Bianca Coulter, CEO of Coulter Partners, and several members of the Coulter Partners Board practice share their thoughts around the challenges of Board appointments. They offer insights into the search process, emphasize the need for engagement, motivation and commitment and share real life scenarios that demonstrate some of the typical hiring dilemmas facing Boards. With over 20 years of success in building Boards within Life Sciences, Bianca and her team can draw on a wealth of wisdom to bring to this roundtable discussion:
Acting as the Chair for an early stage Life Science company can at times be more a labour of love than a classical option for financial reward, or the civilised winding down of a successful career. The Chair can find him or herself being drawn into much more active engagement than might be expected, with a Board portfolio that demands a significant commitment and can require a carefully-judged risk strategy along the way.
Bianca: I speak with Chairs and CEO’s across the sector daily and as a global team we have around 60,000 conversations with leaders in Life Sciences every year. Chairs, Non-Executive Directors, CEOs and other Board members here often face challenges quite unlike those in other industries. The Chair of a Life Sciences company can find him or herself being drawn into much more active engagement than might be expected, with a Board portfolio that demands a significant commitment and can require a carefully-judged risk strategy along the way.
Engaging with internal and external challenges
Geoff: Managing Board meetings and the internal dynamics are just parts of the bigger picture. External challenges can be considerable too, and navigating these can clearly be critical to business success. Finance raising (grant, private and public), protecting shareholder interests and managing the Board are all critical, but being able to adapt quickly and appropriately to the dynamics of the financial markets is also vital. The credibility as a Chair can take a long time to build, but can be lost in an instant. Some external factors may be foreseen and economic or political volatility be prepared for, but major bad news for another company in the sector can turn a company’s listing or financing plans on their head overnight. Chairs in this sector need to be on top of events, as their public profile can be very visible. They need to work in tandem with their CEOs and play a proactive role in the markets. This is in no way simply a governance function. Depth of expertise and real engagement is expected.
Bringing the best out of the Board
Irene: We are so often asked to find NEDs with specialist expertise, scientific credentials, market experience, international reach and so forth. And it is vital the Chair can bring the best out of the whole Board. A great Chair needs to be strong, but not ego led. They must facilitate Board operations, appropriately opening and steering debate, listen and offer a sounding board to test ideas, all while keeping a firm hand on the tiller. We seek Chairs who are capable of really building and adding value, and who can also show a firm grasp of the numbers and dig into the details at times. A road show may suddenly crop up and demand a great deal more time than might normally be expected of a Non-Executive Board Director. Flexibility is a huge factor in enjoying and being successful in such roles.
CFO interaction may be critical
Geoff: Selection of the CFO and their interactions with the Board are also an important concern. In some circumstances the CFO may have a place on the board, but often the CFO may simply have to report to the board or attend some Board meetings as a guest. Reporting will have to be through the CEO to maintain the CEO’s role, but the Board needs to be satisfied that they are getting the full picture. A Chair who knows how to enable this, and NEDs who can run a rigorous audit committee process, can add real value in this respect.
Managing the dynamics of the search
Irene: The dynamics of the relationship between the Chair and the CEO is often a vital component of managing our search approach. Carefully defining the profile for a new Board member is a vital first step. We search for Non-Executive Directors with specialist expertise, able to lead the Board committees for audit and remuneration, and for Chairs (our most frequent type of Board search). In the ideal scenario, there is a Senior Independent Director who can oversee the appointment of the Chair, but on several occasions we have found that the expectation of the Board or company was that the CEO was best placed to articulate what was needed in terms of the gaps in capabilities on the Board.
Clare: This has been particularly challenging when a major part of the Chair’s brief has been to mentor, guide and develop the CEO. We have faced the dual challenge of needing to establish the likely rapport between the CEO and prospective Chairman, and having to ensure that the Senior Independent Director was satisfied that the prospective Chairman would also add enough challenge to drive and performance manage the CEO.
Examples of recent board searches illustrate some of the infinite variety of Life Science leadership challenges:
Right time, right place
Arnaldo: With our global connections and deep Life Science sector knowledge, we are quite often in the ideal position to be able to act swiftly and highly effectively when the opportunity arises. A recent need for an internationally experienced and high profile Non-Executive Director to provide gender balance for an immuno-oncology company was swiftly facilitated as we knew exactly the right candidate, and with the perfect scientific background and IPO expertise to see them on their way.
Bianca: Our success in finding highly effective Board members is founded on our strong industry network and a very capable and highly qualified diverse team across the globe. We do not underestimate what makes a really great Board member in Life Sciences.
Just don’t expect a quiet life. We don’t!