During the July 9, 2016, Goldbelt Annual meeting, I had the opportunity to thank Juneau Shareholders and those attending via the webcast. Today, I’d like to take this opportunity to thank Shareholders again. I also want to thank my fellow directors Ben, Rick, and Katherine and Goldbelt employees for their support and continued support. I couldn’t have served my term without their mentoring, leadership, and vision.
It’s been a privilege to serve as your Director from 2013-2016. The learning curve is steep for a new director coming on board, but fortunately, the hardest part wasn’t the 90+ page board packet, the Board dynamics, and politics, or learning patience in the Board committee system. Frankly, the hardest part was learning Roberts Rules of Order!
Today, I also offer my perspective on Shareholders voting for change, board political parties and reorganization, and the divide on the Board.
Not Running for A Second Term in 2015
My year as Chairwoman of the Board began immediately after the June 2015 annual meeting. When the Board had to navigate serious business challenges, I made the decision in December 2015 not to run again because I didn’t want the political pressure of running for reelection to influence any decisions I had to make as Chair. I wanted to serve shareholders with integrity during a trying time.
As Chair, you set board meeting agendas and facilitate the discussion at the board level, and I knew that I had to do the right thing in every moment as Chair, even if it mean not running for a chance at a second term.
Voting for Change
One of the other challenges during the first year of my term was working with a director who told me I should not be on board because of the election process that got me there. When faced with this type of hostility, all you can do is listen, validate their position, and then say “I’m sorry you feel that way, but I disagree,” and then move on. I wasn’t angry. During the rest of that year, I didn’t treat this director with disrespect because of this interaction. Instead, I maintained my professionalism, even though this person didn’t feel I belonged on the board.
My point in sharing this story is that some established members of the Board aren’t open to change. Some directors have been on the board for so many years that they view new directors as a threat to how they’ve always done business at the Board level. Older directors have a responsibility to mentor their children, younger shareholders, or decedents, and then step aside allowing new directors to be elected to the board. This year, I was pleased to see that one of these established directors stepped down, paving the way for her daughter to run and eventually become elected to the board.
The shareholders voted for change on July 9th. I should be excited about this “change” that could happen with two newly elected directors. However, shareholders don’t always see the connections or relationships between candidates and existing board members. While they think they are voting for change with a new director, it may not turn out that way.
If the new director has ties or support for existing directors already on the Board, then the new director will most likely “fall in line” and become part of the existing directors’ political party. It’s more complex than this, but I’ll address it another time.
Political Parties on the Board
Are there political parties on the Board of Directors? Yes.
There are always two parties: (1) the established group that has been there for years; and (2) the younger group. While the Board always puts aside political party differences during serious business challenges, the divide between the parties always emerges when the Board must begin the Nomination & Elections process and during a CEO search. At this time, board politics gets ugly, divisive, and entrenched.
But, be assured that the Board always rises above partisanship when pressing issues must be addressed or managed. It’s a joy to see a united Board working together to solve the issues at hand. I’m happy to say that 70% of my time as Chairwoman was marked with this type of collaboration and unity. The other 30% reflects the divisiveness and classic “old versus young” political dynamics.
I’ve mentioned that change isn’t changing if there are connections between candidates and existing directors. Of course, one could argue that we have a small community, so there will always be connections between candidates and board members. Fine. But the point is when shareholder votes for change in a new director, it’s not a guarantee that the new director will side with change.
Do shareholders understand that these new directors go into a Lion’s Den minutes after the annual meeting? Probably not.
After an annual meeting, the Board of Directors and CEO goes into a private room. There are no board officers, no chair to facilitate discussion. Frankly, it’s kind of creepy. No one is talking. No is looking each other in the eyes. It’s like a high-stakes poker game.
When you’re a new director during the reorganization meeting, you have very little time to decide who to support as Chair of the Board, Vice Chair of the Board, Secretary, and Treasurer. After the Board votes on each officer position, you know exactly how it will act over the course of the next year. If it’s the established member, i.e., old Vanguard, then they will try hard to maintain the status quo. If it’s the younger directors, it becomes an exciting environment with new and higher standards for new ventures or vigilant oversight over the federal contractor revenue stream just to name a few.
Established directors have a unique perspective on how they want Management to behave and perform. They tend not to like change. They aren’t open minded about new industries such as the Internet of Things or human resource talent they don’t understand, even though new industries could turn Goldbelt into a billion dollar business someday. The younger directors want to change or improvements in Management talent, new business ventures, and execution of strategic priorities.
There’s always a tension, sometimes hostility between the old and young when it comes to matters of change at the board level. I’ve witnessed many hostile disagreements between directors who have too much history between them. Rather than debate the merits of the issue at hand, the debate turns ugly and goes right to important issues that have never been closed or won.
When I see historical baggage arguments between directors, I always think to myself that these members have outlived their usefulness on the Board if they cannot be open minded and treat fellow directors with respect and professionalism.
That’s why it is so important that shareholders vote for new directors every two or three terms. It’s time for a change when directors cannot be open minded, debating the issues, not arguing against the director rather than the issue. For example, I’ve seen Director A lock into a position only because Director B supports an idea, yet if that idea is backed up by Director’s B’s political leader or party member, then all of a sudden Director B supports Director A’s idea. It’s dumbfounding and nonsensical.
Board Churn Take Times
The old versus young divide may always be there. It takes time to churn over a new Board of Directors. New candidates will try every year as the old Vanguard keeps running for reelection. I hope new candidates will continue to challenge the Board by running. This year was extremely unusual. I chose not to run for a second term, and another established director stepped aside so her daughter could run. However, next year we’ll have three directors running for the Board yet again. My hope is that one, two, or all three of them decide not run, stepping aside for a new generation of directors.
I hope to see candidates continue to try to get on the Board. Change is good. Change isn’t something that we should be scared of when there are exciting new opportunities on the horizon. The Board will always have a core number of directors with experience to guide newer directors, thus protecting shareholder interests.