 From theCUBE Studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. Hey, welcome back, everybody. Jeff Frick here with theCUBE. We're in our Palo Alto studios today, having ongoing conversations about diversity and really adding more women and also people of color into the corporate environment. And we're really excited to have somebody who's an expert in the field joining us for the first time from the East Coast. She's Beth Stewart, founder and CEO of TrueStar. Before we get going, tell us a little bit about TrueStar and what you guys are all about. Well, we're a search firm and we specialize at the board level, so we don't do executive search and we further focus on female candidates. And much more recently, we are, I wouldn't want to say we never focused on racial diversity, but let's just say it's getting a lot more attention than that would include men and women. Right, right, so that makes a lot of sense. And specifically, what's different about running a search firm that's focused on board members in a search firm that's focused on traditional kind of leadership roles, CEO or other senior executives? Well, there are a couple of things. First of all, one of the criteria to be a partner at TrueStar is that you have to have been a board member yourself. And I don't think at other search firms that do the board work as part of their overall practice, that that's as important. That's not to say some partners at other firms aren't board members, but it's not as consistent as it is at TrueStar. So one, we feel like we really understand what our clients' issues are. A second thing that differentiates us is that we spend really all day every day thinking about and sourcing and meeting with and getting referrals from people about diversity candidates. So I think other firms are focused on people that they can place into leadership positions which aren't necessarily people who are or have been or could be a board member. And going back to that focus on having been in the boardroom, we have a pretty good sense of who's right and who isn't maybe quite ready or never will be ready to go on a board. So I wonder if you could just pull the curtain back a little bit for us, because everyone has worked for a manager or been a manager and had some level of exposure to kind of the senior management in their companies or CEOs, we see them speak at keynotes. That's very different than what happens in the board. So when you talk about the candidates and you just mentioned, some people may never be ready for a board position. What are the kind of candidate attributes that you look for that you know is somebody that's good for a corporate board? Well, so first it has to start with the skill set that the company has requested based on their analysis and sometimes we help with this, but their analysis of where there is a gap in the skills on the board. And there are a lot of different people that might fit that skill. Let's just take the audit chair because it's such an obvious one. There are many, many people who can chair an audit committee, but what we also are gonna look for is somebody who you'd like to have dinner with or lunch with. Now I realize when we're in COVID times, everybody's not doing that, but assuming things return to some level of normalcy, you wanna have people who are personable, who are easy to get along with, who aren't gonna talk too much, who aren't gonna talk over each other, and who are skilled at the top of their game, if you will, so for people who might be audit chairs, we're looking for either a CFO or a retired audit partner. And in that case, we might be looking for audit partners who have had leadership positions in their firms. That's just an indication of their sort of level of outstandingness. And when you look for a CFO, you might say, is this a CFO who came up through an investment banking or a treasurer background, or is it a CFO who came up through an accounting background? I mean, all these depend on the situation, but those are the kinds of considerations for us. Right, and one of the things that came up in doing a little research for this interview is you talked about crafting modern dynamic boards. And I think probably a lot of people's perceptions that boards just don't turn over that often. And I think even you've said in some of your literature, that the problem's not really a supply side problem, it's a demand side problem. So I wonder if you can share some insight as to kind of what is happening with boards in terms of turnovers and making seats available for new people, whether that be women or a woman of color, or whomever. And is that changing over time? Are you seeing a dynamic start to change where you're starting to get more fresh blood into corporate boards? Where before that was probably a pretty glacial-paced activity, I would imagine. I wouldn't want you to think that we're, that anybody's sprinting at this point. We haven't gone from glacial to sprints. But change has happened. And so you talked about a dynamic boardroom. If you can imagine the number of people that are on corporate boards that haven't worked since before the iPhone or before the trade wars with China and other places or before hashtag me too, or before COVID or before dealing with millennials in the workplace. So there are a lot of people that fall in that category that do offer wisdom and stability on a board. But it's really, I believe, incumbent on them to get that sort of new perspectives and literally new information and skills and have it be a better blend. And you can't do that unless you do create openings. You can always increase the size of the board, but you can't do that unless you take the difficult step of asking some of the longer-tenured and older board members to retire. Now, having said that, it's not just an agist thing. There are often board members that, for instance, on a pre-IPO company who are venture capitalists. And the venture capitalists may not actually know the issues of a public board. They know the issues of smaller companies and growing in a private market. And sometimes you get somebody who's in the middle of their career who doesn't have the time to spend because they are in a full-time role. So really what it comes down to is someone appropriately managing the boardroom by saying who's really got the skills and the time and the personality that we need. And what I find most interesting, Jeff, is you can speak to anybody on a board and they know who it is that shouldn't be there anymore. It's not, it doesn't require a whole process and bringing in outsiders and doing exhaustive studies. Everybody knows who it is. It's just whether there's somebody who's willing to have those difficult conversations. So it's interesting because you say someone willing to have those difficult conversations which would imply that there's not kind of a systematic way to make sure that things are refreshed, to make sure that there's some turnover, to make sure that maybe institutionally, everybody knows that there's going to be turns if it's really kind of a one-off conversation every time. And I think, again, doing some research that you talked about, some really older folks that have been around for a long time, not necessarily because they don't have the qualifications anymore, but it's just time for them to potentially give up that chair. So you're saying that it's not that institutionalized in terms of making sure that this thing is refreshed at some type of frequency? Yes, that's what I'm saying. I mean, I just don't know how to say it any differently, but it doesn't happen consistently. But what is consistently true is the dread with which the senior person on the board, the chair of nominating governance, the chair of the board, maybe it's the CEO, has about having the conversation about asking somebody to not stand for reelection. Right, right. That's consistent and systematized. And there are some other sort of old-fashioned ways of, you know, we can't expand the board while expanding the board is if you've been in the boardroom, it's a trivial issue. Somebody makes a motion and the board's expanded by one. Or we can't ask somebody to retire because their term's not up. Well, why can't you? You're supposed to be representing the shareholders. If they're not doing as great a job as the next person, having them stay for another 18 months isn't really in the best interests of the shareholders. So I feel like it's a little bit the dirty little secret in corporate boards. This unwillingness of people to either ask somebody to move on or to move on themselves. Well, then there's the whole chairman CEO thing, which I've never quite understood that how you can be both the chairman of the board as well as the CEO of the company if the board is supposed to be the CEO's boss. But I don't think we're going to solve that problem here today. That's a third rail that I'm not going to get into. And I would suspect that it really varies by person and by situation. Sometimes I'm sure that works just perfectly well and other times there is a reason to have a separation. Right. Let's shift gears a little bit and talk about some positive news. Again, you had an article that you did. It's been a while now. December 18th saying that you place more women in boards the first quarter of Q1 2018. It's an old article. Then you had it all 2017, which is kind of a nice interesting indicator of trending in the right direction. As you just mentioned, before we turn on the cameras, your phones are lighting up with all the stuff going on with the Black Lives Matter movement. So people do seem to be in a better place than they were. So how do you see it kind of progressing? What are some ways that other people can contribute to help make sure that the momentum is going up and to the right in the correct direction? Sure. Why don't I talk about what I think caused the change? And there's plenty of room for other people to take these actions. Certainly, there has been for many years, there were not for profit organizations and academic institutions that wrote about the reasons, wrote about, had conferences, et cetera, about the reasons there should be diversity on boards. I have to say parenthetically, this notion of diversity, for me, it goes a lot back to the idea of the dynamic board. So some of the, it's not just being a woman per se, or a racially diverse person per se, it could be a person who actually has those needed skills. But anyway, so for a long time, these not-for-profits were focused on this. But it was on March 7th, 2017, when State Street came out with their proclamation that they were not going to support chairs of nominating governance who didn't create diverse boards. And you might remember when they put the statue of the girl with her arms spread out in front of the bull on Wall Street. That was incredible. And that led a number of other financial institutions who voted proxies to support that. That was huge. Another movement or another action that mattered is the State of California saying that they're setting up quotas. I'm no fan of quotas, but now that I've actually seen what happens in the State of California, and what's happened to the quality. I mean, we aren't putting people who aren't high quality on these boards. We're putting outstanding women on the boards, but there's more of an opportunity. And then the third thing that happened, and I realize we're now getting into January of 2020, but I mentioned it because there are many more, so there are many more states that can do what California did. There are many more financial institutions that can do explicitly what State Street did. And many have, but there's still more. And then the last thing happened at Davos in January of 2020 when David Solomon, who's the CEO of Goldman Sachs, said that they will not take any company's public unless this year there's at least one woman on the board and next year two women on the board. And I mean, this is huge. So what I would point out to you is that in the case of State Street and in the case of Goldman Sachs, the senior member of the organization actually stepped in and did something and set a tone and set an expectation in sort of if you were created a rule, which is different than saying my head of diversity and inclusion is gonna take care of it. Or the person, the head of talent is responsible for this. It really has to come from the top. So there are many many many other organizations with people at the top who can put in similar recommendations or basically new ways of working. Right, but we know from real data and real evidence that a diversity of opinion leads to better outcome and it leads to better business results. So it's funny that even with that kind of data you still need kind of that personal touch to push it over the line to really make it real. The fearless girl statue is an amazing story. I'm happy to say I tracked her down and got a couple pictures. I've got a few daughters that I shared it with and kind of the rallying cry that that became, in fact I think they've even moved it to a more prominent position from across from the bull really is interesting that there's these small little symbols that can mark significant progress and kind of this ongoing journey. Yes, I agree with you completely, but maybe it goes back to that whole notion of why can't you, why don't people want to retire from boards? And what's really these various things have done is it's just forced the conversation and it's forced the action in a, being on a board is a great thing. You get paid a lot, you're at the top of the high. I mean, it's the pinnacle of somebody's career. So I'm very sympathetic to why nobody wants to move on, but that doesn't mean it's right. We're supposed to be doing what's right for the company and the shareholder. Okay, so before we let you go, just a couple of concrete things that you suggest to people that they can do to kind of help this mission along. Well, so back to what differentiates us. We present slates of all women and what we recommend is interview the women first. And if we don't find a candidate who matches what you need, both the specific skills and the personality, we'll open the search to men. And while we have placed men, whenever we've started with an all-female slate, we've never been asked to open the slate to men. So what does it mean? That's not us, we're a client service business. It's the client who's never asked us. So it's incumbent upon us not to just have a slate of women but to have a slate of outstanding women. And that goes back to focusing on this and spending every day and talking to so many women in advance. So that's the first thing I would say is that start with an all-female slate. The second thing I would say is people say to me, what's the most important thing about, you know, to get a woman on a board? And I say it starts with a signed engagement letter. So what does that imply? What that implies is that we're a for-profit organization doing this from soup to nuts. We don't just find the women and send their resumes out. We run the whole process. We understand the company. We give them materials. We organize the interviews. We do the reference checks. We do what I call the last mile logistics so that in a three to four month period, which is quite fast for the world of boards, somebody goes on the board. We've never had a failed search. So it's really managing a whole process. And the signed engagement letter means somebody actually hired us to do that. So we start in the very beginning with a board who wants the whole process and wants to have a diverse candidate. So it's not like a question at the end or whatever. It's all lined up. And we try to leave no stone unturned. And I would say that that's very important when you start thinking about a lot of databases out there, but sometimes when you just go to a database and get a name, it doesn't actually turn into a woman on the board. Right. And I'm just curious to get your personal take. Since you've been doing this for a while and as you said, your phone's been lighting up looking for more diverse candidates, not just women, but people of color, et cetera. Do you see a change in attitude from the senior people that are hiring you to move beyond? I need to check a box or I'm getting pressure. I need to do this versus, wow, I see real benefit. I see this as real important. It's important for me. It's important for my company. It's important really to our shareholders, our stakeholders, and our constituents to actually take maybe an uncomfortable step, or a step maybe uncomfortable is the wrong word, that I'm not necessarily used to or is new or foreign to me to take this action and move this thing down the road. Yeah, I would say absolutely. But I think that even if they start with, I know I have to do this. I might not know why I want to do it, but I'm going to do it anyway. Even for the people that are in that, like take an all-male board. Truthfully, all male boards aren't really wild about this. They've been forced for one reason or another. But what's amazing is if you come up with a high quality slate of candidates, what we find over and over again is the inability to choose between one candidate and another and often the decision to add two women. And that, to me, is a testament to one, the openness of those all male boards to recognizing quality, which is a wonderful. And being able to now see with a live person, if you will, how that new director could really help them. So that's terrific that that happens. Now, just to mention on the racial diversity, we're doing the exact same thing. We're basically, if you will, beefing up, expanding all of our connections in those areas. And we intend to, one of the things that's different is we've had searches that were underway where whoever is leading the search on the side of the company has said, stop, it has to be a racially diverse person. Stop whatever you're doing. And I only, we did a search for a media company and we had 21 African-American women on the slate that met the spec for one reason or another. And then of the new calls that we've been getting, I'd say 60 or 70% of them are we don't want anything other than a racially diverse man or woman. I mean, you talk about the phones lighting up. I mean, it's like a set of fireworks at the 4th of July in terms of what's happened here. And we're completely behind it. And we've had a lot of conversations with a lot of people about what's the right way to approach this in terms of having the conversations with those racially diverse people. And anyway, we're doing all sorts of things and we're bound and determined to be helpful and to be action oriented in this current situation. That's great news, Beth, because, you know, I talked to some of my black friends specifically as it's been going on, you know, a lot of them come back and say, I don't know why this is so different. You know, we've been having these issues for a long period of time. So it's nice to find, you know, some examples where hopefully there's some step function activity going on here. And I think what you just outlined very much supports that this isn't just more the same, but actually there are changes slowly being affected, you know, kind of across many fronts all at the same time, which would certainly be supported by what you just said. So I'd love to, Jeff, I don't know whether we're running out of time or not, but I had a conversation with a senior African-American male board member. And I, because one, he's on the board of a company that's our client. I know how terrific everybody thinks he is. And he chairs audit committees and he chairs nominating governance committees. And so I asked him about how to handle this. And in any case, one of the things he told me is that he would advise his friends that if anybody was going on a board to figure out the sincerity of the board, he said, because I don't wanna go on a board and check the box. I wanna go on a board because I'm part of a company trying to make strides in these areas and where I can add value. He said, I would tell them up front that if all you've got is a black woman in diversity and inclusion, I don't think you're sincere. And if I find that you're not sincere, I'm gonna resign. And when I resign, you're gonna, you, the board will then have to explain to everybody why I resigned. And that won't be pleasant. Yeah, yeah. So I thought, wow, that's, that's... You're putting your mouth where your money is. That's for sure. That's terrific. Well, Beth, it's, we could go on and on and on. Unfortunately, we have other work to do. I'm sure you do as well. But our paths crossed because of some of the fantastic women that we've had on theCUBE who are also clients of yours and getting placed in board seats, which is terrific news. We're happy to highlight some of these terrific individuals. As you said, they're not just women or people of color. They're fantastic people first and terrific executives and kind of representatives of the company. So really excited for you and what you're doing to help put some of these really qualified people in places where they can make a difference. Yes. Well, it's a wonderful job I created for myself. And as I say, I only talk to successful people because unsuccessful ones aren't available to be interviewed for board roles. All right. Well, we will leave it at that. So Beth, thanks a lot and have a terrific week. Thank you. Thank you, Jeff. All right. Thanks a lot. Bye bye. All right. She's Beth. I'm Jeff. You're watching theCUBE from Palo Alto. Thanks for watching. We'll see you next time.