TRANSCRIPT
Matt VO
Welcome back to Sound-Up Governance and to part two of my inspiring conversation with Chih-Ting Lo. If you haven't listened to part one yet, trust me just pause this right now and scroll back a few posts and check it out. You'll meet a young corporate director and entrepreneur whose work is at the intersection of mining and decarbonisation. She's got that magical combination of deep technical expertise, the ability to communicate complex stuff to noobs, like me, and the ambition to do cool stuff that makes a difference in the world. Here in part two, we'll zero in on Chih-Ting's governance journey, starting with this question, which I didn't do an awesome job at wording, but, well, nobody's perfect.
Matt
You've got all of the technical expertise anyone can ask for. You've got all of the experience at this point that anybody could ask for. And I still suspect that you're an outlier. And I want to talk about age separately if we could, because I think if I'm remembering correctly, you and I are roughly the same age, or maybe even exactly the same age. But let's leave that aside for now. You are a woman in mining, which is still not very common. You're a woman of color in mining in Canada, which is really, really uncommon. And, you know, I'm just curious the extent to which that affects you. We can talk about in the boardroom, your experience there, your experience as a consultant, whatever angle is, is interesting to explore, I'd just like to hear more about how it affects the way that you experience your work.
Chih-Ting Lo
Yeah. So mining, women mining is, is certainly, as you mentioned, not a high percentage in the workforce. I think in 2021, McKinsey has released a study where somewhere, it's definitely less than 20%, say somewhere between 15 and 20% of the global mining workforce are women and that's obviously compared against 50% of the population is women that's quite small. And over the last maybe five to 10 years, there perhaps is a slow growth, but really nothing significant. On the board of directors side of things actually, the percentage of women in on mining company boards are higher than the percentage of women in executive roles in in mining, perhaps partly because of some of these, not regulations by you know, the proxy advisors really voting against companies that don't have enough women on the board and all this other public company related reasons.
Matt VO
Okay, for those of you who aren't quite nerdy enough to know what a proxy advisor is, they are firms that get hired mostly by institutional investors like pension funds, or mutual funds, you know, funds that have a stake in lots, sometimes 1000s of companies. Too many companies, for them to make informed decisions on how to vote their shares on stuff, like director elections, for example. Like, let's say there are 10 directors on each board of the 1000 companies in their portfolio. They don't have the resources to learn about 10,000 directors and decide whether to vote for them or not. So they hire a proxy advisor to do that work for them. That means the proxy advisors actually have a lot of influence because they advise lots of huge institutions on, for instance, whether director A should be elected to the Board of ABC. It's slightly more complicated than that, but you can see how proxy advisors might have the impact Chih-Ting is describing on something like women on boards.
Chih-Ting Lo
So there is a few more women on boards in mining companies. So how does that affect me in my job? So I think it's an interesting question and I know that everybody experienced this a little bit differently. I've always find that as someone who have a technical background and that's the work I do on technically even though it's strategic but it's backed by by data driven and science based approach that it's is much easier accepted because I bring in expertise on a specific subject matter that they need help. So I usually find I'm welcome to that conversation and my inputs are valued. Mining is as with many industries is a bit of a it's a small world once you have an opportunity to establish your practice, have demonstrated some of the good things you've done. It's a self perpetual process where now you just all of a sudden have more trust with the people that even if you meet for the first time, because of your track,
Matt
You're in the "in" crowd
Chih-Ting Lo
yeah, because of the of your track record. So So in my professional experience as as a consultant working with mining companies, on innovation and decarbonisation, I would say it's been going well. Have I have I encountered biases? Yes. But I don't think they were anything that stopped me from doing what I wanted to do. I was never in any situation which I was extremely uncomfortable. Have I had many difficult situations? Yes. But not uncomfortable or feel that I was very threatened. I have, have not had those experience, which is lucky, because not everybody can see that. And that's, you know, I'm on the board of this organization called Mine Shift. And the reason why I'm on Mine Shift is because there's certainly lots of issues around workplace harassment in the mining space. So it's not like it doesn't exist, but in my professional experience, because of what I do and the area I'm in, I haven't had too much issues on that perspective.
Matt
So there's, there's a reason why I wanted to separate out the age thing because you know, you you're objectively younger than an average director, or median director or you're, you're objectively young, across any any comparison, when we look at the world of listed company directors. And I have a very small community of people whom I know who are young people in this world, whether listed companies or otherwise. And as a result, I struggle to imagine a recommended path for people to follow because there's so few real world examples of people who have traveled a path. And in a lot of cases, it seems as though the path is not, you couldn't duplicate it, right? It just requires so many different... it's a combination of luck and opportunity and talent, and so on. But I'm curious, I don't want to put you on the spot asking you for advice. But I mean, what could organizations learn? What could young high potential people learn from what you've gone through that might help to open doors a little bit more for young directors, which are just seriously underrepresented in boardrooms?
Chih-Ting Lo
I have a passion project about that, which I'll tell you in a minute. But so there's, there's two sides of it. Right? So let me start with how I've done it, and not sure if they're recommendations, but these are the things I can share. That's at least what I've done. So there are three things. Number one is you have to be prepared. Like any jobs, like this is a this is a career, this is a job which you need to make sure that you know what you're getting into. And because younger people like myself, when I first started looking at this, I don't know a whole lot about governance. I've heard about it, I feel like I've helped my clients through that process. But there's a learning process for me to just understand so that I can be prepared. And number two is now that you know what board is about and you're prepared. You really want to have a narrative. What's your value proposition? I think some people I speak to will say, this age, let's use the ages as an example would be like, "well, you need more younger people on board." But I Yes, I agree. But I agree not because we need younger people on boards. It's what younger people bring onto the board. It's not because you have someone who is younger, in this case, it's not that young, right? Like I'm 42 years old. So it's younger, perhaps on the board journey but not younger as in a general population. So it's really around the value proposition of what you bring with your lived experience and with your composition, all that come together that make you valuable on the board. And know that you're not going to be valuable for every board. Right? Like nobody's valuable for every board. So so just be prepared for that you have your value proposition, you know what you want, and you want to look for that, but you may not be successful right away for many reasons. And the third one, and the last one is I think you want to be very intentional. So when I was ready, so when I felt that I prepared. When I have crafted my value proposition and tested that theory with my trusted friends who are also on boards, then I became very intentional. I tell people that I am ready. I'm looking for a board role in this type of skill sets, which I think I'm useful. If you know someone that I should speak to not to say that they have a job for me, but someone I can talk to about "this is my value proposition. This is me and I want to get on boards, who could I talk to?" And that really did lead to my my board position at Sherritt. What the companies want also matter. So I have my unique set of skill sets and lived experience and my journey sort of through my career, which is very atypical to a public company board member. I had not run a big company with 1000s of people. I was not a CFO of a large company. I'm not a lawyer. I'm an entrepreneur with a small business in this niche area where I do ESG and innovation. It's not a typical skill set that people are looking for. But in this particular case, where Sherritt, they were going through a transformation as an organization, they were ready to move to the next phase where ESG and innovation is two areas of where they see the strategic direction might be going. They see that they have a bit of a gap on their on their skills matrix on the current board. And they come out to say, Hey, these are kind of the people we're looking for. Who would those people be? So I was lucky in a way where the company's looking for something I have to offer. And I was very intentional what I'm what I can offer so and then. And somehow, we through various connections, we were introduced. I had a conversation with the CEO, and really love his vision on where he wanted to take the company, I was very happy to have those additional conversations on how I could be part of that journey. The board chair was very open minded, and welcomed me to this conversation. And I had a series of interviews with other board directors. And ultimately, after a fairly long process, we all decided this could be a good thing for me and for the organization. And then I joined.
Matt VO
I was really curious for Chih-Ting's perspective on how Sherritt or any other organization, I guess, could take the lesson learned from bringing her on board - that is, recruiting someone who brings tons of tangible value, but comes in an unconventional package from an experience, expertise and demographic perspective, and make sure that the lesson endures and is repeatable. Instead of just a one time fluke.
Chih-Ting Lo
I've been going on these walking meetings with another person who's on the board, and she's not in the mining space, but we're both in our 40s. And she's on a health tech company. And so we get together and just have conversations about boards in general. And so that's what we want to tackle is really understanding why people are not actioning it. Because people talk about EDI, like there's no tomorrow, and always talk about how they want to do something or how this is the future. But I don't see a lot of actioning. Our thought is we would find some TSX 60 listed companies and try to interview some of these CEOs and board chairs on why this is not happening. We have a we have some theories on why this may not be happening. Number one was exactly sort of we talked about on the skills matrix, if you design your skills matrix to be excluding certain type of demographic, not to say that you have to be, you know, 60 years old. But if you say someone has to have 25 years of experience, or executive experience, then you you're automatically excluding someone who's in their 40s and 50s, maybe early 50s. So is it by design? So we want to figure out, is it by design we're not doing that. Because we've we've set our system to be such that it's impossible to get those people in? Is it because the incentive to the recruitment companies are set up such that it is not conducive? Like why would they want to take a risk? If they recommend you a young director, who may or may not turn out to be the best candidate in the long run, why would they want to take that risk? Is there any incentive for them to take that risk? Maybe not. So if you don't have a flow of these kinds of candidates to come in front of you, then you'll never take those people because they don't exist through through this kind of search process. And on the other hand, I think young people like ourselves may not be not when they may not be ready not in terms, not necessarily in terms of our skills and experience, but may not be ready because we don't have the time available to do that. We're now getting into that executive role, which consumes all of your time already, as a as an executive in any kind of organization. You probably have a growing family. So you also want to be able to commit time to your family. Do you really have additional time and resource available to say "why don't I commit to looking for a board of director role somewhere else because that's what I want to do right now in this time of my life." So these are some of the theories we have but we want to test it out on why we're not actually doing it. And therefore thinking about how we can actually make a difference because I do want to make a difference. I believe that there's lots of value for diversity of thought and I feel appreciated on the boards I'm on. So I do believe it's a place for for younger people like ourselves, to live on big boards and small boards. And I want to encourage that but I don't have the answer for you. But what I'm what I'm looking for that.
Matt
Okay, I have a theory but I'm going to share, I'm not going to share it yet. I'll share it after I ask the next question. Which is, I remember, and you've, you've mentioned it in passing already in our conversation today. But when we first talked, I look back at our notes and I saw you made a point of saying, you know, I'm not I don't really know much about governance yet. And I want to learn more. And hear you we're on this journey already, at that time, to becoming a pretty big deal on boards. And so I'm curious, how, how do you feel like you've grown in the governance space since then? Which is only a couple of years ago. But also, what does it even mean to you to be good at governance? What does that look like?
Chih-Ting Lo
Practice actually helps.
Matt
Yeah!
Chih-Ting Lo
So when we first spoke, I was on a not for profit board. I've since grown a little bit in my portfolio. But just being able to be in the same room with people who have done it. And and so people who know what good looks like, or at least I think they know what good looks like, and I and I agree with them on what good looks like. So just being in the same room to do this practice, and observe how other directors take action. And I think that was super valuable and hard to learn elsewhere. But you can also have this structured learning observation through various training courses, like the ICD course, and others, which you do have these scenario and practicing as you take those courses. So number one, I improve around, because of all the practices I have. And it's, it's okay, because it's okay that I make mistakes sometimes, and I'm sure I have made mistakes. If you're in a, hopefully a good board, where you feel not only that you're valued for your input, but also in a very trusting environment, and makes you more comfortable. And I probably have said things I should probably shouldn't have, or haven't really conveyed in the way that I should have. But because you're in a safe environment, and you have these peers that are also helping you out, I actually felt very comfortable. And that's another way of learning and growing. And second of all, there is a community of practice in board, and try to surround yourself with people who know what they're what they're talking about, and who know what good governance look like. I have a mentor, and I speak to her regularly. And so that's a way for me to learn and kind of bounce off ideas and get some input or insight on how other people do it. Lastly, is really just remembering why you're there. You're there because whatever you are as you are living experience in your career, and all that is what put you in that spot. And so you are, you've earned that. And you have value to provide. So just being confident that you're not there, because you're there, but you're there because you have something to offer. I think that makes me feel more confident and comfortable around how can I help with that with the governance of the organization.
Matt
So you you mentioned a few times, surrounding yourself with people who know what good governance is. And I've been on a bit of a journey for the past year or so, being really annoying and and asking straight up board members, board chairs, CEOs, "what's good governance?" And I've gotten precisely zero compelling answers. And by compelling what I'd be looking for, is something that A. makes sense, right, so that I understand what they're talking about. But just as importantly, if you're able to say something that makes sense, what I'd want to hear is something that would make me know what I can do in service of that good governance the next time I walk in the room, right? So it's some way to tell me what good looks like so that I know how to get there. And I don't meet people who know that. And I get the sense that it doesn't mean they can't do good governance, so to speak. But it does mean that they struggle to explain to other people what that means to them. And so maybe this is me being really cynical, but maybe you can help me and and listeners understand what you're learning from others who have a strong perspective what that is just so that because I've got I have a strong opinion where I think it is, which I can share. But I'm curious what you're learning so that the rest of us can learn from what you're picking up.
Chih-Ting Lo
Yeah, let me let me think how I can summarize that in a way that is not all over the place. So there's so many pieces of that in my observation and again, I'd love to hear your your thoughts on what is what does good governance look like if I'm your perspective. In my observation and what I'm learning having a good and trusting environment for the board of directors, as well as with the CEO, and therefore to the senior management team is a fundamental piece where you can start having good governance because you're trusting each other, you're in a safe environment you are you feel comfortable, and welcome and transparent to share what you like to share. And sometimes they may be hard conversations. So I think that's, that's number one. And number two is I've learned from the chairs, I've worked with that it is a critical role, that the chair needs to really be a leader for the board, and be that bridge between the board and the CEO. If that relationship is solid, and then managing the board is solid in terms of really getting the most out of the board members. And that's where we can have good governance, because, you know, it's one thing talking about diversity on how people look like on the board. But that's another thing to be able to draw all of their skill sets and strengths. And having an environment where people can ask the right questions. So I find that is really important. And thirdly, and this may be a bit controversial, I guess depends on where people are with their journey and thinking of what this good governance really is, is what the what is an engaged board member and what we offer? Including and in addition to governance. So where the where does that line drawn there, traditionally, there's a, there's a clear line between, you know, nose in, hands out, and that kind of phrases on where the directors should be. But depending on the culture of the board, and depending on the organization, and depending where the organization is going, looking at what is the best for the shareholders or the stakeholders. There may be different roles that the director can play. And I think good governance is recognizing your roles, making sure you exercise those responsibilities, but at the same time, maybe offering more advice than your typical governance, so that the organization is moving in the right direction. So that I find is a fine line, I'm still learning how to navigate that very well. But I do find that having that additional ability to offer only when it when needed, is a way to actually improve governance. So these are my maybe three things I've observed on what good governance look like in my experience. And I see that in, in several of my boards, where where bits and pieces or maybe sometimes all of those points. I hope that's helpful.
Matt
For what it's worth, I love every part of what you're saying for a lot of reasons. And it aligns really well. So I'll share my my current the current wording of my definition of good governance, and I'm trying to put it in one sentence. So it's it's both says a lot and not enough. So my current definition is good governance is intentionally cultivating effective conditions for making decisions. So if we take the first part of what you said, we want to be in a room where we've somehow created the conditions where we trust each other and feel like we can challenge each other without being attacked, for example. Well, there's a lot of conditions we can be intentional about to try to achieve that. And it's that intentionality, to me, that's the difference between good and not good. So there's a lot of organizations, for example, that I meet, where they just kind of go in the room, they've got an agenda, they work through the agenda, and they leave. And they haven't asked themselves at any point, "okay, well, we've got this critical decision we're about to make, what are some of the things that we can think about in advance of making that decision that will serve the decision?" Who should be in the room? What information do we need? How should we transmit that information? And when? What kind of conversation prompts would be like? How long should the presentations be? All this stuff. Should the lighting be bright or dark? I don't, you know, whatever it is, all these things matter. And to me, as long as you're being intentional about it, that's the difference between good and not good. So I'll stop for a second does that does it seem to connect with some of the things you're saying?
Chih-Ting Lo
Yeah, you just say it much, much more concisely and nicely, than my run on sentences
Matt
Well I've been thinking about it like crazy. So. So okay, so if we're in alignment, then I want to bring this back to and I'm going to share a theory this is half baked, I'm only coming up with it as we're talking so forgive me. But thinking of, thinking about some of the stuff that would get in the way of change on the young directors front or on the Equity Diversity and Inclusion in boardrooms generally. I think that this clarity or achieving or building some kind of clarity about what does it it mean to be great once you get in the room would help a lot. Because if we're thinking about a typical nominating committee that has nominated and elected however many dozens of directors collectively over the tenure of the board members who are there. They probably haven't thought too hard, or at least not too hard too frequently on, "Okay, well, what does it mean, not just to make sure that we're getting the right profile, but to make sure that when they get in the room, they're activated, or they have the right characteristics and curiosity to actually be amazing?" If we drew up the characteristics that differentiate a great director from someone who's not great. Suddenly, in my experience, we've got a person who looks like anybody, right? They, as long as they're curious, as long as they're hard working, as long as they are, you know, maybe some of them need to be detail oriented, maybe some of them need to be dreamers. But we certainly need people who are interested in including and incorporating the ideas of others and pushing decisions and exploring options and all that stuff. There's no demographic that is better at that than another. Young, old, it doesn't matter, right? So here's my theory, if we were more intentional about that, and then sort of stopped over indexing on the experience piece, which it matters, but not a lot. I bet things would change. And that has to be the directors that change, it has to be the potential directors who have a different understanding of what they're bringing to the table all this stuff. How does that sound?
Chih-Ting Lo
Yeah, I like I like it. But also, maybe, yes, maybe some of the board members could just be a generalist in terms of really being curious and being thoughtful, being, you know, all this good things, they can bring in and ask the right questions. But I do believe that we are in a world where things are complex. And it would be nice to have some directors on the board who do have subject matter expertise in different areas. And I think how that actually gets down to, to the actual composition has to depend on the company, right? Like where the company's going, like, what's your business? What's your strategic direction, what does future look like for the company? And therefore kind of skill sets you need? So I think it's going to be a combination of all those to direct you on what kind of directors you need and want on your organization. And I think as a subset of that should be, as you said, being being just the right person to do this, and a section and then the rest of them may have some subject matter expertise, or, or a certain experience that's really relevant to the future of that organization.
Matt
Yeah. So I think you and I are, I might have articulated myself poorly in some ways, because I think you and I are in 100% agreement. Because I, you know, of course, we need people in the room who like if we're running a nuclear reactor, we need some people in the room who can understand how a nuclear reactor works, just so that we feel confident that we've, you know, we're not going to make some big mistakes. I think part of what I'm saying is, if we had a slate of nuclear experts in front of us, and we were choosing just based on who has the most interesting looking experience, we might fail to bring a person in the room who is actually able to add value beyond just their experience on paper. Because they don't have some of those other less tangible characteristics, those personality traits that would get them in the room so that they're actually activated and activating others. So I think it's sort of a yes/and, right?
Chih-Ting Lo
Yeah, yeah, no, I agree. And I think I really like what you're saying around if you can have this message more broadly, it would also affect people who are who are looking to become directors to have a different way to demonstrate their value add, right? Then they don't want to pretend to be somebody else. But they can be themselves and be like, well, here are the things that makes me a good director.
Matt VO
At this point, I had taken up a lot of Chih-Ting's time and realized that we needed to wrap up our chat. I asked her if there was anything we hadn't talked about that she wanted to put out there and here's what she said.
Chih-Ting Lo
I'm really enjoying my board journey so far. I get frustrated that I don't see more people like myself on this journey. And I'm looking for opportunities to find ways to accelerate that and I don't know what that is. And I'm I'm looking to you on perhaps having some suggestions on know if I want to do more in this space on EDI and board directors, what are some of the things I can do to help with that?
Matt VO
So from Chih-Ting to you, a challenge. What do we do about this? Sure, on the one hand, we could just cop out and say, "well, of course, we all want more people like Chih-Ting on boards and in other leadership positions, but she's so amazing that I've never even met one person like her, let alone several." That might feel like a fair point, but let's inject a little more good faith into this. How did I meet Chih-Ting? She reached out to me after listening to a guest appearance I made on another podcast. Why is that relevant? Because it's a good example of how interesting people meet each other. Want to meet people like Chih-Ting? Try doing what either one of us did: put some interesting ideas out in the world in an article or podcast or whatever, and see if anyone reacts. Or if you find yourself consuming interesting ideas out in the world, don't hesitate for a second. Just reach out to the interesting person right away and introduce yourself. That's how community building happens. And soon enough, your community could be filled with amazing one of a kind people who could be the next leaders of your organization. Rant over. Thanks to Chih-Ting for being amazing. Thanks to you for listening. And don't forget to send me an email or voice memo with anything that's on your mind to soundup@groundupgovernance.com. Until next time.
Sound-Up Governance (ep.28) - Welcoming young directors into complex organizations (feat. Chih-Ting Lo)