Stefania Mallett, co-founder and former CEO of ezCater, shares her entrepreneurial journey and insights into effective board governance. She emphasizes the importance of board composition, highlighting the pivotal role of understanding marketplaces and the nuances of investor-backed boards. Stefania also discusses the crucial dynamic between CEOs and board chairs, the challenges in communicating complex business scenarios to board members and the critical process of succession planning.
Stefania Mallett, co-founder and former CEO of ezCater, shares her entrepreneurial journey and insights into effective board governance. She emphasizes the importance of board composition, highlighting the pivotal role of understanding marketplaces and the nuances of investor-backed boards.
Stefania also discusses the crucial dynamic between CEOs and board chairs, the challenges in communicating complex business scenarios to board members and the critical process of succession planning.
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Big Ideas/Thoughts/Quotes:
On Relationship Between Board and CEO/Management in Investment Backed Companies
“.. it's kind of like grandparents. The board cares intensely, but in the end, they hand the baby back and you - the CEO and/or the managing team - you're the parents and you have to deal with all of the colicky moments and all of the ups and downs and all of the difficulties and so much more about what's going on inside the company.”
“It doesn't matter how effective a communicator you are, having been on both sides, I can tell you that the most well-intentioned, most transparent, most forthcoming CEO cannot possibly convey to the board everything that the management team knows.”
Origin Story of ezCater and Early Board
“..we closed [a company I had help found] down on a Thursday. I went home and got drunk on the weekend and on Monday we started the business that turned into ezCater, which was helping make food appear for business meetings[!]”
“Don't bring people onto your board who don't understand your business”
Evolution of the Board through ezCater’s Journey and role of a Board Chair
“we started to get more professional board members who understood our business. We lucked into someone [Chris Cuddy] at Launchpad, who understood marketplace businesses, not specifically in the catering food for work business, but he came out of online travel [marketplace]. It turns out one marketplace is a lot more like another marketplace”
“we lucked into someone who became our board chair and $425 million of venture capital funding from some of the biggest venture companies on the planet later, we are now thousands of times the size we were when we first met this Chris”
I don't have a velvet hammer as much as I'm impatient. Impatience is the mother of invention, and so when I watch Chris Cuddy our board chair do his work I think, "Oh my God, that's just better." He's more patient. He listens. It doesn't really take longer. It feels like a circuitous path to the answer, but it's actually about the same length of time as I would have taken with less angst, less fireworks. The founder and CEO are not necessarily the best board chairs.”
Transition of CEO for ezCater
“the company was ready, and I was ready, and I went to the board meeting a few weeks later and I said, "Guys, I got to go. It's time.”
“We launched a search and found my successor. Because of internal discussions, because of the board's hesitation, because whatever, we ended up taking a year. We had the time, I mean it wasn't like running, screaming for the exits, and I wasn't doing a terrible job. My team was doing a super job”
“When this person started, now it's three months, four months, and it's quite clear, he has experience at the 10X level. He brings in knowledge, not just "I think we should try this,"”
Joe: “You have touched upon series of things that apparently apply to investor-backed companies and startups that also apply to every for-profit company, whether private or public. The importance of the chair, the importance of learning to share power - every CEO has to learn it, every founder has to learn it. Every investor, whether it's a startup or not, has to learn it.”
Effectiveness as a Board Member and Over-boarding
“One of the very best board members I have had in my entire career in all the companies that I've been on or on all boards I've chaired or that I've been on the board is a guy who, when I did his reference checks for him people raved about him and when I would ask, so what's wrong with the guy? Almost every one of them said ‘he's on too many boards.’ ”
“It's important to remember that the board gives you a couple of things that you can't get anywhere else. One is the cadence of every X weeks or X months, you have to report to these people…. There's something about that regular cadence of having to report, that is very valuable.”
The second thing you get from them is perspective. If they are good board members, they bring you a portfolio perspective. You live your life as a portfolio. You can only do one company at a time. Even more industrious and somehow energetic entrepreneurs than I do are involved in two startups at a time, but it's rare. But these people who are on your board are involved in 10 startups right now, or 10 companies at your stage right now and have seen many others, and so they can say to you, "Listen, I saw people try exactly what you tried and here's what happened to them," and you can save a bunch of time.”
