Saurabh Gupta — President, HFS Research[00:21]
Hello everyone, welcome to today’s episode of HFS Unfiltered. My name is Saurabh. I’m the president for HFS Research and Advisory. And I have a very, very, very special guest today in Rita, who’s the CEO of Firstboard.io. I actually met Rita for the first time earlier this year at the World Economic Forum in Davos. And I’ve been quite taken aback by the mission that Rita is on, which is to place as many women on company boards as possible. So it’ll be a fantastic conversation. Rita, thank you for taking some time out to talk to us.
Rita Scroggin — Founder and CEO, Firstboard.io[01:09]
Thank you so much for the opportunity. And it was such a pleasure meeting you in Davos. And I’m excited that we’re talking now, right? Now that we’re not in Davos, but here. Well, thank you very much.
Saurabh Gupta — President, HFS Research[01:21]
So Rita, tell us a little bit more about Firstboard.io, your mission behind it, and how did you personally sort of got drawn into this mission?
Rita Scroggin — Founder and CEO, Firstboard.io[01:37]
Yeah. So Firstboard.io was founded in 2020, and our mission is to get more women technology leaders on company boards. And so my personal background is I come from executive search, and a lot of my clients have been amazing. But really, I haven’t seen very many women on those boards, and I figured we do need to change that because change starts from the top, right? And it’s also, I think, that companies need to reflect basically the communities and customers they serve. And therefore, I think it’s very important that more women technology leaders are going to be on private and public company boards. So we started with a group of 18 women technology leaders just a few years ago. Today, we are over 200 members, curated invite only. So this is not a membership model, right? It’s really about getting the right leaders into our community. And over 30% of our members have been appointed to one or more boards. And when we started, nobody had a board seat. So it proves the point that our members are board ready and certainly are of value to many different kind of companies. And I think right now, there’s actually an urgency for many, many companies to modernize their boards. And we talked a bit about that, right? And a lot of current board directors have been on boards for many years. They haven’t been an operator for who knows how long. And oftentimes they’re also very much overboarded, right? We see a lot of people, particularly in the U.S., who are on three, four, five, six, seven boards. So, and I think right now the pace of change is so fast that companies need to react faster. Boards need to react faster. So I think there’s really a need to modernize. And we’ll talk a little
Saurabh Gupta — President, HFS Research[03:40]
bit more about that, I think, in our conversation. Yeah, no, absolutely. We’ll talk about it. But Rita, I think that’s a fantastic mission. But at least I don’t think that the board diversity problem is a new problem. You know, it’s been there for so long. So why do you think it hasn’t been solved yet? You know, what’s holding us back?
Rita Scroggin — Founder and CEO, Firstboard.io[04:08]
I think one of the key reasons is that how board seats are filled, right? So oftentimes, I think they get filled through an existing network, which is kind of an insider network of board directors, CEOs, investors, and they go back to people who they already know. I’ve heard a lot about, you know, we don’t want somebody who’s being disruptive. At the same time, of course, there’s the call for new perspectives and new expertise. But I think that’s the biggest problem. And I think what has been happening historically is a lot of classes and certifications aimed at underrepresented groups. But I don’t really think that’s moving the needle. I think what we need to do is we need to crack the network and we need to build new networks. And that’s what we’re trying to do at Firstboard.io. So we are building an ecosystem of Firstboard.io members, of clients, supporters, sponsors, partner organizations, where I think we’re building this network and we’re building a platform for visibility. So I think the key issue is really kind of a network. And it’s not, you know, another certification or another class. And that’s, I think, how we historically have addressed the problem. And I would argue that a lot of individuals who are today on boards have probably never taken a class, especially in the startup community. It might be a little bit different, you know, if we look at public companies. And they have different reasons. Public companies are looking for different things than private companies. So we have to differentiate there too.
Saurabh Gupta — President, HFS Research[05:44]
Yeah, and you talked a little bit about it, but there is a dire need to modernize boards themselves. Is, if you look at AI, Rita, every company has AI ambitions, but very few have actually met those ambitions or realized those promises. And a lot of it is honestly a leadership gap, right? We are looking at AI as just, you know, let me throw AI at a problem and it will solve for everything, which is, I wish it was that simple. From your perspective, what sort of new capabilities should board members or companies demand from board members that you’re missing today?
Rita Scroggin — Founder and CEO, Firstboard.io[06:29]
It’s interesting that you mentioned that. We, during our summit in New York, we actually had the CRO from Nasdaq as our keynote speaker. And they just released a study. And this study actually identified that the biggest gap right now on boards, and I think they reached out to like 700 companies in that study, is actually the AI expertise and current operator expertise. I think that’s kind of the key issue because a lot of board directors today, they may have a general understanding of what AI is. They’ve heard about it. Maybe they’ve done a few things with it, but they don’t really understand kind of the opportunities, the risks, what can be done, how it can be integrated in the business model, or how it can basically reimagine or reinvent the entire business model. I saw Andreessen Horowitz came out with a perspective saying that every company should basically create a team of the most innovative people in the company where they’re looking at, okay, where are we today? Where could we go? And then bring in the leadership team to get on board with all of that. And they didn’t go so far to say the board needs to get involved, but I do think that it needs to happen too. I think the board needs to be working more closely with the leadership teams and really figuring out what does the next year look like? Not two years from now, not three years from now, because time is on nobody’s side, especially not right now, right? Every day, a new company, AI native company, gets founded, gets funded, and may actually disrupt current companies in a substantial way. And companies need to be prepared to move as fast as they can possibly can. And that means, you know, looking at the board composition and really figuring out who do we need on the board, who do we have on the board right now, and making some changes very, very quickly. And, you know, I’ve heard some conversations about, you know, basically existing board members need to learn what AI is, what it can do, but that all takes too long, right? So by the time they’ve come up to speed and maybe get to the point of asking the right questions, but they’re not at the forefront of what’s being built today. So we were just at UNX, which is a big AI conference in San Francisco. I was there, and a few of our members were there too, and we heard about all these companies, what they’re doing right now. I mean, just amazing, right? And actually, some of our companies who are sponsoring Firstboard.io, they were there and they were talking about their new solutions. So that is really the expertise which I think a lot of boards need to do right now. They need to reimagine, you know, the board composition, the business model in where they’re going to be going, you know, from now.
Saurabh Gupta — President, HFS Research[09:20]
Rita, is it fair to say that boards today are a little more conservative than they need to be? They need to be more aggressive. They need to be, you know, we are just most of the board conversations that at least I’ve had is always looking at what’s the short term, you know, how do I meet the numbers in the next quarter? And my expectation of the board is to give me a long-term vision. Is that a fair, accurate statement from your experience? Well, I mean, in the U.S., you know,
Rita Scroggin — Founder and CEO, Firstboard.io[09:53]
we have the short-term quarterly perspective, right? And every public company releases, you know, quarterly results. And that determines, you know, how their stock market, it’s not the only factor, but it’s one of the factors. And if they’re missing, you know, the guidance, it’s impacting their stock negatively. And you see a lot of pressure right now on Microsoft, right, which is doing, you know, very strategic investments in AI, but that’s not helping their stock price. And their stock price has gone down significantly. And that’s, I think, you know, sort of a pressure every company is facing. So I think it’s tricky for companies to say, hey, we need to show short-term results, but we also need to think long-term. And I don’t know where the balance is, but I think the board definitely needs to get involved in these conversations. And it’s probably not a really straightforward answer, and it depends on the company and how much they can do and how many reserves they have. I mean, Microsoft, as an example, right, they have a lot of reserves, so they can ride things out and they can be more strategic perhaps than other companies who don’t have so many cash reserves that they can, you know, go be more strategic in what they want to do. So I know I’ve heard from, you know, some CEOs, it’s all about the quarterly results, right? And other companies, I mean, there are companies like, you know, in Asia and Japan, and I would say probably some countries in Europe who have slightly different thinking and they’re not so driven on the quarterly results, but in the US we definitely are.
Saurabh Gupta — President, HFS Research[11:24]
Definitely are. We are quarterly, daily, hourly stock prices.
Rita Scroggin — Founder and CEO, Firstboard.io[11:31]
Minute by minute, right? Yeah.
Saurabh Gupta — President, HFS Research[11:33]
Minute by minute. So before I let you go, Rita, this has been a fascinating conversation. If let’s say I had the power to grant you one wish, what would be your one wish for the future of boardrooms across public and private companies?
Rita Scroggin — Founder and CEO, Firstboard.io[11:54]
It’s maybe a combination of wishes, but I think, number one, that boards have gender parity, right? That boards reflect the general population, not only one segment. I think that’s probably my number one wish. But also that boards are more nimble, that they include new voices, and that they include more current operators who might just be on one or two boards and not on all these other boards. So I think companies in general, I think, need to move faster and be more meaningful. For private companies to add an independent board director earlier, an independent board director who can help them scale, open up doors, and bring them in way earlier and not when they have to right before they go public. I think that’s a missed opportunity for a lot of companies that they’re adding an independent board director too late.
Saurabh Gupta — President, HFS Research[12:46]
Yeah. Rita, this is fascinating. I always learn something when I talk to you. So thank you again for taking some time out. And I know you’re coming to our May summit in New York as well. So I’m looking forward to that. But Rita, thanks a lot. Thanks for taking all the time today.
Rita Scroggin — Founder and CEO, Firstboard.io[13:06]
Thank you so much. And I look forward to see you in New York in just a few weeks.
