S2E2 - Andrew Escobar on what good governance looks like on a normal day

TRANSCRIPTMATT VOICEOVERHi, my name is Matt Fullbrook and this is Sound-Up Governance. The second episode in a brand new format where we zero in for few minutes one expert's perspective on a very specific corporate governance question or topic. Once again, my guest is Andrew Escobar, an experienced corporate director, open banking expert and super thoughtful big thinker on board stuff in general. I've done a lot of reflecting over the past year on whether we might be overdoing it when we look for answers to governance questions by looking at catastrophic failures. Even if there are useful lessons and examples of failure, they won't tell us anything about what it means to do a great job at a normal board meeting. And doing a great job at a normal board meeting is really important. So let's dive right into today's question.MATTOne of the questions that I - and this might be splitting hairs for us, like for Matt and Andrew as the people who we are, but for a lot of people it's not - which is the question is framed as how do we do good governance under normal circumstances? Like, on a regular day where there's not like a crisis or even an important decision to make, it's just a regular ass board meeting. How do we do good governance? I'll just stop. What do you think?ANDREW ESCOBARI think the challenge with that is... how do you do good governance on any random day? The problem with how we approach governance today is that it doesn't feel like an everyday thing, particularly for directors. It's something that you might engage in every couple of months, maybe every couple of weeks. It depends on your cadence. But it, you don't live and breathe it for the most part every day. And we tend to approach it in very segmented ways. Right? Our, our all day board meeting is in three months. Our committee meetings are in a month and a half. And you know when they are and you're sort of working towards those very specific sets of time. And I, I'm not a fan of that. I, I'd love to see how you diffuse decision making so that it is more of a day to day exercise. It might not take up all your time, but I think the best directors are the ones who think about those decisions that they have to make on a regular, if not daily basis.MATTSo I think there's something in what you're saying that I don't know if I've thought about in this exact way before. Are we like artificially inflating the importance of the act of governance, like, because of this occasional nature of it? Where, like, okay, well every meeting has to be a thing. Let's make sure we're...we're increasing the vibe or the feeling of importance of everything that we have to do just because we don't get a lot of chance to do this.ANDREW ESCOBARYeah, we put way too much emphasis on the time that's scheduled as opposed to everything that happens outside of that time, which really matter. That's actually, I think, often more important. If you, if you gave less significance to that structured set time, how else would you arrive at decisions? How else would you shape decisions? Like, because decisions can be shaped within a meeting. It happens all the time. And that. I think if you're going to set specific time for decisions to be made, then you should use that productively. Of course, it should shape the decision in the time, or else why are you meeting to begin with? But that probably isn't the only way to do it. There has to be other ways, because that's not how we work. We don't delegate decision making to a specific scheduled time in our daily lives. In your home life or in your work life, you don't decide these things four weeks from now. You kind of have that conversation at dinner. You have that conversation having coffee with a colleague. That's how you make decisions. And we don't approach that in the same way in board work.MATT VOICEOVEROkay, sure, it's pretty common to think and talk about the work of a board outside of board meetings, and even to emphasize the importance of socializing among directors and executives at board dinners and similar. But do you agree with Andrew that even this might be putting too many constraints on how boards work? Is it conceivable that the very construct of a regular board meeting might be getting in the way of effective decision making. What do you think? I personally think I do agree. Think of all the possibilities that most boards choose not to explore in the ways they work together. Most board meeting agendas are more similar to each other than they need to be. And there's often not much structure around what happens outside of the confines of formal board and committee meetings. What else might we try?In the next episode, Andrew and I will discuss what specifically makes a great director great. A quick note on today's music, which is built around a chopped up sample from the song Grit by my band, KC Roberts and the Live Revolution. If you want to know a bit more, I've left some brief written info at the end of the post. And don't forget, since we're still really new to this format, please boldly reach out and provide me whatever feedback is on your mind. If you're enjoying the show, don't be afraid. Subscribe, like, comment and share with anyone who might be interested. Thanks for listening. See you next time.MUSIC NOTES:First things first, this is based on a chopped up sample of Grit by KC Roberts & the Live Revolution, a song written by amazing friend and bandmate KC Roberts. The drums in the sample are played by Austin Gembora. I’ve been listening to a lot of JPEGMAFIA and so, well, I guess I was in a bit of a chaotic headspace. All of this was programmed on an MPC Live. Other than the Grit sample, there’s a “tambourine” sound that I crafted from the synth engine on a Nord Lead AI synthesizer. I also played a bit of a bassline on the Nord. Get full access to Ground-Up Governance at groundupgovernance.substack.com/subscribe