Corporate and philanthropic boards: John Gallo says one’s commitment must be total

John Gallo, Global Sales Director for BNP Paribas in New York City, has worked in the financial industry for more than 25 years and is a leading expert in areas such as stocks, bonds, capital formation, hedge funds and asset management. assets. Additionally, he is an early stage investor and philanthropist.

Once the youngest managing director in Lehman Brothers history, he also held executive positions at Deutsche Bank and Citigroup. He was Director of Deutsche Bank’s Institutional Clients Group from 2015 to 2017. While at Citigroup from 2008 to 2015, he was Head of Investor Sales for Global Markets in North America.

He has also served on various corporate and philanthropic boards over the years.

We had the privilege of speaking with John about those duties, and he provided us with the following insights.

What are the similarities and differences between corporate and philanthropic boards?

You should really only serve on a board, whether corporate or philanthropic, if you’re committed, due to the inherent responsibilities and potential obligations. You must take seriously your oversight duties and the extent to which you can shape the direction of an entity. In addition, you often have to put your own interests aside and work toward the larger mission of the organization. If, for example, I am a member of the board of directors of an early-stage company in which I have invested, as has been the case in the past, I must make decisions based on what is best for the business as a whole, not just for myself. my investment, and sometimes those interests are not aligned.

When it comes to differences, you are more likely to be dealing with situations outside of your core experience on a philanthropic board; it’s a case of everyone contributing, whereas on a corporate board it’s usually leverage your experience Corporate boards should have a comprehensive skill set for their members. When I have been asked to serve in the latter, for example, it is because of my experience and financial aptitude.

What do you do when you have to deviate from your area of ​​expertise?

You have to take advantage of your experience and intellect and investigate a little more. It challenges you in different ways, which makes it interesting. In addition, you often need to leverage your network to access colleagues with areas of expertise that complement your own.

What do you look for before agreeing to be part of a corporate board?

I seek to understand not only the fundamentals of the company, but also whether the management is confident, focused and of high integrity. Have they done their due diligence and thought strategically about the composition of the board? Are the members focused on making the company successful?

How has board membership changed over the years?

Boards, whether philanthropic or corporate, have more accountability and responsibility these days. That has led companies to be more selective about who works for them, both in terms of skills and experience. More is expected of members. They need to be more committed to oversight, strategy, and innovation.

When you say that a board member has more responsibilities, why is that and what would those responsibilities entail?

I think the financial crisis was one of the reasons for the change: were the boards really exercising enough oversight? Was the Lehman Brothers board aware of the company’s risks and strategy? When I came to Citigroup just after the financial crisis, I had a feeling that the board hadn’t really been overseeing the bank, which while it outperformed Lehman, it also had a near-death experience. Over a period of about five years, Citi’s board was remade, became much more active, and the bank is much better for it.

What role does personality play in the cohesion of a board?

I’ve been on some boards that are very collegial and collaborative. I’ve been to others that were very professional and one or two that were marred by conflict. In my experience, philanthropic boards have a feeling that everyone is together and serving a good cause. While there may be differences of opinion or even heated debates, there is an underlying team approach.

With corporate boards, you are often paid to be there, or have a vested interest in the company itself. It also represents specific knowledge or experience. So you feel a little more gravity. That doesn’t mean you try harder than on a philanthropic board; certainly, I try to contribute as much in both situations.

What are the thorniest issues facing directories, in general terms?

So many, like having to change the management team, orchestrating a shift in strategy and deciding to raise money at a difficult time. Overall, the board serves as a critical steward, whatever the entity’s mission, setting the direction of the company and ensuring sustainability and, hopefully, success. As an example, a board can be vital in leading a company through an economic downturn. The pandemic, I know, has caused most boards to work overtime.

What kinds of problem-solving strategies do boards follow?

Boards are more problem definers than direct problem solvers because they often delegate problems to management to find solutions. Board directors must understand the difference between being a director and the operator of the business. decide what no doing is often as important as deciding what to do. Framing a problem and prioritizing problems for management will improve the company’s overall problem-solving competency.

What advice would you give to those who might be serving on a board for the first time?

If you’re doing it, you need to fully commit to it. The first thing is to be informed, prepared and do the work. You must be ready to participate, as that makes a huge difference.

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