Member, Board, Audit Committee, Chair of Corporate Governance & Risk Assessment Committees
International Seaways Inc.
New York, New York
Past positions include partner, Arnold & Porter
JD and MBA University of Chicago
Board service: gratifying and challenging
Listen to interview:
David Greenberg: Okay, Tell me what you’re doing.
EXJ: Basically, we’re helping lawyers who want to transition out of the practice of law into other roles. It could be a corporate role, it could be opening a bakery, or it could be anything else. But a particularly desired role seems to be serving on a board. So I wanted to talk to you about board service and get your advice for our audience.
David Greenberg: Yes, many lawyers and senior executives imagine a public company board role as a kind of career capstone. Board service is very gratifying and interesting but there are lots of myths about it that deserve scrutiny.
EXJ: Usually people start at a firm and go corporate. You started at a nonprofit before heading to a law firm and then went on to the corporate world. Tell me about that. How did that all happen?
David Greenberg: Actually, I came out of law school, did public interest work for the Consumer Federation of America for four years, then went to a law firm, was elected to the partnership and then left the next day for a senior executive role at a huge client of the firm.
EXJ: Well, that’s certainly different. What made you leave law practice at Arnold & Porter to go in-house? Initially, you worked as a lawyer at the federation, right?
David Greenberg: When I left A&P, I was named vice president in charge of the Washington Government Affairs office for Philip Morris Companies (think Kraft Foods, Miller Brewing and Marlboro cigarettes), which involved all the policy and political issues related to Congress and the Executive Branch in the United States.
EXJ: So that’s really a combination of corporate and law.
David Greenberg: Yeah. But the truth is that I have not practiced as a lawyer since I left the law firm in 1988.
EXJ: What kind of law did you practice at Arnold Porter?
David Greenberg: I did some litigation, some regulatory, some international trade, and some of what you’d call government affairs.
EXJ: Okay, so there’s a connection there. Tell me about your path to corporate.
David Greenberg: So when I came out of law school, I won the award in my class at the University of Chicago for being the lowest paid graduate! The job that I took wasn’t exactly a traditional law job. I served as a lawyer for the Consumer Federation, but most of my job was related to Congress and policy. So I have always been more on the policy side. Arnold & Porter had a government affairs practice in Washington at the time, so I did that as well as more traditional legal tasks.
EXJ: How did you get into board positions? Was there a recruiter involved? Did you use a coach?
David Greenberg: No, I didn’t use a recruiter or a coach. All my board positions have come from someone who knew me, trusted me, and recommended me as a board member.
EXJ Is that pretty typical in terms of how people get on a board?
David Greenberg: I would say two out of three board positions come from networking or relationships as opposed to through executive search. In other words, two-thirds of board appointments are people known by the CEO or someone else on the board. They’re identified that way. Maybe one-third of board appointments come through an executive search. I think that’s what the data says.
EXJ: That’s interesting and it makes a lot of sense. You want people who are respected, known, and trusted. You want to know that it’s someone who will be independent and intelligent, and experienced. So generally, candidates come via recommendation.
How about lessons learned? You’ve served on a lot of boards. What lessons have you learned that would be helpful for those starting out—things you’d want to know?
David Greenberg: Being a good board member requires a tremendous amount of work. Why do I say that? All good companies have management teams that are working virtually 24/7 on the company’s issues. A board member only comes to meetings quarterly or six times a year, so to add real value you have to work hard, think hard, and generally be at the top of your game. Imagine trying to come in and have wisdom and judgment and perspective and guidance for the management team that’s already working on the issues every single day. It’s hard to add value in a situation where there are already very smart people who are devoted to that company full-time when you’re only meeting half a dozen times a year with just some prep time and a few phone calls and the like. When I was a C-suite executive, I used to say that we should all be embarrassed if the board comes up with something we hadn’t thought of. The C-suite is on it 24/7. So I think that that’s one lesson.
EXJ: So what can you do to position yourself for success as a board member?
David Greenberg: You really need to listen. It’s really important to understand the culture of the boardroom. Boards are little organisms unto themselves. You have to understand how that organism works if you’re going to be successful in that environment. Every board has a culture, and every board has traditions and conventions and ways of people interacting. I think you have to get that right before you can be a successful contributor.
EXJ: Aside from that, the companies also have their own cultures and ways of doing things. How the heck do you stay on top of it all? As you said, you’re only meeting a few times a year at most.
David Greenberg: The leadership of the company is a tremendous source of information. They’re distilling stuff for you, and you have to use all the tools at your disposal there. When you enter a board, there are usually people who’ve been on it for years and years. Take advantage of their experience. Take every opportunity you have to meet the management team and understand where they come from, what their role is, and how they see the issues. So I think there’s a tremendous amount that is kind of served up for board members. But you have to figure out how to take best advantage of it. You can’t be passive. So there’s another lesson that I think is really important for people to learn, which is the difference between being a board member, being on the board, and being in management. I didn’t always realize how seriously you have to take that distinction. Boards are not there to run companies day to day. They are there to advise management. Of course, there are certain decisions that are allocated to boards like choosing a new CEO, but people need to learn the difference between the role of a board member and the role of an executive. Most people come to boards, certainly their first one, having only been an executive. It can be complicated to figure out how to operate within the limits of your role as a director.
EXJ: How about lawyers? Are they well suited to serve on boards?
David Greenberg: Lawyers are used to advising and I think that is a comfortable fit with the way boards advise. The other thing I’d say is that today is a very good time to have smart lawyers on boards. One of the biggest issues companies face relates to all of the risks that a given decision might bring. Lawyers specialize in thinking about risk, uncovering risk, and dealing with risk. So I think a lawyer’s ability to work in the hyper-complex board environment, analyze complicated issues, and evaluate risks has become more and more important.
EXJ: I agree. And then there are the corporate governance concerns and fiduciary duties. It would seem that understanding the law would be particularly helpful in those regards.
David Greenberg: Absolutely.
EXJ: Do you feel that a certain type of lawyer is better positioned to serve on a board like a GC or a corporate lawyer as opposed to a litigator?
David Greenberg: I think it depends on the person and the company and the risks the company faces. There are certain companies in certain industries where I would think having someone with a litigation background would be very helpful. But in other cases, someone with more of a corporate and corporate governance perspective would be more useful. But, you know, board members are asked to understand and help and guide on a huge range of issues. So I’d say it’s more about the match between the potential director and the company than it is about anything else.
EXJ: Do you think being a lawyer helps in getting selected to serve on boards?
David Greenberg: I don’t know that I’ve been chosen for my boards because I’m a lawyer but being a lawyer has helped me be effective on my boards. When people are thinking about how to position themselves for a board role, they have to think about themselves in terms of the assets they bring beyond being a good lawyer. I don’t think being a good lawyer is enough.
EXJ: What skill sets do you think really stand out to make somebody a good board member? I mean, it’s the understanding of the culture, the willingness to listen, the whole way of thinking. What else?
David Greenberg: Breadth of experience, great judgment, and the ability to understand complex issues fairly quickly are all important. Getting along with people is really important too. Boards are small groups with their own cultures. You have to be able to function in a small, fairly intimate group. You need to be able to deal with differences of opinion in a respectful way. You also need to be confident enough to speak your mind when you disagree with the prevailing wisdom, but also humble enough to listen and recognize that you’re not always right.
EXJ: It sounds like a real balancing act.
David Greenberg: It is and it’s a challenging role.
EXJ: One of the articles I read talked about how sometimes being a corporate lawyer representing lots of corporations can actually be even better experience than being a GC because the GC knows one company, whereas the corporate lawyer knows many.
Do you think there’s a certain amount of time that you should be practicing when it would make the most sense to feel you’re ready for a role on a board?
David Greenberg: I don’t know. I think it’s more dependent on the individual. There are lots of companies now with fairly young management teams. Not everyone needs gray hair. I’d say that they need a clear area where they can contribute. Let me give you a couple of examples. There’s a huge need now for people at the board level who understand e-commerce or all the aspects of cybersecurity and all the things that can go wrong with technology. And sometimes those come in the form of people who have a lot of years on their driver’s license and sometimes not.
For a company heavily dependent on social media, someone relatively younger with let’s say 10 years immersed in it would be a great candidate. But again, it really depends on the situation.
EXJ: ESG is another big topic that’s relatively new and developing. So, yes, somebody younger could have the right experience. Now, let’s switch gears. Looking at your experience, it’s extensive and varied. What do you think made you most attractive as a candidate to serve on a board?
David Greenberg: One leg of it is that I have a lot of experience with companies that were facing challenges from society. I served for 20 years as a senior executive at a company that owns the largest cigarette manufacturer in the world and the second largest food company and the third largest brewer. There were all sorts of societal challenges that I think made me interesting to a company like International Seaways, which has lots of challenges in that its lifeblood is transporting fossil fuels across the oceans. Fossil fuels don’t win a lot of popularity contests these days and the regulatory environment is complex and rapidly changing.
Another thing that made me attractive was my 20 years of experience in what you might call ethics, compliance, and governance. That made me attractive as a governance committee chairman. So I think everyone has to kind of understand what assets, attributes, and capabilities they bring to the table and how those might match with a given company’s needs.
EXJ: When I saw the cigarette company in your experience, I could only imagine the challenges you faced. Speaking of challenges, what do you consider the greatest risks and the greatest rewards of serving on a board?
David Greenberg: I think the greatest risk is being in a position where you don’t feel inspired or that you’re adding value. It’s a lot of work, and for many people it comes sort of later in their career. If it’s not rewarding, that’s awful. So, that’s one risk. There are also legal risks and financial risks in being a director that need to be understood before jumping into a board role.
EXJ: Exactly. I see lots of corporate governance, breach of fiduciary obligations allegations, heightened government scrutiny, and of course associated liability.
David Greenberg: Corporate governance issues affect every company. You can and should check out a company thoroughly before accepting a board role. Some questions to ask: What is the D&O insurance? What is the litigation history? Is there any history of corporate scandal in the company or industry? Are there any ongoing SEC or other regulatory investigations? What proposed legislation or regulation might change the game for the company? It’s an honor to serve on a public company board, but you need to go in with your eyes open.
EXJ: Absolutely. You should definitely do your due diligence and check into the company’s reputation in the market.
What skills do lawyers tend to lack and what areas should they work on if they want to be considered for a board position? Financial acumen would definitely be one, I’d imagine.
David Greenberg: A lot of lawyers are not very familiar with the way companies actually operate in the marketplace. They don’t really tend to think like business operators and boards need people who understand operations and can help guide operations. Overall, you need to be able to understand and follow corporate operations. Those lawyers who have been intimately involved with strategy and business operations will make better board members – though, as I said, there are companies where deal lawyers or litigation experts can be very valuable.
EXJ: I imagine an MBA wouldn’t hurt. What do you wish you knew before you joined a board?
David Greenberg: I have an MBA, but it helped me less than you might imagine. I wish I had known how long it would take to get up to speed in a given company. It can take a long time. It would always be good to know more about the corporate culture from the get-go. And I wish I had thought more about the importance of building personal relationships with other board members and with management, and how important it is to work on all that.
EXJ That’s really good and helpful for our readers to know. Any other advice you would give somebody considering transitioning from law to a board position? I mean, if they’re not necessarily going to be recommended, should they be talking to recruiters or working with a coach? What would you suggest for them?
David Greenberg: I’d say to talk to board members you know to get insight into the role and how to network with board members because board opportunities will come to those who are known and trusted by sitting board members and CEOs. So you should think deeply about the people you know in senior positions who trust you and value you. All of my board spots have come from relationships, not executive searches. I don’t know that I ever would have been a board member if I pursued the headhunter route. In fact, I have never had a call from a headhunter about a board spot.
EXJ: You have been incredibly helpful. I really appreciate your time and great advice.