Board members can bring a wealth of experience and advice to their CEOs – and not just when the board convenes each quarter. The chemistry of this critical relationship requires careful attention, particularly when selecting and onboarding new directors, coaching the team and providing diverse insights. Tayloe Stansbury, Venture Partner at TCV, shares lessons and insights from his board memberships and two decades reporting to corporate boards as CTO at Intuit, CIO at VMware, and EVP at Ariba. Beth Knuppel, Principal in TCV’s Portfolio Operations, guides the conversation to the key moments and processes that board members and CEOs need to master so that their relationships – and the business – can thrive.

In this podcast, Beth and Tayloe address practical questions for anyone coming onto a board or running a company with board support, such as:

  • The most important criteria for joining a board
  • How to maintain diversity of opinion on the board while still providing the CEO with convergent advice
  • Why board members should meet with their CEO informally between board meetings
  • How to set efficient board meeting agendas that allow for in-depth discussion of pressing issues
  • Why board members should evaluate their own performance and not just the CEO’s

For this and more, settle back and click play.

TRANSCRIPT

Beth Knuppel: Welcome to Growth Journeys. This is a podcast series from TCV focused on lessons from the field from both operators and entrepreneurs in the TCV ecosystem. I’m Beth Knuppel. I’m an Operating Principal at TCV, where I lead our talent center of excellence within portfolio operations. Our podcast today is all about the CEO board partnership and lessons learned for effective governance. I’m joined today by Tayloe Stansbury. Tayloe is a Venture Partner at TCV, where he works with existing portfolio companies, and he’s also involved in diligence for potential investments. In addition, Tayloe serves on the board of directors at Coupa Software and BlueJeans. Welcome to Growth Journeys, Tayloe.

Tayloe Stansbury: Thank you very much. It’s great to be here.

Beth Knuppel: So, Tayloe, you had a long, successful corporate career before joining TCV as a venture partner. Most recently you were CTO at Intuit. Tell me a little bit about your background and how you got to this point.

Tayloe Stansbury: For the last decade, I was CTO at Intuit. I looked after all their technology operations — so engineering, data AI, IT, and information security. And before that, I worked at a number of other companies, including Ariba. I was EVP of product and operations there, which included customer support, product management, engineering, and operations. I worked also at VMware, Calico, Xerox, Sun, and Borland in a variety of different engineering and general management positions.

Beth Knuppel: So you are a technology veteran, for sure?

Tayloe Stansbury: I guess.

Beth Knuppel: In addition to those roles, I mentioned you also serve in some board of director roles. You were on the board of Shutterfly for three years. You continue to serve on the board at Coupa and at BlueJeans. What was it that attracted you to board service in the first place?

Tayloe Stansbury: I was a direct report to CEOs of public companies for some 20 years, which meant that most every quarter I was doing presentations to boards. And it started to intrigue me that maybe I could contribute at a different level. And that’s what led me to getting onto my first board.

Beth Knuppel: When you say at a different level, tell me more about what that means to you. What is it that a good board really adds to a company?

Tayloe Stansbury: Boards advise, right? Boards don’t manage. Management manages. And I think that distinction is really important. Boards bring a wealth of experience that is orthogonal to what some of the managers have and can advise them on new situations that arise and how to think about new problems.

Beth Knuppel: I think that a lot of people have in their mind this outdated stereotype of the board member who sort of jets in, goes to dinner, maybe makes a few pithy comments at the meeting the next day, and then you don’t hear from them again for another quarter. I should say, that is definitely not the model at TCV. Our boards are really engaged. But I’m curious, what would a management team expect, or what should they expect, in terms of engagement in between those quarterly board meetings? How do you work with the board in between those formal opportunities?

Tayloe Stansbury: For myself, I’d say, I generally meet with the CEO of each of the boards that I’m on once in between each board meeting — go out to dinner, to breakfast, or something like that — and just talk about whatever’s on their mind. And I usually adopt one or two, sometimes three members of the senior management team that I coach. And I usually meet with them once off-cycle between board meetings. And those meetings can be a lot of fun, high engagement.

Beth Knuppel: Got it. You know, a lot of our audience are founders who may not have ever worked with a board before. So you’re talking about this engagement in between. Who’s initiating that? Is that you, on the board? How should the CEO be reaching out?

Tayloe Stansbury: I think it’s best always if the CEO is making the introductions so you’re not invading their space and having meetings unbeknownst to the CEO. I’d give an example from a board I was on that was for a college. And the president asked me if I would lead the advancement committee, which means fundraising. And I said, “Hey, I’ll do anything for you, but I know nothing about fundraising.” And she said, “You’ll figure it out,” and turned around and then walked away. So she did actually introduce me to the head of fundraising and, we had a very fruitful relationship, where I would come down before each of the board meetings and go over his management challenges, his prioritization challenges, and how it is that he was going to present to the board, because while he was very experienced in fundraising and I was not, I knew something about presenting to boards and he didn’t. And so it would end up being a very fruitful relationship and we blew through all our targets and it was great.

Beth Knuppel: That’s great. One of the sayings that we have here at TCV is that the journey to the top is never a straight line, right? Every organization experiences setbacks and challenges. But I’m wondering, the CEO is typically looking to put their best foot forward with the board. How should a CEO balance that? How should they bring bad news or maybe challenging situations to the attention of their board?

Tayloe Stansbury: If all you’re doing is the Pollyanna version, nobody learns anything. I think what’s really best is approaching it with complete transparency and an attitude of seeking counsel, because that’s when you get the true value out of a board member who may have been through some of these things, or have cognated things before. So that’s hard to do. It means you’ve got to show your dirty laundry. But over time, you can build a relationship with a board where that’s okay, because they’ve had dirty laundry in managing the things that they did earlier in their lives as well. And they’re not going to be freaked out about it, and they’ll be able to give you much better advice which will enable you to perform better over time, with the transparency.

Beth Knuppel: It sounds like a key piece of that is just developing trust.

Tayloe Stansbury: Absolutely.

Beth Knuppel: How do you think about doing that when you’ve joined a new board and you’re establishing your own relationships with the other board members, with the CEO? How do you think about your entry into that board?

Tayloe Stansbury: Well, I think you’re hitting on a really important issue which is that the relationships are really important. And I think boards work best when there’s diversity of thought, everybody is respectful of each other’s opinions, but they’re also able to converge towards something which is a plan of action or a consistent set of advice for the management team. And I think the same thing is true with management. There has to be that trust of each other, the sense that different people are bringing something different to the party that is worth listening to and every now and then might be the key thing you need to know to manage through a tough situation. Mechanically, how that would work is going out to dinner with these people off-cycle from regular board meetings, getting to know them, and getting to build up that level of trust and respect for what it is that they’ve done.

Beth Knuppel: Right. I’m curious. As you work with a CEO, you want to build that trusted relationship, but at the end of the day, as a member of the board, part of your job is to evaluate the performance of the CEO.

Tayloe Stansbury: That’s right.

Beth Knuppel: How do you work through CEO evaluation?

Tayloe Stansbury: I think it’s best practice to have an annual evaluation of the CEO and actually even an annual evaluation of the other board members, where you think about: “What are the objectives that were set for the company, what are the objectives that the CEO may have set?” And everybody actually scores the CEO on that. You have a discussion as a board, and that gets presented to the CEO on an annual basis. And that discussion precedes setting the compensation for the CEO for the following year. I think that detachment where you can help and also provide some evaluation — hopefully which has got constructive ideas as to how the CEO can improve in areas where perhaps they need to grow.

Beth Knuppel: And you mentioned that you think it’s good hygiene for the board to engage in some self-reflection as well.

Tayloe Stansbury: Yes.

Beth Knuppel: How does that process work?

Tayloe Stansbury: Same way. Score each other, get together to have a couple-hour discussion about what came out in the survey. And if it’s a board that has mutual respect, those kinds of comments can end up helping bring the board closer together and help smooth out some rough spots.

Beth Knuppel: In the case of, maybe, a board that’s underperforming, what are some of the things that in the past you’ve encountered that help address an underperforming board?

Tayloe Stansbury: I see it as a spectrum – where at one end of the spectrum, you have a rubber-stamp board that’s not really providing any meaningful thought diversity to the problem, and the other end, where you have an acrimonious board which can’t agree on anything and they’re just fighting over stuff. And I think the sweet spot is somewhere in the middle, where everybody is thoughtful, they’re presenting diverse points of view, and they’re figuring out how to converge that into something that is constructive for the management team. And how do you get there? Again, I think it’s by spending time with each other and learning to appreciate what each other’s gifts are, what each other’s experiences are, what their scars are that they’ve managed to live through and learn things from. On a rare occasion, it may be best if some people move off the board if they just can’t get aligned with the rest of the team.

Beth Knuppel: Are there any common pitfalls that you see?

Tayloe Stansbury: In one case in particular, we did have a board that was pretty acrimonious and couldn’t get on the same page and it was very hard to get anything done. It was very hard to give consistent advice to the president of that organization. What happened in the end is some of the people who were really on a different page rolled off. And we got down to a set of people not who were rubber-stamped, who had diverse points of view but were able to come together in the end.

Beth Knuppel: I know at Coupa, you’re a member of the nominating and governance committee. What is it that you think about when you’re evaluating somebody who might potentially join the board? For CEOs out there, what should they be looking for when they’re thinking about board composition?

Tayloe Stansbury: We look at: “What is the skill set?” We have a whole matrix for skill sets that would be desirable for the board, and we score each other on how strong we think we are on those things. And that leaves it clear where there are some areas where we may have some gaps, some skills gaps — some experience gaps — that it would be really nice to flesh the board out with. And so then you go and say, “Well, who would be the people who could best fill those skill or experience gaps?” And then you look for, “Who are the people who are going to work well with the rest of the board, whose voices will be heard, who will hear other people’s voices, and will actually be convergent in their thinking, over time.”

Beth Knuppel: And, of course, the other side of the coin, as you’ve joined boards, you’re also making an evaluation. What is it that you look for to figure out whether a board is a good fit or not?

Tayloe Stansbury: The first thing is, you’ve got to have a passion for the business. If it isn’t a business that you love, then you probably shouldn’t be taking up space on the board. Another thing I really want is to have a visceral sense of what is the strategic path to success for this organization. So how is it that they’re going to weather whatever competitive threats and come out on top? Your sense of that may change over time, but I think you have to go in with a pretty good hypothesis of how this organization can become durable and win against the invariable competition. And the last thing is, it’s got to be people I like, because you’re going to be working with these people over several years. And you’re going to have to come to converged advice for management. It helps if you like everybody who’s involved.

Beth Knuppel: Sure. I’m curious to get your perspective on bringing on a new board member. Is there anything that you’ve experienced personally, or you’ve seen done really well, in terms of onboarding somebody onto the board?

Tayloe Stansbury: I think that bringing on a new board member is a big deal, and if you just hand them a board book and say, “Show up for the next meeting,” they’re going to come in without a lot of context, and they’re going to feel a little bit not on the inside, and their questions are just going to be off-kilter. And what I’ve seen as a best practice is you invest several hours, like a day, in training a new board member by having them meet with some of the senior management people, one-to-one, and then also go through a full rundown on the products, including demos of the products, so they have a real feel for the business and the competitive space.

Beth Knuppel: I’d love to get your perspective on how you think about the board agenda, and what topics are actually covered. Board time is so precious, you want to make sure that you’ve got a thoughtfully constructed agenda. What, in your view, rises to the level of importance for a board meeting?

Tayloe Stansbury: One thing I’ve seen that doesn’t really work really well for board agendas is to try to have every key member of the senior leadership team talk about the progress in their area every single board meeting. What I have found works a lot, lot better is if you look at the board calendar over the course of a year and say, “How do we make sure that every function gets their day in court, if you will, with the board, over the course of a year rather than the course of a single meeting?” And everybody can have a deeper discussion, and you get into the meatier stuff. Now, to complement that, I think having board materials that are first-rate, that come out early enough so that all the board members have a chance to read and digest them, is really important.

And what you can do in the board materials is make sure that the board materials include some news about what’s happening in every function that has something to report — even if they’re not going to present — so the board gets a view of that as it’s happening but then gets the deeper-dive discussions.

Beth Knuppel: Great. When I was presenting to boards on a regular basis, one of the things my CEO always said was, “Be bright, be brief, be gone.” In other words, do whatever you need to, to avoid the dreaded page flip where it’s kind of a march through slides that hopefully the board has already read. Is there anything you would share with folks who are in that spot of presenting to the board?

Tayloe Stansbury: I think it’s important for presenters to realize that the board has read the materials in advance and say the things only that punch up the most important parts of what’s on the pages. I think another good practice is you may think that you’re going to have an hour to present or half an hour to present, and it may be that the schedule goes sideways and you end up with only 5 or 10 minutes to present. It’s always good to have the 5-minute version of your presentation in the back of your mind so if you’re asked to do that, you can say something intelligent and helpful during whatever time remains. An important thing to remember about board members is they come and engage only periodically in the business. You, as an operating leader, are in there every single day. The board member isn’t going to remember all the context that you’ve got in your brain, and they’re not going to remember the thing that you told them three months ago. So making sure that you show not current state, but trajectory over what’s happened before, can help make sense for the board member.

Beth Knuppel: Great. Good advice. I want to close out with two questions. And first, I’m curious, if you look back over your board service, what do you think is the biggest learning that you’ve taken away? What is it that you would do differently the next time you join a board?

Tayloe Stansbury: You know, I think that getting to a sense of flow with a board, where you’ve got good ideas that are coming in, people bringing diverse thoughts, and where people are thoughtful about that and get to a good place quickly in terms of advising management, those are the boards that feel really good. The ones where you have people who are on a different place of, “Hey, I’m excited about this company,” and others who are thinking, “We ought to sell this company,” and you just can’t get them together, those end up being pretty rough situations. And you want to avoid the latter, if you can.

Beth Knuppel: Finally, for founders, for management teams who might be listening, what would you say would be the key takeaway that you would offer them for, really, how do you build and leverage an effective board?

Tayloe Stansbury: Look for openness and trust. Build a board where that exists. And working together, you can actually be a lot smarter than you can individually.

Beth Knuppel: Absolutely. Great insights, Tayloe. Thank you so much for joining us today.

Tayloe Stansbury: Thank you so much.

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The views and opinions expressed are those of the speakers and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any statements by the speakers and disclaims any responsibility therefor. This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified above, if any, are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this document, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.