Tech expertise in the boardroom: AI, risk and the “governance concert”

Welcome to the Corporate Director Podcast, where we discuss the experiences and ideas behind what's working in corporate board governance in our digital tech-fueled world. Here, you'll discover new insights from corporate leaders and governance researchers with compelling stories about corporate governance, strategy, board culture, risk management, digital transformation, and more.

Dottie Schindlinger: Hi, everybody, and welcome back to the Corporate Director Podcast, the voice of modern governance. My name is Dottie Schindler, executive director of the Diligent Institute, and I'm joined once again by my fantabulous co-host, Megan Day, strategy leader here at Diligent. Megan, how are you doing today?

Meghan Day: Good, Dottie.

I feel like you and I haven't connected in forever, but, uh, you know, we're back, ready to go, and I think ready to talk about what we've talked about every episode so far this year on the Corporate Director Podcast, and that's... Drum roll,

Dottie Schindlinger: please. Let me guess. AI. Yeah. Yeah. I know. It's starting to feel like, can we talk about something else, please?

But, but no- No. Yeah ... there's never a shortage of things to talk about with AI. It's, it's a, you know, quickly moving, quickly evolving picture. All right, what's on your mind today, Megan? What AI story do you have for us?

Meghan Day: I wanna call a couple of things that I have read about in the last, uh, week or so. The first is coming out of KPMG and INSEAD, and they have just released new AI governance principles for boards, which is based on a survey that they ran, and their survey suggests that almost three-quarters of boards only have moderate or limited AI expertise.

And that's, you know, even as AI is transforming strategy, security, workforce. But at the same time, the conference board also just released a study that says AI risk disclosure in the S&P 500 has really exploded from 12% to 83% in just a couple of years. Right. I think makes a lot of sense, but when you peel back the onion, as we like to say, AI-specific expertise on boards is still under 3% of directors.

How does that feel to you, Dottie? What does that say to you about where boards really are on AI right now? I mean,

Dottie Schindlinger: not great if I'm being honest. I mean, Megan, like again, I, I feel like we've seen this movie before, right? Didn't we have these exact same conversations a few years ago around cyber- Yes ... and cybersecurity and saying, you know, "Hey, there's no cyber expertise on boards"?

And, you know, to some extent I think boards filled that gap a bit by bringing in more digitally savvy directors. And so I think technology expertise sort of as a general category has risen. In fact, I know in that conference board report, they do say that technology expertise grew from about 21% of directors to 51%, which is kind of interesting.

But to your point, very few of them are, are specifically AI experts. I don't find that so surprising. I think what is more surprising is that boards are not... How, how do I put this? Companies are not forcing their boards to increase their AI competency. That doesn't seem to be happening at the levels that I would've expected because when, when cyber really hit, hit the board agenda, suddenly every board was scrambling to figure out, "How do we get all of our board members up to speed and understanding what the risks are and being able to talk about these issues in a, in a really thoughtful way?"

And there was a lot of effort being put to getting outside experts into the boardroom to do training sessions and sending board members to education programs and conferences and, you know, having more conversation with CIOs and CISOs. And I don't necessarily see that same thing happening with AI right now.

What I am seeing is board members asking a lot of questions about AI strategy and sort of asking in this very general way, "How are we mitigating AI risk for our company?" But I don't see the same mad scramble that I did for cyber- Yeah ... in terms of getting everyone trained.

Meghan Day: You know, that's such, such an interesting observation, Dottie, and where my head goes immediately because we've talked about the parallels between this, the cyber rush and the AI rush in boardrooms, and it's because there's not anything, quote unquote, "bad" happening with AI in terms of reputation, in te- in terms of fines, in terms of, you know, customer, you know, damage, things like that, that we saw almost out of the gate, like go back to the Target breach that everyone holds up as this example.

But boards can't just say this is too technical for them. If AI is an enterprise risk, which it seems like if they're disclosing it, they still have to exercise oversight whether or not there's an expert in the room or not.

Dottie Schindlinger: Well, that's a really, really interesting point you just made, Megan, because I, what I would say is two things.

One, I would say there have been some very well-publicized scandals, but they've mostly been at AI startups.

Meghan Day: Mm.

Dottie Schindlinger: They've, they've mostly been at AI-native companies that deployed specifically chatbot technology that went rogue And gave terrible advice to some very vulnerable people- Sure ... and that's terrible.

Or, you know, um, there, there was a pretty famous, uh, incident in the state of Tennessee where they used, um, AI technology to help make decisions around Medicaid payments, and it pretty much, like, stopped giving payments to a whole bunch of people that were absolutely eligible and, you know, that had very, very bad consequences for some people.

So there's those kinds of incidents that you've seen. But to your point, it's not, like, happening to a big Fortune 100 company that has deployed some AI tech and it's gone rogue and created major brand damage.

Speaker 4: Mm-hmm. Yet.

Dottie Schindlinger: Yet. I would literally just put the word "yet" at everything that y- at the end of everything you said because it's...

Come on. You, you know it's going to happen because we're seeing if you're not spending all this time and energy to get everybody up to speed and competent and making good decisions and being fully educated, then what kind of job are they really gonna be able to do to ensure that there's a level of trustworthiness to the AI tech that's being deployed?

And we know it's like an AI gold rush right now. Everybody's scrambling to try to get their hands on better AI tech, you know, get more usage of AI in their companies. What could go wrong? It's so funny, Megan. I saw this cartoon. I've I've been sharing this with a couple people. I wish I could find it again.

It flashed up on my screen one day when I... I think I was on some social network. I don't remember which one. But I was looking at things, and there was this great cartoon, and it had this group of CEOs, and they were all shouting, "We want more AI!" And on the other side of the screen was a, you know, IT director who was saying, "To do what?"

And the CEOs were saying, "We're not sure." And honestly, it was just such a great meme because it felt so true- Yes ... to this moment, where everybody's in this mad dash to get AI tech a- and no one's really clear to do what. What exactly is gonna change? We all know it's gonna have profound change. It's gonna be big change.

There's big risk. But it just feels like a mad scramble, and we're not sure where the destination is.

Meghan Day: Very- I don't know, Megan ... very interesting. And that probably... You're, you're right. This correlates exactly to why maybe boards still haven't quite figured out the education piece of things. And also, it brings up the, like, ti- tale as old as time, like, single skill director conversation as well.

Like, does this get fixed by adding a designated AI expert to the board? I mean, we've talked about this in every subject imaginable. Yep. Probably

Dottie Schindlinger: not. Well, listen, Megan, this is probably a really good segue to the interview that I had the chance to do for, for today's episode with Roosevelt Giles, who's a board member on a bunch of different boards.

Um, he serves on the board of Just Capital. He's on the board of GHI Healthcare. He's a board member and advisor to a whole raft of startup companies, including a lot of AI companies. Um, and you know- He, he also interestingly is one of these tech directors who literally wrote the textbook on cybersecurity.

Like, it's a textbook that's used by most universities. It's in, I don't know what edition these days. It's this massive tome. He showed it to me when we were on the, on the podcast interview. But it's really interesting to talk to him about this issue of how can boards do a good job overseeing some of these, some of these areas.

So let's give that a listen, and then we, we'll come back and talk about what we heard.

Joining us on the Corporate Director podcast today is Roosevelt Giles, board member at Just Capital and GHI Healthcare. He also serves as a board member and advisor to several startup companies. Roosevelt, thank you for joining us on the show.

Roosevelt Giles: Oh, thank you for having me.

Dottie Schindlinger: Well, let's start off by having you give a little bit more of an introduction about yourself beyond the handful of titles that I just rattled off.

Tell us a bit more about your career background and some of your current work.

Roosevelt Giles: I started off as a, uh, programmer on IBM mainframes, okay? So really, really, really, really dated. And, uh, Symbol language and, uh, PO1C, COBOL, uh, Fortran programming in. And, um, and it was quite, quite interesting in the fact that the company that I worked for, I was programming the financial systems, and the owner of the company took a liking to me for some reason, and I was introduced to the board governance at the age of 24 years old.

He allowed me to sit in the board meetings on a $5 billion company, privately held company. And so, and in doing that, that helped also start me down this road, this journey of understanding how boards work, and that boards is at the epicenter on capital allocation, and so that really, really intrigued me.

And from there, I went from, uh, Milliken to, um, uh, AT&T. And so at AT&T I w- was heavy into programming and networks and building large networks out and getting into securing those networks. And also, I got a, uh... AT&T had this program with MIT where they would loan engineers out to MIT, so I was loaned out to MIT to assist them in teaching computer science.

And from then I left AT&T and then started my own firm. And my own firm, I was, my firm was around, uh, protocols and getting different systems to communicate with each other and building out networks and software. And from there, I, um, uh, was headquartered here in the US, and I put, established a beachhead in Malaysia, and the beachhead in Malaysia branched me out to South Africa, China, India, Heidelberg, Germany- And we also worked alongside the Department of Defense, so I had a secret cr- uh, clearance, and also with the, one of the largest oil companies in Southeast Asia, Petronas Oil, and other, uh, commercial accounts.

So been quite a ride.

Dottie Schindlinger: Well, I, I think it's really great to have a chance to talk to you because you bring really deep information technology experience and programming experience, really you're, you're a technologist at heart, into the boardroom, and I'd love to have you talk a little bit about what deploying that expertise in the boardroom looks like in action.

You know, we, we've got a lot of boards now kind of looking for technologists, especially in this age of AI. So what does that look like for you in practice?

Roosevelt Giles: Well, number, number one is that when you look at the day, the value of companies is all intangibles, and every CEO is a technology CEO, is what it is.

And so what I have done in going on boards is that I bring them along with me, okay, because I look at patterns. I look at pattern recognition, okay, as to how the dynamics of the board works and how management interface with the board. And, and in so doing, what I've, what I've came up with, with my technical background, is there are two types of skill sets on the board, diagnostic and treatment skills.

All right? And when you look at from the board side of the house, the board operates on diagnostic skills. The management team operates on treatment skills. We've got this breach. We have this third party to assist us with it. It was audited by A, B, and C, and the board asks these type questions, and these are the two questions that I have helped train many boards on now.

Why, and how do you know? Those are two questions that the management team gets very, very nervous about. Right? Because the why, that's the surface. That's the sur-surface assumption of what the management conclusion happens to be, all right? It's what it is. And how do you know, oh, what third parties have you engaged?

Who else has validated this, okay? That brought that assumption and this conclusion to the board. And so, and those two words cuts across any situation in the boardroom, whether it's financial, whether it's risk, is it, is it human capital, everything. Why, and how do you know?

Dottie Schindlinger: So you've actually partially answered the question I wanna ask you next, but I'm gonna ask it anyway because, you know, so many board members really don't have a technology background.

Right. Um, and so translating really complex technology, cybersecurity, AI issues to the board without losing nuance really takes a certain set of skills. And I think, you know, the two questions you just mentioned, right, the why and how do you know, that's a good way to get there. But how do you make sure that the board understands the context and the nuance that they need to know to make good decisions if they don't have it in their DNA the way that you do?

Roosevelt Giles: They really know, okay? And what I do is that everybody is familiar with a, a smartphone, right? And that pho- smartphone has an operating system, going Android, you know, Apple, uh, iOS, et cetera. So, so what I do is that I draw a circle, and in that circle I put operating system, which everybody's familiar with, but I go a little step further.

I put DOS, the data operating system, because now we're operating on that, a data operating system in this current environment, and that will be going forward as well. And everybody knows about APIs. Everybody knows about the App Store and downloading apps on, on these devices. And so, um, again, I break out from the governance operating system out into risks, into crisis management, out to audit, off to compensation, out to technology.

All of those interface the, with these governance interfaces within that operating system, within that... Because data is the nucleus of everything, especially first-party data is what that happens to be. And by associating that with the everyday use of a mobile phone, it clicks. Very simplistic, but it clicks.

That they can-- To do that, they can, they can map that association is what I find. I

Dottie Schindlinger: think that's a really good analogy. Well, one of the things you didn't mention in your intro, which I hope you don't mind if I out you is that you also are involved in a really cool organization called Global Data Innovation- Right

which is run by a friend of both of ours, Dominique Shelton-Leipzig. Right. And what that organization is really, I think, trying to do is help boards get their arms around AI governance, which is, is the hottest topic out there. I mean, let's just face it, it's the thing everybody's talking about, and really nobody feels like an expert in it.

So I wanna ask from your perspective, what does a technology-literate board actually look like? You know, what's sort of the minimum level of understanding that every director needs to have? And I, I would say especially around AI, since that's the hot technology topic du jour.

Roosevelt Giles: You know, you know, one of the things they have to have is that, number one, they have to use these pro- these, uh, products Okay?

That is table stakes. They have got to take the time and get involved and understand how these products work. All right? Without that, I mean, it, it's just a total waste of time. And by having that, that experience in working with these models, now you start to see where you might have some outages, is what you start to see.

And you can only get that from a front row seat, all right, is what happens. Because the old saying goes, you can't govern what you do not understand. And when you look at AI, that is a systemic risk for the organization. And what that also leads to is legal liability, because the plaintiff lawyers are all snooping around on the cyber side.

We already know that. Lots and lots of case law and things around that. And so now they're doing it on the AI side of the house. And so they're snooping around to see exactly what's occurring and who on that board should have known this. If you've got a model out there that hallucinating deep fakes and all of these types of things, and now you've got this derivative action that, that hits, plaintiff lawyer gonna say, "Well, who?

What board member on what should have known about this?" And, and one of the things about courts, reviewing courts, is that courts don't care about your software or which model that it is, ChatGPT, Claude, Complexity, care less. Courts only concerned about process and structure. And so having the right process and structure in place, that is the job of every board member and also the management team.

Dottie Schindlinger: And I feel like the questions you laid out, why and how do you know, might be two of the hardest ones to answer when it comes to AI. Do you agree with that?

Roosevelt Giles: Yeah. Yeah. Yeah, exactly. Yeah, so hard. Because, because you have to, because you have to think. You know? You have to s- You have... Y- you can't just, just come up with an answer, all right?

And, and, and Dottie, this is the other thing that, that dovetails on, on top of it. A lot of board meetings that I've been involved with and consulted with, they have what I, they do what I call governance concerts.

Dottie Schindlinger: Tell me about a governance concert. I was like, you don't quite know it. I think I know what it is.

A

Roosevelt Giles: governance concert. All right? You have the, you have the management team that come in and, and, uh, present to the board, and they run out the clock. All right? They run out the clock, and so there's very little time left for the board members to ask questions. So boards in no siri- no, in no scenario, they're not governing, they're ratifying.

Speaker 4: That's right. All right?

Roosevelt Giles: It's what they're doing. And so Therefore, when you take a step back and, and you, and you take a look at this, this is where companies get in trouble. This is where the shareholder activists come knocking on the door because they are very active, extremely active. You also have the institutional investors and the proxy advisors also.

Okay? And so it, it's, it's, um, it's interesting, but one of the things that the chair of the boards have to do is to make sure they make time for why and how do you know? That is very, very important. And then it's across any of the committees, any of the technologies, any of the oversight and risks that the company has to address in that organization.

Dottie Schindlinger: I love that idea of the governance concert. I may, I may steal that, Roswell. I'll give you, I'll give you full credit every time I say it, but I think it's, it's such a great description.

Roosevelt Giles: You- but think about it for a second. If you attending a concert, you can't raise your hand to the performer. That's right.

"Hello, I have a question." Yeah, no, you can't do that.

Dottie Schindlinger: It's a really, really apt description. Um, I wanna ask you a question because one of the observations-- I've, I've been working lately with a lot of CIOs who are looking for board seats and, you know, former technologists who are now serving on boards, and one of the things I hear a lot is that in the confines of the board meeting, a technical issue comes up for discussion, and every head around the table whips around to look at the one technologist sitting at the table.

So Roswell, I wanna ask you, where do you find your technology expertise being the most critical versus where do they ask you to provide your expertise? I, I'd love to hear you sorta answer both of those questions.

Roosevelt Giles: There's a couple of things. You know, especially when you're looking at a M&A en-environment is where those skill sets come into play on the, uh, on the technology side and also again from, you know, the AI deployments and things there where, where, where it comes into play.

But the other piece here is that, and I'll de-digress for a second, not too long ago, boards did not have to have a financial expert on the board. And we know what happened. All the regulation, Sarbanes-Oxley, Sox, all that stuff came, you know, behind that. And when you look at today, I have been talking about to boards, I feel like we're entering into an era that we might have Enron 2.0 because a lot of traditional boards do not want to increase the board size.

They do not want to bring in a specialized skill set- Because technology is viewed as a specialized skill set, just like financial skill sets were viewed as a specialized skill set, okay, pre-E- Enron. So that really bothers me. Mm-hmm. And because the, all the companies today are technology companies, you have to have and start to integrate bringing in these skill sets that can complement the financial skill sets and strategy skill sets and things that you, uh, have today.

There just, there just no, there just no way of getting around that.

Dottie Schindlinger: That's such a good point, Roosevelt, and, and I'm just sitting here reflecting as you're speaking that I, I agree with you. There definitely was a time when boards would look for people with specific financial expertise as a specialized skill set, and now I feel like financial literacy is just table stakes.

Like, if you're not... Right. So how long do you think it'll take before we get there with technology? Because I agree with you. I, I mean, we're, we're deep into the technology revolution. Every company's a technology company, so when will the, when will every board be a technology board?

Roosevelt Giles: Well, we're starting to, we're starting to see it now, okay?

Uh, and you know what else is, well, oppos- opposing forces. What also pushing it is the plaintiff bar. The plaintiff bar and the index funds are pushing it, and shareholder activists. So they're forcing the traditional board members to open up, to diversify the skill sets on the boards. Because when they come a-knocking, they already know who's the wor- who is the weakest link in governance.

They already know that, okay? They have melted down their Bloomberg terminals. They know exactly who that happens to be. So companies now have to accelerate getting these skill sets on the board. And, and guess what? Some of the boards that I'm working with, I was able to convince them to open up two advisory board slots on their board with the skill sets that they do not have now, technology being one of those, for a two-year rotation where they do not vote.

They get assigned to the respective committee, i.e., technology committee, and they attend all the board meetings. And now that allows companies to start to bring in those skill sets that they need without increasing the size of the board and not having to ding an 8-K, and now you got to put up another slate for another board member.

Now you can try before you buy. And those individuals can now help train- Those finance strategy board members that are sitting on the boards today. And by using this two-year rotation, now you have built-in succession planning. What a novel idea. You know, it's what, it's what you have. And, and so by having that two-year rotation, now you have this fresh set of, of thought leaders coming into your organization and helping you to stay ahead of the other folks out there.

It's what you have to do. Because also, not only are you a technology company, you are Google, you are Meta, okay? You are ChatGPT. Every company is that. That's how they have to think these days. And the other piece on gaining the necessary talent, not only on the board, but throughout the organization. These companies are not giving $100 million and $300 million bonuses for nothing.

To attract talent, right?

Dottie Schindlinger: So I wanna go deeper on that final point there, because I think that's important, right? Thinking about the, the effective oversight of technology, cyber risk, AI at the board level, I think has to really be a, a partnership effort, right? Between the board, the CIO, CTO, the CISO. You know, and, and as I think about what you're saying, you know, I love the idea, by the way, of having advisors come in, sort of the try before you buy model.

But how should that relationship between the board and the technology staff look? You know, if I th- y- you're, you're bringing up the point of thinking about hiring, right? And often the board is really just focused on the, the top executive, but they might need to look a little bit further down the organization.

So how should that partnership really work well, and what questions should directors be asking that staff when they come in and meet with the board? You know, how should that relationship work?

Roosevelt Giles: Something that I have been advocating for years and years and years, and it's starting to slowly trickle. That is a technology committee on the board.

Yeah. A technology committee on the board that is not sitting in the audit committee. The audit committee is already oversubscribed, okay? And on this committee, what you need is that you need-- And it should not be run by technology, by the way. The technology committee should not be run by, the chair should not be a technology person.

The chair should be a business person, okay? A business specialist. And now you bring in, you have the business person there. Now you've got the technology person there. Now you bring in all the other constituents that you bringing, that you bring to the fold. And so now they have their committee that is now formed, and now they're able to take that knowledge that they're gaining in that committee now and help bring the other board members along with it.

It is too complex today. The stakes are very high. Extremely high today. And you just can't keep bolting on everything in the audit committee. And guess what? That can be a breach of Caremark.

Dottie Schindlinger: Yeah. That

Roosevelt Giles: can be a breach of Caremark is what that can be by putting in the audit because you don't have the skill sets.

That's really interesting. And again, that's where shareholder activists is gonna lean in on, and that's where the institution investors are gonna lean in on, on, on that. So boards that are putting up, you know, AI and cyber in audit committees, it's just a matter of time before they get a piece of paper.

And, and the one, the one thing you do not wanna have happen, you don't wanna have that derivative action filed, well, prior to it being filing, that they ask for a, uh, documents and records request. Okay? And my uncle, GBA, he never wanted to go to the doctor because if I go they're gonna find something. So I'm, so I'm not going.

Companies don't want to share their records with a plaintiff lawyer 'cause they are gonna do what? Find something.

Dottie Schindlinger: Yeah.

Roosevelt Giles: You don't, you wanna stay away from that. And that's why having, educating the board members on technology and h- and how a reviewing court will view our decisions because if you're not on record and these things that we speak to and debate is not in the minutes, it never happened.

It just never happened to a reviewing court, and that's where a lot of companies are exposed right now. Lots of exposure there because they're not taking this information and translating that into the minutes with experts that will be trusted if the plaintiff does get to the pleading stage.

Dottie Schindlinger: So I'm curious to know your thoughts about something because I, you know, uh, right now every board is trying to grapple with how do we govern AI, how do we think about this?

Do you feel that the rise of, you know, especially generative AI, has changed the kind of technology expertise that's most valuable in the boardroom? Or is it just, you know, more of the same? And w- what is your thought there?

Roosevelt Giles: Well, that's just another layer, right? You know? It, it's, it's what it is. And right now we en- went through the prompting era, right?

The prompt, prompt, prompt, prompt, prompt. Now we, we're shifting into action, and that's where a lot of risk can happen. I mean, a significant amount. That also puts cyber on ins- on steroids,

Speaker 4: okay? Mm-hmm.

Roosevelt Giles: It's what happened for the, for the bad actors in what they can do. So it's incumbent then for the person or persons, that is the technologists on the board, to educate the other board members.

And the board members are gonna have to educate themselves by going to training, something that's a lot of them do not like doing, okay? Because I was a CEO and for XYZ and, you know, I don't, I don't need to go to any training. I know exactly what I'm doing. That is not the case. But by doing that, by not doing it, again, you're putting the company at risk.

And because, again, the value of the company is what? Intangible assets. So now, if this doesn't cause an emergency, nothing will. Because right now, the CIOs, the CISOs, the chief technology officers, the, and the AI officers, they are the first line of defense in protecting the value of the company.

Dottie Schindlinger: Such a good point.

Roosevelt Giles: The value of the company, and I don't think that non-technology people understand that. They're the gatekeepers. They're the ones that helping keep that stock price up because something happens, we know in a millisecond the value of that company can drop 20 or 30%, is what can happen. Those are the stakes that we're dealing with here, and that's why we have to get companies to get out of their mind this s- specialized skill set.

They speak that, that zero and one stuff, and we don't want them around us, okay? It's what we do not want. So, so now we have to, um... And again, I'm seeing it. It is happening, and that's why I love the advisory board initiative that companies are doing now, and I'm talking with BlackRock a- about it as well.

And so again, you can get these, uh, people in now, and it's not a fiduciary. They're not voting, okay? So why not? You give them a blank, a blank sheet of paper and ask why not, fill in the blank, and it'll still be blank.

Dottie Schindlinger: Roswell, you've given us so many really great practical tips and insights, um, but I'm greedy.

Do you have any final that you wanna offer the audience before we shift gears?

Roosevelt Giles: No, I think that, um, you know, I, I love, I love technology and, and, um, and I'm glad to see that technology is getting its, getting its, uh, its place. Uh, it's a long time coming. And I'm fearful that if we do not get our house in order, that we will fall behind, and that will be a detriment, is what, is what that would be.

Uh, we have the smarts. We have the smarts to do these things, is, is what we have. And, um- And I'm, I'm out here working diligently to, uh, help boards see that you need these skill- you need these skill sets. And, and the other part, you've got a lot of board members gonna be retiring soon, within the next couple of year.

That's gonna be a huge turnover, and that's why the advisory board initiative was so... It, it just fit like a glove, all right? Because now you can take the, the board members that are sitting on the board that's gonna be rolling off, they can flip over to an advisory role and now be the mentor to the newbie.

So you still capture that, that institutional knowledge is still there, all right? It's what you have. But now you got a fiduciary that is now also have those, uh, have those skill sets.

Dottie Schindlinger: Well, before we let you go, there are three questions that we like to ask every guest that joins us on the show. So the first question is, what do you think will be the biggest difference between boardrooms today and 10 years from now?

Roosevelt Giles: Uh, the tech- tech will be, will be the chair of, uh, at least half of the committees. Tech skill sets.

Dottie Schindlinger: Love that. And what was the last thing that you read or watched or listened to that made you think about governance in a new light?

Roosevelt Giles: It's, it's interesting, you might not look at it as a governance book, but, uh, a book called Rethinking Success by, uh, Douglas Holiday.

And what it dovetails into is that we all live in someone else's story and not our own, and that shows up in everything that we do. It also shows up in leaders who shows no s- no empathy because they didn't have empathy as a child, and it shows up. The other thing that it does is that it, it, it teaches you how to give others, okay, permission to tell their story.

And I'll give, and I'll give you this one. I had a, um, a board member, guy was just, I mean, just so anal and, and, and , and just, just really, really, really tough. Gave everybody a hard time. And, and so, and in doing that, I had a one-on-one with him. I gave him... Tell, I told him my story, and I do this with every board that I'm affiliated with.

And then he confided in me that his son had committed suicide.

Speaker 4: Hmm. And

Roosevelt Giles: his wife had blamed him, and that's why... That be- that pain resonated in the boardroom. And when we did an offsite I kicked it off with us doing-- telling each one of our stories. And Dottie, at the end of a couple hours, there was water running down everyone's cheeks.

And think about what that did for the, for the, for the, uh, camaraderie, the bonding, the trust. It was off the freaking charts. It allows us to deal with some very deep issues within the company because we knew everybody has everybody else's interests at heart. And I've been doing that now for the last 10 years, and it works.

Dottie Schindlinger: That is such a powerful idea. Thank you for that suggestion.

Roosevelt Giles: That's a great book.

Dottie Schindlinger: Yeah. That's great. "Rethinking Success," you said?

Roosevelt Giles: Yes. Douglas Hall. We will definitely

Dottie Schindlinger: put a- Yes ... we'll put a link to that on the podcast page. And Roosevelt, before I let you go, what is your current passion project?

Roosevelt Giles: Oh, my passion project.

Oh, my, um, I run a nonprofit, is my, um, my side gig. And what we do is that we have a four-and-a-half month board readiness program. Uh, we-- at the beginning of the cohort, we assign them, uh, a publicly listed company. They have 17 case studies to complete on that publicly traded company. And, um, at the end of the program of 46 teaching modules, they have to complete a final SWOT analysis, and it have to be defended, just like a dissertation.

You have to defend your dissertation, right? So they have to defend that SWOT analysis to a team of three experts, sitting board members and, and CEOs. And now what we're doing, we're taking that, that report, and now we're gonna give it-- we're gonna forward it to the company. And the company had no idea it's coming.

Absolutely no idea. None whatsoever. And we have one company right now on our last cohort, we graduated in December, uh, we did a shareholder activist campaign, and, uh, we're meeting Friday, and we're going, and I'm going to deliver the report to the company, is what I'm going to do. And so it's having-- doing this program allows us to be able to build that next generation of board leaders.

Technology skill sets, financial skill sets, supply chain skill sets, legal s-supp-- uh, sets, private equity, et cetera, et cetera, et cetera. And so it's, it's very rewarding. I started it four and a half years ago, and I've got 37 people on boards now. And, uh, a couple of them are, uh, in-interviewing this week.

And, and it's just so gratifying of doing this.

Dottie Schindlinger: Roosevelt, did you say the name of the organization?

Roosevelt Giles: Yes, Stakeholder Impact Foundation

Dottie Schindlinger: Stakeholder Impact Foundation. I love it Yes. Thank you so much for sharing that. Well, Roosevelt, I'm so glad that you joined us on the show. Thank you so much for being our guest.

Roosevelt Giles: Oh, no, thank you for having me, you know? You know. I hope people can pick up a couple items out of it.

Dottie Schindlinger: I, I'm certain that they will. We've been joined today by Roosevelt Giles, board member at Just Capital, GHI Healthcare, and he's a board member and advisor to several startup organizations. Roosevelt, thank you so much for being our guest.

Roosevelt Giles: Thank you. Take care.

Meghan Day: All right, Dottie, I might have a top contender for favorite interview so far this year. So many little tidbits that I wrote down. I mean, the tough questions, why and how do you know? I mean, just that framing alone, I think is so helpful to just keep in the back of your head as a board member.

Dottie Schindlinger: Well, and, and totally agreed, and relevant to the conversation we were having- Yes

before we listened to the interview, you know, that's a question for board members to ask themselves, too, when it comes to AI investment and AI strategy. You know, they, they should be asking their companies these questions, but they might wanna also ask themselves, "How do we know?" You know, "How do we know this is the right bet?

How do we know that it's safe and secure? How do we know that this technology is being monitored continuously?" Those are really powerful questions to ask. The answers might not be-

Meghan Day: No ...

Dottie Schindlinger: readily available or forthcoming and m- might require some work on someone's part to answer, and it's worth doing that work.

Meghan Day: Yeah. You know, the other thing that's, that stuck with me is the idea of leveraging an advisory board for some of these things. Uh, the, the try before you buy slots. I mean, I think that might be difficult for some organizations to actually work around with their current governance structure, but I do think it is, again, something to think about if you feel like there might be gaps within your organization to just try and bring in some, you know, relatively short-term expertise.

Dottie Schindlinger: I think that's such great advice, Megan. 'Cause you're right, you know, you can't, you cannot just keep adding people to the board. And in fact, um, you know, there, there may be an argument to be made for boards to get a little bit smaller- Hmm ... right now because they're having to meet so much for- Yeah ... more frequently.

There's so much going on. The world is so topsy-turvy. Uh, every director I talk to is saying, "Yeah, we, we have more board calls than I have ever had, ever." Um, and he's- Yeah ... you know, one of them I was talking to, I said, "How does it compare to during the pandemic?" And they said, "Oh, this is way busier." Hmm. So I think during this cycle where things are really shifting quickly, having fewer board members might be an advantage.

That said, you're not necessarily gonna have all the expertise you need if you have a smaller board. And so having an advisory board, you know, a specific dedicated technology advisory board makes all the sense- Yeah ... in the world. You know, and, and then those individuals can come together maybe even just virtually a handful of times a year and answer specific questions.

Almost serve like a little committee just to give you, you know, context and perspective, and they can be currently operating professionals because you're not asking for a ton of their time. You're asking for just a little bit of their time.

Meghan Day: Yeah.

Dottie Schindlinger: And I, I think it's a brilliant idea.

Meghan Day: Yeah. I mean, I come back to this is, uh, we're in the age of so much disruption.

That means from a governance perspective, why do we need to keep doing things the way that we have been doing before?

Dottie Schindlinger: Agreed. Well, Megan, that's a good segue to one of these days you and I are gonna have a long conversation about the future of corporate governance, and I'm, I'm excited to think about what we talk about there.

Like- Well, let's do that over the,

Meghan Day: over the summer maybe with some cocktails involved. We'll bring- I, that sounds great ... we'll bring the, the recording studio with us.

Dottie Schindlinger: Sounds amazing. Well, that wraps up another episode of the Corporate Director Podcast, the Voice of Modern Governance. Like to say a few special thank yous, first and foremost to our brilliant director, Roosevelt Giles, podcast producers Kira Ciccarelli, Steve Clayton, and our newest podcast producer, Terry Teary.

Thank you to the sponsors of this show, including KPMG, Wilson Sonsini, and Meridian Compensation Partners, and most especially thank you to Diligent for continuing to sponsor this show. If you like our show, please be sure to give us a rating on your podcast player of choice. You can also listen to our episodes and see more from Diligent Institute by going to diligent.com/resources.

If you also serve on a nonprofit or public sector board, then tune into our sister Diligent podcast, Leading with Purpose, for expert conversations on governance, risk, and compliance that makes an impact for mission-driven organizations. Thank you so much for listening.

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