
07:02than just having a casual conversation and saying, okay, let's build this relationship.
07:07But your CEO can structure that time to be most respectful of the board member
07:12but also most respectful of you to let you have the right interaction on strategic issues.
07:19And that should be part of your development plan.
07:22You know, the previous panel talked a lot about strengths and weaknesses.
07:25I think that's incredibly important.
07:27It's also important to say not everything is perfect.
07:32While everyone should be arm and arm, if you are always just presenting,
07:37as they call it the dog and pony show, there's always the positive,
07:40this is everything that's going really well, aren't we great?
07:43You lose credibility.
07:45So making sure that you're balancing where there's challenges,
07:48where there's opportunities and things that need to be done in those conversations is critical to that.
07:54But the CEO should be assigning out and saying,
07:57here's when you're going to meet with these different people
07:59and making sure that you get the exposure you need.
08:01In a private company, it might be slightly different
08:03because oftentimes the board members are there for very specific purposes.
08:07They may be working hand-in-hand with the COO, for example,
08:10for leading the transformation of a business,
08:13or if they're thinking about investment in technology and how that's going to work.
08:17So in those situations, they may be very hand-on-hand,
08:21working together to solve a problem.
08:23Okay, great. And speaking about development,
08:25are there specific skills that you could suggest to a COO to go and pick up
08:30or to learn more about maybe AI or cybersecurity, that kind of thing,
08:34where boards are going to be pressing harder for answers?
08:38So when I was listening to the previous panel a little bit,
08:41I think what most boards really want to understand from a COO,
08:44and there are different types of COOs, so I respect that,
08:47is do you understand the end-to-end of the business?
08:49If you're in the C-suite, do you actually understand the pull?
08:52And could you understand the priority choices that need to be made
08:55and the trade-offs that need to be made?
08:57Because the CEO role is so different today than it was previously.
09:01They're so focused on the external stakeholder management
09:04and the external affairs that they need somebody in that C-suite chair
09:09and on that C-suite team who's really thinking about what are the puts and pulls
09:13and how do we drive through the business for today,
09:15but at the same time constantly thinking about that dexterity of thinking
09:18short and long term is what we were talking about earlier.
09:22Followership is huge.
09:25A board will not elevate somebody into a CEO role or even to a COO role
09:29if they didn't believe they have followership from the company below.
09:33How do they demonstrate that if you're a COO?
09:36I mean, it really is about listening, first of all.
09:39It's also a lot about resilience.
09:41I mean, a big part of what you were talking about is resilience.
09:44The board is looking for adaptability from a COO, but frankly so is the team.
09:48You want somebody who doesn't get distracted and isn't,
09:52as they call it, the swoop and poop of everything.
09:55This is the latest thing that needs to happen,
09:57and we're going to focus over here, we're going to focus over here.
10:00You want a constant force that helps people understand
10:03what is the vision for this business
10:06and how are we progressing against it in every level of the business.
10:10They should understand how we're actually performing against it.
10:13And I think that followership is so important
10:17because you want someone who can develop the ability to bring people along
10:21even in times of difficulty,
10:24but attach them to the business, not to them personally.
10:28It isn't about me, me, me, me, me.
10:31That shouldn't be true at any level.
10:33It's about how do you actually bring people along with the entire business.
10:36Yes, they will be followers of that leader,
10:39but how do you attach them to the greater mission and vision?
10:42And I think this is something that a lot of people get confused about
10:46because everyone says we want to be long-term.
10:50We want to think about the long-term vision.
10:52Of course, we all want to think about the long-term vision.
10:54If you are in a public company or even if you're in a private company,
10:57you also have short-term goals.
10:59That doesn't mean you're thinking short-term.
11:02It means you're staying attached to that longer vision
11:05and you have milestones and progress against that goal.
11:08You can't come to a board and say,
11:10five years from now, we're going to be growing again.
11:12It's going to be great.
11:14Just trust me, come back to you in five years.
11:16What you're saying is, okay, here's how we're going to get to there
11:19in those two, three, five, whatever it is, vision years.
11:23Here's what's going to happen each quarter.
11:25What we can prove internally and externally,
11:28that is also a part of followership.
11:30People want to be a part of something that they understand
11:32and they see the progression.
11:34And don't just read the data, right?
11:36Don't just give them everything that you've already given them on paper.
11:39No, because most people can't translate that
11:41to the level at which they need to translate it to.
11:43There's a lot of fear. We've talked about it here.
11:45There's a lot of excitement and inspiration
11:47that technology is bringing to businesses.
11:49Equally so, there's a lot of fear.
11:51How do the senior leaders sort of break it down
11:54in pieces that everybody understands
11:56this is going to be a positive net
11:59for the organization, for the business, for the opportunity,
12:02and bring them along that way?
12:04And the market is moving so fast.
12:07Look at the last four years.
12:09Who would have predicted all of the dynamic changes and forces
12:12that have impacted business from COVID forward?
12:14None of them were on anybody's real scenario planning.
12:17Maybe the supply chain shortage was,
12:19but not in the way that it happened.
12:21So because of the movement and because of the pace,
12:24how do you slow down to bring people along to go faster
12:27is a critically important role that the COO
12:29and the senior leadership team are playing
12:31in partnership with the CEO.
12:33Great. Okay.
12:35Now let's see if the audience has any questions.
12:37Speaking of board questions,
12:40if you raise your hand,
12:43somebody will bring a microphone to you.
12:45I think one of the previous panel's comments was,
12:49you know, can you think about COOs stepping into boardrooms?
12:52And absolutely.
12:53I think as long as your CEO and your board are supportive of it,
12:56and the biggest question they'll ask may be time and role
12:59and what are the business issues today that are being faced.
13:02You know, from a board's perspective,
13:04they are absolutely looking for people who understand
13:06the end-to-end of the business.
13:07So that P&L mindset, which you heard about before,
13:09is critically important.
13:11If you aspire to be a CEO
13:13and they can grab you before that elevation happens,
13:15that can be also a really positive opportunity.
13:19There are many COOs that love being the partner to the CEO,
13:23and they bring incredible wisdom and depth
13:26and operational excellence,
13:28and that's also really powerful too.
13:30So I think the role of the COO has evolved
13:33over the last several years,
13:35and it can be an incredible anchor in an organization
13:38during periods of rapid change.
13:40I think that communication with your CEO about your goals
13:43and what you are looking to do is incredibly important.
13:46Similar to the fact that the CEO should be helping you
13:49have relationships with your board
13:51and helping to facilitate those,
13:53they also can help facilitate you getting on another board.
13:57But where I see a lot of COOs
13:59maybe make a little bit of a mistake in saying,
14:01I want to be on the board of the company
14:03that I am the COO of,
14:05that's actually not necessarily your best learning opportunity.
14:09Your best learning opportunity is to be on a board
14:11of a different company where that knowledge
14:14and that experience is different enough
14:17that you can actually navigate and learn from both.
14:21I am on the board of Ralph Lauren.
14:23I was also the CEO of several fast-growing
14:26pure technology companies,
14:28and so you have this balance of learnings from both
14:32that you can apply back and forth,
14:34and that's a very healthy balance,
14:36healthier than necessarily being on the board
14:38of the company you're actually already the COO of.
14:41And if you don't have that relationship with the CEO
14:43where you're going to ask about being on a board,
14:46how do you go about getting a board seat
14:48if we just switch gears a little bit?
14:51That's a really interesting question
14:53because I think from our standpoint,
14:54if we're working with a board
14:55and we want to talk to a candidate,
14:57the first question we're going to ask is,
14:58do you have the permission of your CEO?
15:00Okay.
15:01So if there's a dynamic tension in that relationship,
15:04that is one that is bigger than just,
15:06can I have a board seat?
15:08It's really, is your relationship in a place
15:10where it's going to be most beneficial
15:12to the organization and the strategic objectives?
15:16I think there's lots of board readiness education out there,
15:19but the biggest opportunity
15:21is just to talk to other board members.
15:24One of the things that we hear a lot
15:26from folks who have stepped into
15:28either a singular board role while they're walking in a company
15:32or they're building a board portfolio,
15:34is they don't understand the time commitment.
15:36They don't understand that it's really not four meetings a year
15:39if it's in a public setting.
15:41There's a lot more in between.
15:43It requires tremendous time and attention
15:46to be thoroughly aware of the issues
15:49and the topics that are going to be coming
15:51so that you come prepared.
15:53And when that isn't there,
15:55board members around the table are going to notice it.
15:58And so be really intentional
16:00about why you're seeking that board role.
16:02It may be for professional development.
16:04It may be something that your board, to your point,
16:06has said, hey, we see you as a CEO candidate.
16:08This will be an incredible gift for you
16:10as you think about the role of management and governance.
16:13It may be because you're strategically interested
16:15in certain business areas, and you think you can add value.
16:18But be really thoughtful about the why,
16:20because motivations matter.
16:22Yeah, and I will tell you, as a CEO,
16:24it's always scary when somebody comes to you and says,
16:26I want to take on two or three boards.
16:28Yeah.
16:30You have to know how much time you're going to be spending.
16:33And sometimes private boards actually take more time
16:35than public boards,
16:37just because you are doing a lot more hands-on coaching.
16:39So really start with one.
16:42Give your best energy to both your day job and that board.
16:46And it should be an easy conversation with your CEO
16:49if you can say to them, I want to take on a board
16:52because I think the knowledge I will gain from that board
16:54will better help me grow and develop this business,
16:59my full-time job,
17:01along with help you with working with the board as well.
17:05Most CEOs are very open to that and want that,
17:08as long as people are understanding
17:10the time commitment.
17:12You know, it's interesting.
17:14This morning we learned that AI agents
17:16probably wouldn't be good board members, right,
17:18because they're too agreeable.
17:20But I wonder, are COOs sort of uniquely set up
17:23to have that kind of productive conversation
17:26where there's still some friction when they're talking?
17:29I think constructive debate in a boardroom is encouraged.
17:32It allows for the right questions to be asked
17:35and the right discussions to be had.
17:37And that's where it's so critically important
17:39for the CEO and the board chair or the lead independent
17:42who are setting the agenda and the C-suite team supporting that
17:44is what are the questions we need to put on the table?
17:46What are the issues that we want to be wrestling through?
17:49Because you don't want a board to be surprised
17:51and you don't want a management team to be surprised
17:53by how a board reacts.
17:55So constructive debate is healthy.
17:57Right.
17:58Credibility is number one,
18:00and you don't get credibility by not having constructive debate.
18:03I think that is the way that you get to the CEO seat.
18:07That's the way you grow within your COO seat
18:09if you want to stay there.
18:11It's also the way that you get other boards.
18:13It has to be a critical discussion.
18:15And so one last piece of advice I'll ask for is
18:19if you are wondering how you're performing in front of the board,
18:23you're not quite sure,
18:25how do you know if you're doing a good job?
18:27I guess the CEO might tell you or the lead chair.
18:31The CEO, if you're an executive
18:34and you are presenting to the board,
18:37the CEO should tell you.
18:39But I will tell you most board evaluations include...
18:43So there's a board evaluation of the board,
18:45there's a board evaluation of the CEO,
18:47and when the board is evaluating the CEO,
18:50they are also going to talk about
18:53the impact of the rest of the executive team.
18:56But keep in mind, that will be part of the CEO's evaluation.
19:00So if the CEO has not done a good job developing their team
19:04to be a good presence in front of the board,
19:06that will be a reflection on the CEO.
19:08So the CEO should be giving you coaching and counseling all along.
19:13It may come directly from the board members as well,
19:15depending on the relationship you have with the board.
19:17But for the most part, it should come to the CEO.
19:19Okay, great.
19:20Well, thank you so much.
19:22I really appreciate that.
19:23Fantastic takeaways, I think, for everyone here.
19:26APPLAUSE