On-Demand: Foundations for the Future | Building a Board

KW:Thank you, Lisë. I'm KW. I'm Co-leader of the National Real-Estate Practice at EisnerAmper, actually the founder of the real-estate practice at EisnerAmper. I joined the firm 16 years ago. Came from another firm where I was a partner there for 22 years. I started working with real-estate families very early in my career. Most of the clients at that other firms were real-estate families, as opposed to institutions or funds. With real-estate families, there's a variety of families, and each one has its own special composition and own special needs.

What's the role of a board for a real-estate family? It's basically to get advice or supervision from outsiders or family members. So people have different voices, different opinions, and it can add a lot of value to the real-estate principals that are running the company. I've been a member of boards. I've been a member of public charity boards, a lot of experience with boards. I think they've added tremendous value to the organizations I've been involved with.

Lisë Stewart:Good. Yes. I know in all the stories that you've told me, that you've definitely got a lot of experience to bring to the conversation. Let's talk a little bit about boards. One of the things that we often discuss is the importance of remaining strategic, as opposed to necessarily operational, early making sure that you're bringing in that fresh perspective. We also know that some of the boards that we work with are advisory boards, and some of those boards are fiduciary boards. I'm really curious about the advisory board, what you see maybe as the advantages there and some of the differences. Can you help our audience to understand that?

KW:Sure. An advisory board, basically, the role is to bring expertise to areas that the principles of the business do not have. You could have a real-estate business that's started by an architect, or started by a broker, or started by an investment banker, and they each have talents. But they don't necessarily know everything about the industry and they bring in an advisory board to basically help them understand what they need to know, and learn the things that they don't know.

Those advisory boards are very important. They learn about taxes because that's the role that some accountants might play on an advisory board. They learn about financing. They learn about systems that they need to have in place, the technology. They learn about financing, legal aspects of their business. They learn relationship issues. So they might bring a psychologist on the board to deal with family matters, which is a very important role as you understand.

A fiduciary board is something different. There you might have the same kind of talent pool advising the company, but also, it's more of a role where they're basically giving direction to the company. That's basically judging the CEO how his performance or her performance is, telling them what their salary should be and whether they met certain matrices that they set up for the performance of the company. You'd see that not generally in the first generation because a founder of a business doesn't want to be told anything that he has to do or should be doing, or be judged by any kind of matrix.

But in the next generation where there's other family members involved who have a financial stake in the business, but not necessarily an operational stake in the business, you'd see more of a fiduciary board being formed, which would basically give the other family members a voice. You might have outside professionals also giving direction to the CEOs, who might not be as experienced as the founder. Is that your understanding of the difference between the two boards?

Lisë Stewart:Yes. Yeah, that's really good. I like to sum it up for my clients like this, but just as you said, an advisory board is put together often for a shorter term to be able to provide specific advice, to help that organization, that family, that group, to be able to meet the clear strategic goals. These may be investment goals, growth goals, whatever they might be. A fiduciary board, on the other hand, is generally a longer term board and they have a clear fiduciary responsibility. That means both financial and legal. So it means that those board members also carry some personal risk by being on that board.

In some cases in, and you and I have seen this before, sometimes the family will maintain its own fiduciary board and maybe just family members, multiple generations, they might have one or two outside people. But it's a pretty close knit group and they're really paying attention to the financial side of the business, the ethical side. They're really trying to protect the wealth of enterprise, the wealth of the family, the wealth of the organization. Advisory boards often serve, as you said, quite a very different purpose there.

That leads me to my next question about family boards. I know you've been involved with a lot of family boards. And so, what do you see are some of the really unique challenges of a family board, a board, just to be clear, that's made up of primarily family members? Tell us about that.

KW:Well, you always hear stories about people who put the fun in dysfunctional families.

Lisë Stewart:Right.

KW:You have a lot of varying interests. There could be the first generation is mom and dad, or just mom or just dad, who run the business. The next generation has, two, three, four, five different family members who are involved. Not all of them want to be in the real-estate business. Some of them might want to go into law or accounting or medicine. But they still have an ownership stake in the company.

There's other issues also. There's charitable management for the organization. A lot of families set up foundations. Family members on the boards basically make decisions as to which charity should be benefited, how the money in the foundation should be invested. You look at businesses that start off as single family home builders, that end up with multi-family homes. Do they want to diversify into office? Do they want to diversify into shopping centers? Those are things that family might have a very strong opinion about because it's their money at risk.

That's where the family board really starts to form, what direction should the company take? How should the funds be handled? Who has responsibility for what? The boards can guide the company to the future doing that. I've worked with families where one sibling was given responsibility and that ends up in large lawsuits if the sibling is not as cooperative as the other siblings like. Nobody wants inter-family lawsuits. It's not good for the business. It's not good for the families. So we try to avoid that by advising the boards what their roles are and helping shape the communications that go on.

Lisë Stewart:Good point, especially that about the communications. I think that that goes hand in hand with managing expectations. We do a lot of work with family boards and one of the places that we often start is around governance. A board, a family board that's overseeing the assets of the broader family, they become stewards of the family wealth. So what does it mean to be a steward of the family wealth? What are the roles and responsibilities of board members? What does this look like? What kind of decisions should they be making? How do they all get on the same page, just as we were saying about these key investment decisions? How do they get really some alignment around their philanthropic philosophy?

Where do they want to give that money? What does that look like? How do they manage the performance expectations of people who are inside the business versus people who are outside the business? All the way down to things like compensation, and titles, and who gets to do what. There's so many moving parts to having a really effective board and making sure that there's a conversation that happens. Well, I take that back. It's really multiple conversations, right?

KW:Right.

Lisë Stewart:About what it means to have this effective board. I want to go back to something that you mentioned briefly earlier around this idea of a fiduciary board. We know that in a fiduciary board, especially when you've got strong outside people who understand that their role is to protect the company or the organization from both a financial and a legal perspective, part of that means giving feedback to the CEO. And as you said, sometimes people in powerful positions find this a very difficult thing.

Sometimes board members struggle to be able to give effective feedback and sometimes CEOs struggle to hear that feedback. Can you tell me a little bit about what you're seeing out there? What are some of the things that companies struggle with when it comes to managing the performance of the CEO?

KW:Well, especially where you have a large number of family members who aren't involved in the business, their main concern is that the assets are protected and they're getting their cash flow, and sometimes those are completely diametrically opposed concepts. You look at what's happening in the real-estate world today, companies that have distributed every cent on the dollar are going to struggle today because cashflow is being interrupted by deferrals on rent, vacancies, changes in the rent stabilization laws in New York City, all of these things could impact the company.

Keeping a reasonable reserve might protect the company's assets in the long-term. That doesn't help the pocketbooks of the people who are living off of the income from the properties. So that's a role that the fiduciary board will help play to determine a reasonable balance between the two interests, because the CEO is going, "I'm going to protect the assets," and the rest of the family is saying, "But we need to protect our assets." The fiduciary board can really make those decisions in a fair and reasonable manner and you won't get the, "But mom always like you best, which is why you're in charge," type concepts.

Also, a fiduciary board will look at business plans and try to determine the risks involved with business plans and see what the strategic plan for the company should be. Should the company be ever expanding, or should it be a more cautious investor? Should properties be financed? And if so, at what level of debt coverage should the properties be financed at? When there's excess proceeds, should the proceeds be distributed? Should they be retained by the company as a reserve, or should it be used by the company to purchase additional assets?

Those are the kinds of strategic decisions that the board really helps with. I would think that a strategic plan is not a single cast-in-stone document. A strategic plan is a living document which sets forth the goals and concepts that the company is going to operate under for the next couple of years. It has to be reviewed on a regular basis. So the decision to finance it at 50% this year might not work in two years. It might be 70% in two years.

The decision to buy additional assets today might be a great decision because the prices are God knows where. Five years from now, it might be a good idea to start selling assets. So you have to basically look and see what makes sense from a risk management, from a strategic growth plan, and for the needs of the family. I've seen situations where the two founders, or actually the two sons of the founders, had six children who were not interested in operating the business.

Those six children didn't even talk to... One group of them didn't talk to one of the founders, so it was a difficult situation. They set up a fiduciary board to actually run the overall management of the company and they would have an outside manager hired by this board to do the operations of the company, unless one of the grandchildren stepped up, which was the case eventually. But that's the role of a fiduciary board. It's like, "Okay, the family's not going to run it now. We're going to bring in professional managers."

The fiduciary board is there, and there might be family members on the fiduciary board, as well as professionals. But that board is there judging the performance of the outside manager, giving the direction to the manager, and setting the strategic plan for the company. Very important role.

Lisë Stewart:I completely agree. I think it's important, whether that CEO or that senior leadership team are internal, family members, or external professional managers, as you said. I think in terms of some detail around that, one of the things that we encourage our fiduciary boards to do is to really work with the senior leader, the CEO of the company, to outline what constitutes excellent performance. What are the expectations in regard to performance metrics that the fiduciary board is going to be tracking? You mentioned a number of them.

I think using that strategic plan as the foundation, then identifying what the key metrics are, the performance metrics, working with the CEO to clarify that, and to also be sure that everyone is in agreement with how those metrics are going to be reported out. Is this something that on a quarterly basis, just an annual basis? How much information does the fiduciary board want regarding performance? And then, when and how are they going to sit down with that CEO and say, "This is really meeting our expectations. This is not quite meeting our expectations. And here are the specific changes that we need to see."

If everybody agrees with that upfront, then we're less likely to run into those confusion, frustration, disappointment, and finally, unfortunately, as you said earlier, conflict. That's what we're trying to avoid. That doesn't mean that we don't want to challenge decisions and ideas, and we certainly don't want to just sit around and accept the status quo. We want board members who are outspoken, and we want people managing these companies that have leadership traits and a mind of their own. So healthy, robust, candid discussions are welcome.

But conflict that undermines trust is a real problem. When it comes to giving that feedback, we want to manage those expectations early. There's something else that we had talked about. Well, when you look across at a board, today there's a lot of conversation about diversity on boards. When we talk about, how do we make sure that a board is both effective or, I guess, both diverse and effective, well, can you tell us a little bit about that? I know you've spoken a bit about this, and that you've got some experience. How can a board help to encourage greater diversity across many different areas and become more effective?

KW:I think that's the same question.

Lisë Stewart:Right. You're probably right.

KW:A diverse board is more effective than a non-diverse board, that when you're dealing with... You look today, diversity and inclusion is one of the number one topics in corporate America today. It applies not just to corporate America, but to privately held businesses as well, that when you get the same opinion from 12 different people, because they're all of the same background and understanding and socioeconomic background and racial background and gender background, it's going to be the same answer. It's basically just talking to yourself.

When you have 12 people on a board of different backgrounds and they bring different talents and different experiences to the table, they're adding something of value. This diversity is really important to get an idea of where you want to go going forward and what the important issues are facing the company and what directions the company could take. If somebody has an idea, people have to listen to it. They have to be open to ideas. They might not go with it. They might question the idea and question the person who brings forth the idea to expand on it, to tweak it a little bit.

They start brainstorming and it's ideas that they never would have thought of on their own. But they're bringing it to the table. It creates avenues to explore that they never even knew existed. That kind of diversity really does change the direction of a company, gives it strength as opposed to weakness. And it's something that's very important,

Lisë Stewart:Right? I completely agree. In fact, we've got a question about that. Ken, in your experience, how can we find really good board members, especially if we're looking for people from a wide variety of backgrounds, skills, etc.? What have been some of the ways in which you have seen your boards that you work with, the clients you work with, find really talented people for their boards?

KW:A lot of the people that serve on boards come from professionals that the company works with. Not all over. They say you can't hire 12 lawyers and expect 12 different opinions from the lawyers. You might get them but you can't expect that. But hiring your lawyer, your accountant, your architect, your bankers, you get different opinions from each. Looking for diversity, they should all be from different types of backgrounds if possible, whether it's racial, gender, sexual orientation, gender expression. It just brings something different and the unique value of their opinions and their experiences that you don't have the benefit of unless you listen to them.

Lisë Stewart:Right, right.

KW:It's becoming a member of the community at large, as opposed to being insular. So hiring 12 people from your country club is not going to give you a diverse board, even if they all look different. If they're all in the same country club, chances are they think alike. So try to go beyond that and you'll find things that are very eye-opening.

Lisë Stewart:Right. Yes. Again, I agree completely. I think that one of the key messages that we give our boards all the time is, don't just hire your friends. We have a step-by-step process, and I know you and I have talked about this before. First, take a look at your strategic plan and figure out where your gaps are. You had mentioned this earlier on, where are your gaps in knowledge and skills that you really need? Then take a good look at the marketplace. Where could you find information and what are some of the experts?

You don't even have to necessarily know these people. Maybe reach out to people that you've read about in your trade journals, or you know about from the industry that you work in, whatever it might be. Ask them for recommendations about people who might be useful on your board. Maybe you're looking for somebody who has a little more experience on, I don't know, social responsibility and investing. Maybe you're looking for somebody that has more experience in urban design. I don't know, but start getting some recommendations.

Don't be afraid to recruit and interview various people. Don't just take the first person, look for people who are going to bring that diversity of thought and background. One more plug for an organization that some of you may not be familiar with is the Private Directors Association. It's called PDA, Private Directors Association here in New York. There's a newer association, a newer membership group. It's national. They are often advertising for good board members. And so, if you become a member, you can let them know what you're looking for in terms of diversity of background and experience and the skills that they need. There are multiple organizations that do this, but really do try to reach outside that comfort zone. So I completely agree with you.

KW:You may reach into a couple of areas that the board should be focusing on, or that the members should have talent in. There are two areas that you didn't mention that are very important today. One is sustainability. We're looking at overall office stock that is 50 years old around the country. The pollution or carbon footprint of those office buildings is very high. In fact, 50% of the carbon footprint comes from buildings. So they're looking at reducing the carbon footprint of buildings today, and sustainability is very important to understand.

One of the proposals that Biden has is to basically create a sustainable carbon reduction for existing buildings and future construction. They're looking at potentially creating millions of jobs in engineering and environmental studies around this. So having somebody who understands that on your board is very key today. The second thing is technology. Technology is so important and the concept that... The way you look at buildings, how they were built, it really didn't change much from the 1860s to today.

Steel girders, whether it's glass outer walls or brick outer walls, it's steel girders with an outer wall. That was a development in the 1860s. I actually had a client that had a building that was basically a masonry building for 12 stories. And behind it was an annex built in 1868, which was the first steel girder construction building in the city of New York. It was an annex to an existing... A last masonry building built in the city of New York. So it was pretty unusual. But that's the kind of construction that's been going on.

Now you look at technology changing that. I looked at a plan for a building that was 125 stories tall, a residential building. Basically it was a single tube going up with the floors being cantilevered, up the outside, and then the glass thing on the outside, no steel girders, no pillars. It was pretty interesting to see that kind of design. It's computer-driven, technology-driven. To build something 125 stories tall, there's a lot of technology involved in that to keep the building from swaying tremendously in the winds.

You look at that, it's like, okay, construction's changing. Finance is certainly changing. Brokerage is tremendously changing. Technology is impacting everything. I have a client, they developed a technology that monitored where people were within the building and how many people were in a particular spot and delivered the appropriate amount of HVAC to that location. If 25 people were in one room, that would get extra air conditioning, and if there was one person on another side of the building, they might get heat because it's cold and they're able to control that and keep basically a constant temperature.

How many times have you been in your office and saying, "Oh my God, it's 90 degrees in here." And somebody on the other side of the office is freezing because the wind is going through the windows. Yeah. That's what those systems are designed for. So understanding real-estate technology today is really important, and that's a great position to put on your board.

Lisë StewartYou raise such a good point. I think that it was key that boards and board members remain educated and knowledgeable. You can put together an effective board. Let's say, for example, a fiduciary board, smart people, knowledgeable, you trust them, you believe that they can make good decisions for your business. But to your point, the world is changing very quickly. Technology is changing quickly, the demands that... etc. And so, I think that one of the most important aspects that a board has to remember is that continuous education is important for the board as well.

So whether that means occasionally bringing in a subject matter expert who can help to educate the board on something that's new and different, whether it's them just simply investing in their own education and knowledge and so on, I think it's really key to a board being very effective. We talked about a lot of different things, and in a minute, I want to open it up for any more questions that the audience might have. But I'm wondering, from your perspective, what might be, say, two or three of the most important strategic questions that you think a board should be asking themselves? If we want boards to remain strategic and really effective, what should they be asking themselves?

KW:I think the most important thing for a board member to ask is, how can I add value to this company? What opinions do I have that will create a direction for the company to move going forward? Can I bring something new and different to the table? I think that's really the key to being an effective board member. Saying yes to the CEO, anybody can do that. It's easy. You don't get any argument from the CEO when you say that, "Oh yes, you're genius." You might even get a raise.

But having the ability to look strategically and critically at the way the company is operated... Not getting into the details of operations. That's for the management. But the overall strategic growth of the company, the way the company is handling the assets, the way that they're thinking about the future, being critical on that and bringing a fresh idea is really the best role that a fiduciary or advisory board member can bring to the table.

What's another? I know we talked yesterday and I had all these... I think also looking to see what the role of the board is in terms of protecting the other family members who have financial stakes in the company. If you're in a public company, and real-estate companies can grow to public companies, I've had clients do that, you really look to see what the company is doing. Does it protect the owner's interests, including the public owner's interests and not just the managers, and not just the CEO's interests?

Having that responsibility as a board member is really important, and keeping an eye on the big picture, not just, "This is what this asset's supposed to do," but the big picture for the company. What's the company supposed to do? How is it protecting the company's assets? How is it protecting the shareholders' interests? The CEO's protection is the least important part of that equation. So that's really important, to have the big picture view and bring that to the table and into the discussions.

Another major thing that boards are supposed to do is to judge the performance of the CEO. That's for a fiduciary board, and setting up those matrices, the performance levels that they're looking for. What is the standard of excellence that they're holding the CEO to? That standard of excellence is something that's a difference between the company just plotting along over the same way it's been doing versus doing exceedingly well going forward.

Lisë Stewart:I agree. Yeah, no, those are good examples. I think that the most effective boards I've ever worked with do have a few things in common that they do over and over again. One of them is that they do ask themselves that first question that you posed, and that is, are we adding value? They have to decide what value actually looks like. Sometimes I suggest to the board, that every once in a while, they sit down with, of course, the CEO and anybody in a senior leadership team or a management team, other people in the organization, and ask them that question.

We did a survey several years ago of boards all across the US, and of the organizations that they serve. What we found is that unfortunately, many times the staff don't really understand what the board does. So they don't really understand the value that the board brings. I think having that more open conversation and making sure that people realize what the role of the board is and what you're there to do, and to ask that question yourself.

The other question I would say is, are we remaining strategic as opposed to being operational? Then the third one I sometimes suggest is that they stop to think about, are they expanding their world of knowledge so that they can ensure that they are true stewards? That they've got that larger, bigger, regional, global perspective, whatever it might be. We do have another little question here though. I'm at [crosstalk 00:33:53]-

KW:There's one other thing I want to add.

Lisë Stewart:Sure.

KW:I think one of the roles that the board should have is who should their successor be.

Lisë Stewart: Oh, very good. Yeah.

KW:That a board position isn't a lifetime assignment. It is a role that you play for a limited period of time, and you need to bring in fresh people with fresh ideas on a regular basis. So finding the successor that might have the same tasks as you do, but a different perspective, different experiences, I think is really important. And it's a really important role for board members to play, to help the organization, not just while they're on the board, but going forward.

Lisë Stewart:Right. Perfect. I'm so glad you put that in there. I can't believe that coming from the part of the organization that I come in, where we specialize in succession, that we hadn't thought about that. So thank you for bringing that in. In fact, that's a lovely lead into this question, which is how do you get rid of a board member, which... I'm surprised. We actually get that question a lot. Sometimes you've invited somebody on to the board, that just doesn't perform the way that you thought he or she might. They're a dud.

KW:Or they're disruptive. I've seen that happen too.

Lisë Stewart:Right. Yeah. Yeah. That's right. I'd love to get your ideas. I will say this, just in the beginning. When you're considering bringing somebody on a board, I will usually suggest that you do this, as you said earlier about term limits, do it for a certain amount of time. I usually suggest, particularly if it's an advisory board, that it's a one year, and then you extend that offer if they turn out to be a really good board member. The second thing is the board members have to be very clear on what constitutes success for them. What does excellence in performance look like?

So I suggest to boards that they put together a short list of the answer to this question, "If we are a highly successful board, how will we operate?" That might include things like coming to board meetings prepared, making sure that everybody gets their voice in the room, that you are willing to effectively and constructively challenge ideas, that you are willing to follow through if you promise to do something or whatever it might be, that every board puts together their own list of what constitutes excellence. And then you can talk about that.

Then if you have a board member who isn't performing against those things that you'd already identified as being key, then you've got some grounds to say, "You know, we may not be a fit. We may not be a match here." And to constructively, with dignity, allow them to roll off the board. I'm just curious from your perspective, have you seen instances where you've got a non-effective, ineffective board member and they've had to ask the board member to leave?

KW:I've seen conflicts between board members and the CEO where it was, "Either you go or I go." So, yes, I have seen situations where board members have been asked to shorten their term of service or not renew for a subsequent period. It's a hard thing to go through because you asked the person to be on the board because of a relationship. They weren't people you went to the street and said, "Oh, you look like a good board member and advisor." They researched. They interviewed the person. They knew the person from somewhere in the world. So to break that relationship gently, without destroying the underlying relationship that you have with the person, is important.

Not always easy, but it's important. If you don't do it properly, you could have division amongst the board. You could have infighting. Within the management circle, you can have problems because the CEO didn't like what the board member said, but the vice chair did. Then you get, oh, yes, the CEO fired the board member. But the vice chair's like, "What the hell?" And conflict. So you try to do things to avoid conflict and protect the organization going forward.

I think that it's an important role, and having a term limit, and having a charter for the board as to what their roles and responsibility are. You can see the person is meeting their responsibilities. They might not say what you want them to say, but they're meeting their responsibilities. I think it's more difficult to dismiss a board member who's meeting their responsibilities but not talking the way you want them to talk, disagreeing with your business plan, saying that, "That's a little bit too aggressive. You might want to scale it back."

They might not want to hear that, but it's important that it be said, and you want the board member to feel there's certain amount of protection that they can say those things without being worried that they're going to be summarily dismissed from the board. But board members who aren't performing, clearly you'll have a guideline as to what their performance matrix is and you can say, "Listen, you were supposed to do this. You were supposed to attend a meeting a month. You've missed two months out of the last four. Unless you step up to the plate, we want you to step down so we can get somebody who's actually going to participate." Those aren't easy conversations to have if you have, "This is what the guidelines were and you didn't meet them."

Lisë Stewart:Right. Right. Yeah. I think sometimes board members, and even the organizations that put the board together, don't take it seriously enough. A board is an organizational system. It needs to have its own rules and expectations and responsibilities, and there needs to be some real clarity around that. As we said in the beginning, an effective board can be an extremely useful tool in building a strong enterprise, whereas an ineffective board, it really does become a liability.

We don't want people joining boards just simply because they want a bit of an extra income stream. We want people to join the boards because they've got something to really add. They bring value. They're interested in contributing to the success of the organization, and they're going to get something out of it themselves. We like to be in a room full of smart and articulate people who are helping to grow something together. So there are some real advantages.

KW:Yes. A board can be expensive also. I was working with one family that had a mother and two daughters who were the principal owners of the business. Each of the daughters had three children. We would have meetings where each of the family members had two to three professionals sitting with them, charging by the hour. So you'd have board meetings going over minutia, at like $50,000 an hour. It not very effective because the concept for that board was basically to be looking at what the bigger picture is. How do you do governance with a family where each had a very important role in what happens to the business and how the properties are managed?

But it was too much. Each one of the family having a different representative, I say board would have been a fine idea. But everybody had the voice and it was a mess. Eventually, they worked it out, but just having that many people, that many opinions without really having any role defined for each person created a problem.

Lisë Stewart:Oh, that's a really good example of a very ineffective board structure. A couple of tips for those of you who have boards and you're really wondering about, well, how can I make them more effective? A couple of things that we do is, one, prior to a board meeting, take a look at the action items that came out of the last board meeting. Take a look at your strategic plan and pose three to four overarching strategic questions for your board.

As part of your board packet, and as part of your agenda planning, give your board members some idea of what are the most important strategic questions that need to be addressed this quarter, or however often you hold those board meetings. This helps to really laser focus their attention on the things that are most important to you. Also, determine prior what kind of decision level do you want to get to around those issues at this point. Are you simply using this as an educational opportunity to talk about something that's new or different or important to the organization?

Or do you need the board, if it's a fiduciary board, to actually make a decision, if it's an advisory board, to make a recommendation? Remember advisory boards don't make decisions. They only make recommendations. We have found that to be a pretty consistently useful tool to really structure those meetings. Also, make sure that you do have an agenda and that you do provide the information to your board members prior to the meeting. One of the biggest complaints that we get is that board members, they don't have all the information that they need in order to make good decisions and good recommendations.

Then the second biggest complaint that we get is that they make recommendations. They talk to the CEO or the senior management team, and nobody listens. They don't take their advice. Why would you do that? Why would you pay for a board but never listen to what they have to say? So really be careful about how you manage that board relationship.

KW:Sometimes it's planting a seed, as opposed to turning... As they say, when you turn the ship, a little adjustment makes a big change in direction. You might have the big idea and you put the idea out there, and it changes the direction of the ship a little bit, but it really changes the direction of the ship, and that's an important thing to remember. You can't change the world in one sentence or one idea, but you can change the direction a little bit. Move the needle in the right direction.

Lisë Stewart:Actually, that's a lovely closing thought. I want to bring our audience's attention to... There's a widget on your screen. It's our resource widget. We put some books out there that we thought you might find useful. Just to let you know, there's a lovely book by John L. Ward called Creating Effective Boards For Private Enterprises. All right. There's a lot of great information in there. It's a heavier read, but it's really very useful.

Another one that I really like, if you do have an advisory board and you want to get the best out of that advisory board, remember that they're there making recommendations. Game-changing Advisory Boards by William Hawfield and John Zaepfel. I'm not sure I'm saying that right. Again, I found that really useful. Somebody had asked the question about bringing in really effective and talented board members. I just love the board work by Hildy Gottlieb. She's written widely about effective boards. But she has this one book called Board Recruitment and Orientation: A Step-by-step Common Sense Guide.

I love this book. She opens it up with the quote that we had in our advertisements, that if your board members were kidnapped by aliens, would you actually notice that they were gone? And if you did, would you care? She really talks about it's so important to get great, talented people on the board so that it helps your board to be effective and enjoyable. Being on a board should be a really enjoyable experience. Ken, I'm just wondering if you have any closing thoughts that you want for our audience before we put a bow on this.

KW:Just to remember that when you have a board, that they're there to help the company. They're not adversarial to the company. The CEO is getting information that they wouldn't have otherwise, that they should listen. They don't have to follow the advice, but they should listen to it and be open to ideas because an idea can shape the way the company goes going forward. It might not be, "This is exactly how you're going to do it," but it could be, "Oh yeah, I can change the way I'm doing this a little bit to make it more efficient and get to a better result for everybody involved."

So it's not necessarily adhering to the advice to the letter, but listening and being open to it. That's a really important role for the CEO. For board members, I think it's really important for them to understand what their role is, that it's really important to have the board member know what their role is going in, what their responsibilities are, what they need to do at each meeting, and getting information from the company before the meeting so they understand exactly what the company's position is today and what the company plans to do tomorrow, before they go in, is really important. That way they can come in already thinking about the ideas that would help the company grow going forward.

Lisë Stewart:Right. That's great. That's wonderful advice. Thank you so much. I always enjoy talking with you, Ken. You've always got so much knowledge and experience. Just before I turn it back, I just want to say to everybody how much we really appreciate you being here, and to encourage you to go to our website where we have the resources that we talked about. There are links to the other webinars that we've done. So if you're interested, please check it out. It is eisneramper.com/refamilies. Again, Ken, thank you so much.

KW:Thank you, Lisë.

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