Editor’s Note: In a first-of-its-kind exercise, CBM and AlixPartners partnered to identify the Top 20 Value-Creating Directors in America, using an approach that relies on total shareholder return (TSR) relative to peers for the companies these board members help guide. See the Full List >
For Maggie Wilderotter, effective board service means that “I eat my way around corporate America,” she says. “I make it a point in that first year on any new board to have a meal with every single other director, individually. And also with the CEO.”
That’s a lot of T&E, but such noshing, she says, is crucial. “It’s important to get to know people for who they are,” Wilderotter says. “Sharing meals is the best way. It’s not transactional; it’s equality. You’re equals at that table, and not in some role. People relax. I love to know what makes people tick.”
Wilderotter applies that same sort of intelligence-gathering and discussion-starting to board meetings per se. “In Dilbert cartoons, board members say, ‘That sounds stupid,’ but in our real conversations, it’s, ‘Why should we go in that direction?’ You want to get all opinions on the table and sort through them together. And I’m always conscious about who hasn’t said something. At DocuSign, as board chair, I’m a facilitator, not a dictator.”
When it comes to CEOs, she says, boards “must be very clear what the expectations are” at the same time that directors should expect CEOs to “provide the board with the truth of what’s going on in the company, not sugarcoat it.”
As chair, Wilderotter gets a regular consensus of independent directors about what issues they believe are important to the company and what strategic pivots might be considered, and reports it to management. CEOs “hate surprises,” she says, so effective boards let them know where they stand and what they should be doing differently.
But that isn’t always the answer. “Some CEOs, especially founders, are creators—they don’t like to run businesses at scale,” she says. “As a board member, you have to watch how long that CEO is still relevant to that seat and need to have a dialogue proactively with them about when is the right time to transition.”
Seasoned antennae help. Wilderotter enjoys her Costco seat because the company is so ruthlessly efficient and uses “simplicity as a competitive advantage,” so she has been on the retailer’s board since 2015, a tenure of typical length for her. “It’s at that point when it’s harder to be a truly ‘independent’ board member,” she says. “But I’ll never leave a company in a lurch; I’ll stay until it’s fixed.”
Expectations of corporate boards are rising, she says. “Boards used to be behind a curtain like the Wizard of Oz, turning all the knobs, not in public,” Wilderotter says. “But in the last five years, there’s a lot more transparency, driven by [shareholder] activism about how boards operate, and more accountability to stakeholders about how boards actually operate.”
Wilderotter stays on top of her game in part by attending a handful of board-refreshment academies each year and speaking at some of them. “You get to hear different perspectives from board members, compared with those who have been around for a while,” she says.
Wilderotter also contributes to the future of board membership by training would-be corporate directors “to take the mystery out of board service,” she says. She conducts boot camps for senior executive women and minority men and helps place them on their first boards.
“If you’re not versed in board service, it’s hard to get on, and if you don’t get on, you don’t know what to expect in the boardroom. By taking the mystery out of it, new board members get up to speed faster and participate faster.”
