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The New Director's chair

“The CEO Should Feel Like Their Role Is To Set Up Their Staff For Success.”​

October 19, 2020

Sue Desmond-Hellmann, the former CEO of the Bill and Melinda Gates Foundation who serves as a director at Pfizer, shared key lessons about board dynamics and leadership in this interview with me and my colleague, David Reimer, the CEO of Merryck & Co. Americas.

Reimer: You’ve been a director on various boards for two decades. What lessons have you learned that you would tell your younger self when she was just starting out?

Desmond-Hellmann: One thing I wish I knew with my first board assignment was to sit down with the CFO and the corporate counsel and make 100 percent certain that I knew how I was going to be asked to add value in the company and how I could work successfully with them.

You’re going to interact with the CEO, of course, but legal and finance are such important business partners for the board, and the way you get to learn about the company is through some great interactions with those two executives. That is something I underestimated.

Another important insight about board karma is knowing who has done their homework — who has a long tenure on the board, who knows the sector and the particular issue under discussion — and who is the opposite, and is just sharing an opinion. The challenge is to make sure you know the difference.

It starts with asking yourself, “How am I contributing?”

It’s okay if you don’t know a lot about a topic and want to share an opinion, but you shouldn’t register that opinion too aggressively. As a board member, you have to be able to really assess the wisdom of what’s being said and to make sure that there isn’t some tendency to either cut a discussion short or to push management without being thoughtful. As a board member, it’s important to remember that you’re not management. It starts with asking yourself, “How am I contributing?”

Bryant: What’s your advice to a first-time CEO on setting the right tone with the board?

Desmond-Hellmann: One thing that CEOs can do, and it’s such a sign of confidence and competency, is to make sure that the board gets to know their leadership team. The CEO should feel like their role is to set up their staff for success, like bringing in someone from business development to talk about an acquisition. The CEO shouldn’t feel like they have to be master of everything.

A big watch-out is when you feel like the staff has been told to spin something or not talk about something. That makes you worry that something’s being hidden from you or there’s something embarrassing. The best CEOs interact with their board in ways that show, if they’re struggling with something or they want advice, that they’re unafraid to seem vulnerable with the board. And the board has to be receptive to that and honor that vulnerability.

Reimer: This has been a remarkable year, to say the least. How does all the uncertainty affect how directors deal with management?

Desmond-Hellmann: Beyond practical questions about things like compensation and benefits, there are broader questions that are raised at a time like this. What does it mean to work for this company? How do we think about the relationship between this company and its staff? Directors need to remind everyone, including other directors, that if something’s extraordinary, you’ve got to be careful that it doesn’t become business as usual.

Remote working is one example. It inevitably raises all sorts of questions. Will everyone be able to work from home? If they’re able to work from home and the company is based in San Francisco, can people move to Montana? Will they get the same salary? And what if the company offered onsite haircuts and gyms and daycare? What do those benefits mean for the employees in Montana?

A good board reminds people about setting limits.

A big lesson I learned as a CEO is that if you want to test something, put a timeline on it and call it a test. Otherwise you start piling up the benefits for the staff and it can become a problem. A good board reminds people about setting limits and being really clear what it means to work for a company.

When we were growing up, my dad would always want us to stop going to school to get another graduate degree, and he would say, “When are you going to get a J-O-B?” Somehow spelling out the word carried more weight. A company may offer a lot of benefits, but it’s good to remind everybody that it’s still a J-O-B.

I worry that I’m a little bit old-fashioned about this. But for me, the essential thing that we owe people is to let them know as clearly as we can what we need from them — “We hired you to do X, and here’s what X looks like and let’s talk about how long that’s going to take, and here’s the training, the resources, and the assets you need to accomplish X.”

Bryant: Directors are increasingly aware of the fact that culture is part of their fiduciary responsibility, in part because there’s reputational risk around it. As a director, how do you get a fingertip feel for the culture?

Desmond-Hellmann: One way is by having a really good head of human resources on the leadership team. Employee surveys are helpful and do give you insights into what’s going on, especially if they’re regular surveys where you ask questions that give you some insights into culture. It’s important to have a head of human resources who is not afraid to point out where the company has challenges.

Reimer: How else can the chief human resources officer really add value to the board experience?

Desmond-Hellmann: The best CHROs I’ve worked with at a board level are very business-savvy. They really get to know the board, especially the comp committee, and they participate in and help with the CEO performance review. This is not a role for the faint of heart. It’s for somebody who’s really strong, confident and experienced. More and more, human resources is a function that, just like finance or legal, has a lot of content and needs a lot of experience for people to succeed. These are hard jobs.

Bryant: What are the X factors that separate the very best CEOs from others?

Desmond-Hellmann: I don’t think there’s anything more important than whether the leader gets things done and brings out the best in people. You don’t have a thousand things that you do when you’re in these jobs. You’re trying to hire people who are really good, and then allow them to do their best work. And the culture you put in place makes that possible.

Also, talk is cheap. What did they do in their last job? Did they execute? Was it successful? If I had three candidates who were all really great on paper, I’d want to know who executes and who’s a great leader of people.

Reimer: What were early influences in your life that really shaped who you are today?

Desmond-Hellmann: From a very young age, I was going to be a physician. My dad was a pharmacist, so I understood what that looked like and what it meant to be a doctor. But in my roles early on at companies like Bristol Myers Squibb and Genentech, there was a sense that I was able to make a difference and help more people.

It wasn’t just about helping one patient at a time, but many patients could benefit from the medicines I worked on. I was just thrilled by that, and that never changed. Months ago, Nigeria declared victory against polio. I was so happy, just thinking that I could be a part of that effort during my years leading the Bill and Melinda Gates Foundation.

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