The Better Boards Podcast Series Dr Sabine Dembkowski

Diversity and inclusion are not evenly distributed throughout an organisation, and the view at the board level may not correspond with reality further down. This creates missed opportunities and prevents companies from unlocking the true potential of their talent and their organisations. Often, firms can increase productivity by doing more to be truly inclusive.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Director of Better Boards, discusses increasing productivity through inclusion with Belton Flournoy, Managing Director of the Technology Consulting practice at Protiviti.

"When I was young, I looked up and didn't see many people like me”
Belton is passionate about inclusion for two reasons. First, he feels that when you don’t see anyone like yourself, you fear society won’t allow you in certain circles. Second, he continues to see people limiting which parts of their identity they show or hide, and this holds people back from expressing their true potential.

“We don't just need to focus on diversity initiatives and how they make people feel. We need to link them to the increased productivity”
Belton sees an incredible opportunity to translate the existing dialogues about diversity into more meaningful conversations linked to productivity outcomes and business results.

“If you haven't driven the true inclusion values through that middle layer, it won't permeate your organisation, and you might think your organisation is much more inclusion-oriented than it really is…”
Many boards have done serious work on inclusion, building it into the mission, governance, and operations. Yet when you drop into the middle management layer, there’s a sharp drop-off in belief, behaviour, and execution.

“The goal is to create research that helps organisations drive inclusion through evidence-based research”
Belton sees many organisations dealing with inclusion and diversity by conducting surveys and reporting their interpretation of the survey results. This approach lacks rigour. This is part of why he devotes so much time to research partnerships, to help create strictly measured and robust studies that can drive change with hard evidence about what’s happening and what works.

“What you need to do is realise your voice is valid from day one”
Belton rejects a fixed mindset and focuses on cultivating a growth mindset. Secondly, he cultivates an internal locus of control. Rather than assigning control of his life to others or believing that an externally controlled system is responsible for his life outcomes, he frames situations in terms of what he can control and take action on.

The three top takeaways from our conversation for effective boards are:
1.      Create a personal board. As a senior leader, it is hard to get good feedback. So, identify three to six people to talk to about your career in a professional context between one and four times a year. This will transform how you get feedback on challenging issues and help you have a priceless sounding board.
2.     Realise the voice in your head is just a voice. You don’t have to listen to it. You can ignore or challenge it, which is especially useful for overcoming negative internal narratives.
3.     Contribute to the productivity research of the future. Complete the ongoing survey on generational productivity from the London School of Economics and Protiviti. You can complete it here:  https://www.protiviti.com/us-en/survey/lse-generations-survey   

Boards are complex structures, and it can be overwhelming for a first-time CEO to navigate them successfully. In this episode, we dive into the experiences of a first-time CEO, discussing the challenges she encountered and the strategies she used to handle the intricacies of board dynamics. 
In this episode, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, speaks with Daphne Mavroudi-Chocholi about her experience working on a board for the first time.  Daphne, the Managing Director of RNIB Enterprises, brings a wealth of experience to the table but is, for the first time, a CEO. 
“What has surprised me the most, coming from the start-up world, is the governance”
Daphne’s previous experience was in the start-up world. There is an established background in that world, and investors invest in the person and the idea. Now, she is the Managing Director operating within a highly regulated environment. She finds it constantly necessary to consider the right balance between governance, agility, nimbleness, and the ability to make decisions.
“There are two places I really see value coming through. One is honesty, and the other is the idea of working with a board rather than sitting on a board”
Daphne feels very lucky in her board relationships. She sees two areas where the board provides and creates particular value. First, life as a CEO can be a lonely existence. With your board, on the other hand, there’s the opportunity for honest, no-holds-barred conversations, and that space for transparency creates immense value. Secondly, by viewing the board as a partnership relationship, you gain the benefit of a critical friend.  
“The most challenging part of working with a board is striking that balance between managing the board, engaging with board members, ensuring alignment, and then actually doing the day-to-day job”
To Daphne, one can be pulled into board work and move away from the business. Or, one can go so deeply into the business that one forgets to update the board. 
“What is the shining city on the hill we’re all marching toward?”
Along with an ally in the Chair, Daphne finds storytelling extremely helpful.  Storytelling helps create narrative fluency in the common culture and goals that drive the business. It can bring everyone together on the same page, build clarity on why things are being done, and drive everyone forward in the same direction. 
“In God we trust; all others bring data”
A second thing immensely helpful to Daphne is an insistence on data. It builds credibility and helps move conversations from opinions and emotions to facts. 
“You might as well be honest and transparent at the beginning.”
The final element for Daphne is transparency. She mentions it often because it matters on multiple levels. It builds trust. It helps us understand each other and the business. Above all, transparency helps extract maximum value from the board because when the members understand the story, data, and balance, they can understand how to bring their full range of skills and abilities forward, exponentially magnifying their impact. 
The three top takeaways for effective boards from our conversation are:
1.      It is imperative to create narrative fluency with your board. Clearly describe the proverbial “Shining City on a Hill” as the whole organisation and the Board marching toward it.
2.     Build diversity around the Board table, especially diversity of thought and working style, to challenge the status quo in a good way.
3.     Truth will come out – it is best to be honest and transparent.

When companies face increasing uncertainty, they need to lean in and embolden management to do what is right for the business's long-term health. Nowhere is this more pertinent than on the topic of sustainability. 
In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses how board members can help make a difference with Andrew Hobbs from EY's Center for Board Matters across Europe, the Middle East, India, and Africa (EMEIA).

"There's a significant strategic data and information gap at the board level"
One of the big discoveries from the recent EY survey of 200 C-suite or Non-Executive Directors was the data gap. Less than 25% of the total have been identified as leaders on the sustainability and governance front. Leaders were working from a much stronger set of metrics that helped them establish links between ESG decisions and other value-creating objectives.

"Metrics are key for good decision-making"
Effective decision-making on capital allocations for ESG and quantifying returns on investments is impossible without good metrics. Both leaders and followers reported challenges around getting good metrics that allowed them to capture the financial implications of their decisions. It's an area of opportunity.

"It isn't about creating a board full of sustainability experts. It's about encouraging boards, or giving boards enough training to ask the right questions."
Andrew says many boards are seeking members with sustainability skills, but that may not be the right solution to the problem. Instead, boards need training to ask better questions of themselves and management – questions that challenge short-term thinking, probe for a deeper analysis of financial impacts, and encompass more of a holistic, long-term view of what sustainability choices are going to do. 
"We're not saying that boards need to do the job of management"
Boards need to be ready to challenge and question decisions to find meaningful solutions. If a target has been set, due to regulations or internal goals, but things are behind, how can boards create accountability and pave the way for a real change in business practices? How can boards create deeper conversations about costs, benefits, and resource allocations?

"All that gathering of data and setting up the systems and controls to report is giving boards and companies insights they didn't previously have"
There is a huge slew of regulations out there, which some companies view as a nuisance. However, Andrew believes that looking at this regulation as a compliance exercise is the wrong mindset and approach. Instead, boards need to look at these and say, "How can we turn this to our advantage?"

"Businesses need to walk the tightrope between growth and governance"
Andrew feels businesses need a balanced approach to governance and growth. One example is the use of artificial intelligence (AI) to advance or monitor sustainability efforts. Boards need to look at the business opportunities it presents and the environmental impacts surrounding the use of AI.

The three top takeaways for effective boards are:
1.      Boards are the long-term stewards of an organisation. Boards need to be mindful of what's happening now and deal with that but also need to encourage a focus on the future.
2.     Boards need to ask better questions to get better answers and not shy away from the challenges presented.
3.     Boards play a key role in linking reporting to a stronger long-term value narrative for investors. 

What are the key differences between the U.S. and the U.K.  in their approaches to corporate governance?   How do these differences impact an independent/Non-Executive Director in their duties?
In this podcast, with Susan Skerritt, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses corporate governance practices in the U.S. and U.K..  Susan was the CEO of Deutsche Bank Trust Company, Deutsche’s US commercial bank.  Since 2018, she has served on the board of financial services organisations in the US and UK. 
"I've been lucky to find boards that want my experience, perspective, and where I think I can add value"
To Susan, the most important thing when looking at board opportunities is whether you see yourself bringing value to the organisation. She pursues global board opportunities because she's always operated in and enjoyed the global business world.
Susan notes that while boards in the U.S. and the U.K. have their differences, there are also many similarities. Both operate on the Anglo-U.S. model, which differs from the German, Continental, and Japanese models. 
"The most important differences are the philosophical differences"
For Susan, the most important difference is philosophical.   U.K. corporate governance is principles-based. There is a corporate governance code that's updated regularly, and it's applicable to companies with a premium listing on the London Stock Exchange. The code operates on a "comply or explain" basis, and that really recognises that one approach may not be appropriate for all companies. The U.S. approach is more prescriptive. There is no corporate governance code per se. Rather, publicly listed companies are subject to four areas of law and regulation: state corporate law, federal securities law, Stock Exchange listing rules, and federal and state laws related to specific industries, such as financial services. 
The second philosophical difference relates to whom the board is ultimately responsible. In the U.K., the duty of Directors is to shareholders and stakeholders. In the U.S., shareholders' interests tend to be the primary concern. The Business Roundtable and Association of Chief Executive Officers recommended in 2019 that the U.S. shift toward stakeholder focus, but that's still evolving. 
"Beside philosophical differences, there are structural differences"
Susan sees several structural differences between U.S. and U.K. boards. For example, in the U.K., the Chair and CEO are more likely to be separate, with fewer than 10% of FTSE companies having a combined role. In the U.S., over 50% of S&P 500 companies have a combined CEO and Chair role. Susan finds this can lead to conflicts of interest, and prefers the U.K. model.
"There are also differences that impact the Directors themselves"
There are also key differences beyond operational structures that impact Directors themselves. These anchor on board refreshment, compensation structures, and education for board members.
The three top takeaways for effective boards from our conversation are:
1.      If you have global experience that you want to deploy in your board work, consider a board in another jurisdiction. Your experience is precious if the company operates globally and most of its existing board members are from one country.
2.     Corporate governance continues to evolve in every country. By having experience in multiple jurisdictions, you bring different perspectives to the table. 
3.     Even if you don't join a board in another jurisdiction, keep updated about how corporate governance is evolving outside your country. There are best practices you observe in other jurisdictions that could be deployed no matter where you serve.

Climate change has transitioned from a distant environmental concern to a pressing business issue. The rhetoric between business and climate activists has hardened. Friends of the Earth in the Netherlands have sued Shell and are now in the process of suing ING. What should boards do? 
In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses the thinking behind the move to sue ING Bank and learnings for boards with Donald Pols. Donald is the Director of Friends of the Earth in the Netherlands. 
 “We can and will manage to address dangerous climate change if all relevant actors contribute, including the financial sector.”
Donald is bringing the climate fight to boardrooms. He cites the reality of the regulatory gap as a key factor- He explains that while governments sign agreements and individual countries make pledges, large multinationals often have no one person or entity truly holding them accountable. Often, the financial sector operates in this regulatory gap, which is why he is using a lawsuit against ING to make an example as ING is one of the largest financiers of fossil fuels in the world, which gives it a unique opportunity to shape climate change impacts.

“It's time to start acting on all these initiatives instead of only talking.”
The first step in a democratic society is always a dialogue and a conversation, but Donald notes that conversations have happening for decades with no real progress. So, taking things to court is an intentional escalation. Donald sees going to court as part of the democratic process, which allows parties with a difference of opinion to get a judgment on those opinions. It also creates a way to close the regulatory gap. 
“If there's only one message I can give to your listeners, it is that climate change is not an ESG issue. It's a material issue.”
Donald feels that for boards to truly take climate change seriously, they must stop treating it as a side issue. It is a material issue that is crucial for the financial continuity of a company. 
“What we notice in our engagement with companies on a C-level is that climate change knowledge is lacking in general.”
In Donald’s view, acting on climate change starts with leadership from the top. Boards must make climate change a company-wide priority. Ideally, this will result in climate change being a fixed issue on the board agenda, whose importance influences policies not just for the firm, but also for suppliers and clients.
“The boards of multinationals that I visit are concerned with achieving and measuring impact. However, the way we measure impact is fundamentally different.”
As Donald sees it, most boards measure shareholder value. Firms in the activism and non-profit space, measure stakeholder value. For them, it is less about how much money is made and more about what noticeable changes are achieved and what societal support is won.
The three top takeaways for effective boards from our conversation are:
1.      There's a need to act to prevent dangerous climate change, and this need has become a new societal norm applicable to all corporate and financial institutions.
2.     Climate change is a material issue with fiduciary implications. Not acting in accordance with this responsibility already has and will have legal implications in the future.
3.     On a more personal note, you're a CEO, but you're also a parent and a grandparent. You're a board member, but you're also responsible for life on Earth, especially for your family. The discussions you have and the decisions you make daily will have an impact on the future of our shared planet. There's no profit on a dead planet. Act accordingly.

The board is a powerful asset for tech start-ups. Yet, since the interaction takes place behind closed doors, there is a lot of uncertainty about how the CEO and director dynamics play out. How open is the communication between both sides? 
In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses tech start-up boards with Yael Benjamin,   Founder/CEO of research firm start-up Snapshot, and Tzahi (Zack) Weisfeld, Vice-President and General Manager of Intel Ignite, Intel's accelerator program. 
"One of the main conclusions of the research is the focus on communication, or we'll call it the lack of communication, and transparency between tech CEOs and their directors"
Yael research finds one of the biggest issues is communication. Some 61% of the CEOs say they're not fully transparent with their board. 
"The lack of transparency is leading to a situation where CEOs do not utilise the value of the board"
Yael's research finds the lack of transparency and trust leads to extra challenges and diminishes the value board members can bring.
"There's a difference between first-time founders and people trying to manage or work with a board for the first time versus the more experienced founders that have a better handle on the governance of their start-up"
Zack feels the experience is a large and underappreciated factor here, both on the side of CEOs and founders and also on the side of board members. 
"CEOs that are young and inexperienced need to get the right kind of mentorship"
Zack feels it is important for young and inexperienced CEOs and founders to find advisors who can be great sounding boards and resources for managing board situations. He feels consultants are not a good choice. 
"A great way to help first-time or younger founders is to have an independent board member"
As founders seek advisors, Yael's research shows that 60% of start-ups do not have an independent board member. 
"Investors overestimated the value they're providing versus what those CEOs said they're receiving"
As an additional consideration when looking at investors as board members, Yael's research finds there's a large imbalance in the perceptions of the value of advice and guidance. 
"The reality is that VC partners are often on too many boards" 
Considering Yael's data and his own experience, Zack feels an issue not often talked about is that VCs and investors are on too many boards. 
"When we talked about selecting your advisor, your mentor, you need to select a partner that's going to invest in you"
At times, the only thing a VC has to offer is their cash. This means start-ups need to look for someone else to serve in that mentoring or advising capacity very intentionally.
The top takeaways from our conversation are:
1.      Yael notes that a lack of transparency is going to prevent getting value from the board.
2.     Zack wants to remind everyone to choose your mentors, VCs, and board members as carefully as possible – with at least as much care as you would a co-founder or spouse.
3.     Zack would also like to remind CEOs and founders that they are in control of their companies, not the boards. While boards play advisory roles, the ultimate responsibility for managing the firm lies with the CEO.
4.    Finally, Zack notes when it comes to boards, mentors, and advisors, adopt a "help them help you" approach. The more friction you can take out of the process, the more likely you are to get the help you need from busy people.