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In this episode (originally published Jan 2023), I bring you a curated selection of the best lessons, reflections, and secrets on how to build and manage an amazing board of directors. Several of our guests have sat or currently sit on the boards of some of the most incredible firms in the world and they had a lot to say about it. Whether you’re a CEO managing a board, an investor who sits on several, an independent board director, or you just want to learn, I hope you find it helpful.
You will hear from:
Martin Escobari, Co-President of General Atlantic
Renaud Laplanche, Co-Founder & CEO of Upgrade
Paulo Passoni, Head of Growth Investing at Valor
Jackie Reses, CEO of Lead Bank
Matt Harris, Partner at Bain Capital Ventures
Dave Nangle, Managing Partner of VEF
Collectively, they sit or have sat on the boards of Nubank, Alibaba, Lending Club, dLocal, XP, Upgrade, Incode, VTEX, Affirm, Quinto Andar, Billtrust, Justworks, Creditas, Finix, Acorns, Konfio, and many more.
Once you’re done listening, I’d love to hear what you think so feel free to leave a comment on LinkedIn, Twitter, or Substack.
Importance of Diversity in The Board Room
We hear from Martin Escobari, Co-President of General Atlantic and Renaud Laplanche, Co-Founder & CEO of Upgrade - who collectively have sat or sit on the boards of Upgrade, dLocal, XP, Upgrade, Incode, Lending Club, and many more.
“The best boards are diverse in background and skill. They have short meetings that are fun. Most of the work is done outside the board meeting. If you get those three components right, boards work. it is very rare that those three components exist.” - Martin Escobari
Martin and Renaud agree that diversity, including diversity of background, skill, gender, age, thought, and experience is essential in the composition of a board. Renaud also highlights that it’s key to have both retired and active executives on your board, to ensure different perspectives are covered, with the active executives probably being closer in age to the company's employees and customers. They also underscore the importance of having board meetings that are focused and productive and, Escobari, suggests board meetings should be a sounding board for the CEO, rather than a place for the CEO to receive a pat on the back.
"There's definitely a benefit in experience and wisdom, and having seen it all. You need some of that on your board, but I think you also need active executives who come from a different generation, and maybe a generation that's closer to your employees or your customers." - Renaud Laplanche
Most of the Work is Done Outside the Board Meeting
Next up, we hear from Paulo Passoni, former Head of Softbank Latin America and Jackie Reses, CEO of Lead Bank and former Head of Square Financial Services. Some of the boards they’ve sat on or currently participate in include Nubank, Alibaba, VTEX, Affirm, and Quinto Andar amongst others.
"Where I've seen the most growth, and the best use of a board is where founders are willing to listen to feedback and listen to different points of view. They might not act on it, but it goes into the filter of interesting ideas and insights that might change the way someone thinks." - Jackie Reses
In their experience, most of the work of a board is done outside of the actual board meeting and smart preparation can be crucial for a productive meeting. Moreover, Reses reminds company leaders that having a CEO that is open to learning and is receptive to feedback from the board is crucial. They might not take any specific action related to every suggestion, but they are willing to listen and consider new ideas. Finally, it’s crucial to have a small, focused board with no more than eight members, and the CFO of the company must prepare board members with the relevant data at least a week ahead of meetings.
“You have to call each board member a week before. Explain to them the results, gather thoughts, so that they force the board members to come prepared to the board meeting,” - Paulo Passoni
Build Your Board Early and Make Sure It Feels Like Any Other Great Team at the Company
Finally, we hear from Matt Harris, Partner at Bain Capital Ventures; Dave Nangle, CEO of VEF; and, once again, Paulo Passoni. Who’ve collectively sat or currently sit on the boards of Billtrust, Justworks, Creditas, Finix, Acorns, Konfio, and many more
“It really is one of the founder's primary jobs to make that team coherent, and to create a context in which people show up as the best version of themselves, which is to say, candid and forthright and not shy or compliant.” - Matt Harris
Harris argues that great boards are as functional as any other great team at the company, so you should always prioritize the caliber of board members over the size of the investment or valuation. And it’s the primary job of CEOs to create a board that acts as a cohesive team that encourages honesty and forthrightness. Passoni also encourages entrepreneurs to create a board as early as possible, even if it’s an informal one, and invite people with a range of experiences and skills that allow them to better understand the company's clients.
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Miguel Armaza is Co-Founder & General Partner of Gilgamesh Ventures, a seed-stage investment fund focused on fintech in the Americas. He also hosts and writes the Fintech Leaders podcast and newsletter.
Secrets to Managing Your Board of Directors - From Board Members of Nubank, Acorns, dLocal, Justworks, Upgrade, XP, Alibaba, & More Global Titans