Anthony Marinelli:
My advice to new CEOs, start early with individual relationships. Don't wait until first board meetings. Get to know the people, find out what their experiences are, what your board members do, and where they can add value.
Anne-Marie Henson:
Hello and welcome to Accounting for the Future. I'm your host, Anne-Marie Henson. In today's episode, we're gonna explore how leaders can build strong, effective relationships with their board of directors. We discuss the board's critical role in shaping strategy and ensuring sound governance, and share insights on how management teams can foster a collaborative, transparent, and productive board culture. Here to share their insights today, I'm happy to welcome Janet Boyle and Anthony Marinelli. Janet is an independent board member at BDO Canada, with over 20 years of experience as a proven and respected leader. She's an experienced executive in the Canadian financial services industry and is currently the Senior Vice President of Home Equity Finance at RBC. Anthony is the east leader of the assurance practice at BDO Canada and a member of our senior leadership team. He also has six years of experience working on BDO Canada's board of directors, where he's now the board chair, and he's also involved with other nonprofit boards, currently acting as treasurer of Marianopolis College in Montreal. So Janet, Anthony, I am so happy to have you both here today for our discussion.
Janet Boyle:
Good morning.
Anthony Marinelli:
Great to be here.
Anne-Marie Henson:
So I wanna start off with just a first sort of general high level question about the board's responsibility versus management. So let's start with that question. You know, what would you say are the typical responsibilities of a board and how does that differ from the responsibilities of management in an organization?
Anthony Marinelli:
I think that's a great question to start, and I think at its core, the board is responsible for governance and oversight. So the board wants to make sure that the organization is well run, financially sound, and moving in the right direction. That includes things like appointing and evaluating the CEO, approving strategy, overseeing risk, and ensuring accountability to all of our stakeholders. It's important to remember from a board point of view that the board doesn't run the company. That's management's job. Management is responsible for the execution of the work, so things like developing business plan, leading teams, delivering results, handling all the day-to-day decisions that move the organization forward, and I think that's really important for boards to remember as sometimes boards do tend to get too involved in the day-to-day. So it's really important to set that from the start. One way I like to think about this is like thinking as the board as a lighthouse. So if you think of a lighthouse, the lighthouse doesn't steer a ship, it doesn't row the boat. That's the captain's responsibility, and that's management. But what the lighthouse does, it provides visibility, early warnings, and communicates with management if things are going on the wrong track. So if management is focused on navigating the waves, the board is looking out ahead, making sure everyone is headed in the right direction and helping avoid the rocks. I think for me, that separation of roles is critical for a healthy relationship, but always remember the purpose is a shared one. We're working together on the same team with these different roles. Understanding these roles is what allows us to do our jobs effectively. So when each side, I think, respects each other's roles, but also stay connected through good communication and trust, it creates a really powerful dynamic in my opinion.
Anne-Marie Henson:
That's a really great answer, Anthony, thanks. I just, I want to follow up with maybe something a bit specific to you, and I'm sure it's not uncommon for companies as well and other organizations. You are the Board Chair, you're also a partner at BDO, so you're sort of playing a dual role, right? So how do you make sure that you're wearing the right hat depending on the right situation?
Anthony Marinelli:
It's a really good question. I think any board that has internal members struggles a little bit with this, and this is why we bring in people like Janet onto boards to help us. But I think it's really important to remember that when you're on the board, your responsibility is to all the stakeholders. It's no longer to, in our case, the service line I work in, in other cases the division or certain people, it's to the organization as a whole, and I think when you go into board meetings remembering and always thinking that way, I think that's when you have success. And on the flip side, if I were not doing that, or other board members who are internal board members are not doing that, you quickly lose confidence of management because all of a sudden, you're not thinking for the wellbeing of the whole organization. So I think it is challenging at times because we're so ingrained in our day to day, but it's an important distinction and an important reminder. You've gotta tell yourself before every meeting what your role is in this meeting, so I think it's something that we do very well at the boards. I'm a part of the internal members, but something that you need to be purposeful in remembering when preparing for meetings.
Anne-Marie Henson:
Yeah, that makes a lot of sense. Well, thanks for sharing that. And I want to ask maybe from your perspective then, what does a strong sort of productive relationship between a board and management look like? You mentioned it already that the board's job should be one of governance, of oversight, acting as a lighthouse, but there does have to be a really strong relationship, I assume, with management. So how do you navigate that and what do you think make up a really good sort of good characteristics of a strong relationship?
Anthony Marinelli:
Yeah, good question, and there's many things I could say here, but if I try to really narrow it down to some key items, I spoke about role clarity before, so I think that's one thing that's really important, understanding what your lane is. But then I think two other ones that are really important are trust and open communication, which I think is probably the most important one. With open communication, everything else seems to fall into place and I think when it's working well, when things are going well and you have this open communication, I think nothing feels like a formality or reporting exercise. It feels like a real partnership between the board and management. That doesn't mean you always agree, like we've often disagreed with management on certain things, but there's always that alignment on purpose and their respect for each other's positions and perspectives, so I think that's important. And if I think about what the board is there to do, which is to govern, challenge, and support, I think if management understands that, they'll understand that we may have a different opinion and we'll work together to figure it out. The board is not there to manage day-to-day operations. That's a CEO's job. And one thing for me that the CEO, especially new ones should remember, is that the board should be one of their most valuable strategic assets, not just an oversight body. So using the board properly will help them have success in their job. Now, a common mistake I've seen is that CEOs and management sometimes treat the board as an audience instead of a resource. So they'll come to board meetings and they wanna impress, they wanna bring their presentation or their ideas that are fully baked or almost fully baked, not really talk about some of the issues that they may face with these ideas. They want to impress the board. and I think that's not the right way to use the board, I think use the board as a sounding board. That's our job, to help shape these things. And another thing I see that perhaps could be worked on in certain boards is under communicating between meetings. I think if a board only hears from management at board sessions, there's a real miss there to build that trust, to get that alignment. So short updates, quick check-ins, heads up about sensitive issues. So those all go a long way. And my advice to new CEOs, start early with individual relationships. Don't wait until first board meetings. Get to know the people, find out what their experiences are, what your board members do, and where they can add value. And most importantly, be real, be honest. Boards don't expect you to have every answer. They expect you to be transparent, thoughtful, and accountable, and if you could bring that consistency, relationship will take care of itself.
Anne-Marie Henson:
Yeah, I like that a lot actually. And you know, you talked about the board being a sounding board, which sounds a bit weird. It's a good expression, and I think it's important because perhaps that's it, you know, management executives do sometimes feel like their job is to show that they have it all under control and that they know what they're doing and that they basically need to be able to prove that they're worthy of being the executives at that table. So in, in speaking about that a little bit more, you already touched on a couple things about, you know, bringing the board in earlier on conversations and things like that. But what other advice could you provide to CEOs? And I know they're not the only ones who sit around the table, right? You have other executives, the operations, finance sometimes. So what advice could you have for management to be better prepared and also really solidify a strong relationship with the board?
Anthony Marinelli:
Yeah, I may touch on some of the things I've talked about already. 'cause I think it's gonna tie in a lot, I really do. I will double down on using the board for conversation and not for your presentation. Make sure that you're sharing ideas with them, and don't wait until you have a finished product before going to the board with it. When you come in with a finished product, the options are limited for a board. It's either the board's gonna say, "We don't like it, start all over," which I hope is not the case, but it's one of the options. But there's very little you can do when a product is almost finished to change it significantly or to change it in a way that's meaningful. And by bringing it at the end that way, management I think has missed a great opportunity to gain perspective from different people at different steps in the process, and I think that's a big miss for management. I think the boards I've worked with are at their best when they're brought in early into discussions on topics, even if it's just to talk about trends, risks, strategic choices, high level discussions. I think those are the type of conversations that have a significant role on the strategy. I think boards want to see how ideas are evolving. They want visibility into the process, they want the opportunity to ask good questions, and I think that's when the board is most useful. Boards don't expect perfection. They want to go through this process and work with management to get there. Another thing I think that could help is often in meetings we talk too much about the what instead of the why. So things like we will talk about what are the KPIs that we need to hit to hit the strategy. Instead, we should be talking a bit more about the why, the assumptions behind why are we doing this? Like what are the risks of doing this? If we make a decision that we're going to attack a certain part of the market, yes, it's great to have KPIs and say, what does success look like? But everything behind that is, are there other sectors of the markets who will be upset if we do this? Are some of our stakeholders gonna be upset if we do this? And talk those, those trade offs before talking about the what. Also bringing scenarios or options to the board from a management point of view. Instead of that one idea, instead of saying things like, "Here's the plan," say, "Here's what we've considered, here's what we're learning so far, this is what I'm thinking about when I go to bed thinking about the strategy." That's the kind of openness that leads to a constructive path forward, and so I think that's really important. And the last message I have for management on this question is, your board members are there for a reason. They have deep experiences from other sectors or markets. They have a specialty, and that's why they're there. If you only involve them at the end, you really miss out on that knowledge. But if you have them working with you along the way, they can become a strategic amplifier.
Janet Boyle:
I think, you know, one of the key criteria that Anthony talked about is also bring forward, what were the ideas that were left on the cutting room floor, right? So what were the things that were discussed and ultimately discarded? Because I think many times, the board wants to understand the process so that we the firm didn't arrive or the organization didn't arrive too quickly to the solution because a really thoughtful and well considered strategy is going to go to a lot of places that is not necessarily where you start and where you finish, and I think showing that thought process to the board is very, very valuable, as Anthony has indicated in terms of really going through multiple considerations before arriving to the board and saying, you know, here's all the things that we considered and then why we ultimately landed where we did.
Anne-Marie Henson:
I love that Janet, and actually, you're reminding me a lot of something that I really appreciate when I put my auditor hat on. When we're dealing with client issues and something complex comes along, I always challenge my team and we challenge each other to make sure that we don't just go down one path and say the answer is this and then build up the evidence to back that up. We wanna make sure we keep an open mind and we evaluate all different situations before we rush to a conclusion. So it sounds like it applies as much in the boardroom as it does when we're doing our day-to-day jobs. That's actually a good segue, Janet, into a question that I have probably for you to take on is, you know, I imagine that during these board meetings, during conversations that management has with the directors, there are sensitive topics that come up sometimes, right? Uncomfortable situations, items that require a lot of thought and of sensitivity and really a lot of discussion. So how can boards and management take steps in the right direction to make sure that they're having open conversations about these kinds of topics?
Janet Boyle:
Yeah, I think that's such an important question, especially in today's sort of evolving and uncertain world. We have a lot of topics that are coming forward that you have to make sure that you are confident and willing to put those things on the table. And I would say it goes back to Anthony's opening comments around the importance of building trust between the board and management, And that's really how this relationship is underpinned so that you can get to a place where when management is bringing forward either some challenging issues, compliance issues or risk issues, that there's this framework of collaboration and trust. And so as a board, it's really important that when you are receiving that type of information, because you know, nobody wants to receive bad news or nobody wants to think, you know, "Gosh, we have a potential issue here." You wanna be seen as asking sort of collaborative and curious questions. You know, how did we land here or what's really our risk or how should we be thinking about this more broadly? What you never want is that the board is seen as a watchdog and then you ultimately get this culture. And I know that we'll have some discussions on the importance of culture, but you don't want management seeing the board as just sort of waiting to, you know, pounce on an idea and point fingers and things like that. So being able to be curious and come from a lens that's the board of really seeking to understand, understand that in these difficult and sensitive topics that always go in with that mindset of positive intent, wherever we happen to be in the dialogue that we've gotten here in a way that things were well intended or people were doing their best to address this or uncover things or ask questions. And so I think being able to frame it that way so that there's always a willingness by management to bring these things forward, that we don't feel like we have to either hide things in the corner or we wanna table these topics not in a broad manner for, you know, insightful discussion. And so I think starting with trust, and then as boards, making sure that we're modeling behaviors that demonstrate a true willingness to be open to these difficult conversations. And that's through curiosity and really acting as that thoughtful sounding board as Anthony has talked about.
Anne-Marie Henson:
That's great. I actually love that expression, positive intent. I'll start using it from now on. I think it's so important, right? You just often times when you hear something unexpected or that you don't necessarily agree with or don't understand, We tend to perhaps jump to a place of judgment.
Janet Boyle:
That's correct, yeah
Anne-Marie Henson:
But if you start with curiosity and understanding that that individual comes from a place of positive intent, it probably leads you to have a much more open mind about whatever you're discussing.
Janet Boyle:
Absolutely, and it takes work, right? It does take work because I think even naturally as the board, right, there is a responsibility for safety and soundness of the corporation, the organization, and so sometimes you tend to go, "Okay, what's the worst case scenario?" versus stepping back and saying, "Let's just pause, ask some questions, positive intent on how we've landed here."
Anne-Marie Henson:
Yeah, that's great, thank you. I'm excited to ask you both this next question. Hopefully you can both provide insights from your different backgrounds and experiences, but it's been really interesting for myself as a partner at BDO to see the evolution of the board over the years, and until fairly recently, the board was made up of only BDO partners. We did not have independent members, and that was quite recent. And it's quite similar to what I've seen with a lot of my own clients on the private side, right? So we have private company clients who perhaps the board was made up of the owner, other family members, and you know, they grow, they expand, they acquire other companies maybe, you know, private capital comes in to invest in the company, they have different shareholders, and all of a sudden they have board members around the table who are not part of that owner managed circle. So I'd love to find out from you both what your views are on the importance of independent board members and how their role differs or changes the makeup of a board.
Janet Boyle:
So maybe I'll start, and then Anthony certainly will add, hopefully, that the independent board members have added immense value and bring a different perspective. But certainly he can speak about the evolution, 'cause I know that I have had discussions with certainly partners and others at BDO around just how the board has changed. But I think as an independent board member, the value is really bringing a very different perspective that the organization does not currently have. And so how do you seek out a skillset where you know you have a gap? It's very similar to when you're hiring new talent into your organization or to your team. You're really trying to sometimes fill a specific skillset. You're trying to complement a leadership skill with someone who's different than you or has different perspective. And I think as an independent board member, this is really the value and the secret sauce that they're bringing. They're adding something to your board that you don't currently have. They're bringing a lens of experience and a different perspective that's going to allow you to either unlock a different part of your strategy, have a more independent sense of your business, and I would say from my vantage point, the fact that as an independent board member, you are not involved in the day to day business, you have this opportunity to ask difficult and challenging questions. That's the responsibility. Because one of the things that I say is, you know, I have the opportunity to do that because I'm also not crossing paths with somebody at the water cooler, in the lunchroom. And I think it's important and as an independent board member, you feel that sense of responsibility very acutely because your ability to help navigate the organization and avoid some, you know, what may not be obvious pitfalls or adding more sand in the gears is really, really critical. And so I think having the foresight to be able to say, you know, my company does need some different thinking, some different perspective, I'm gonna bring somebody else in. 'Cause that's obviously a big decision. Fit is very critical, and how do you ensure that somebody that's coming in is really going to help propel your organization or your firm forward that's culturally aligned as well. Because having that alignment of, you know, both thought process and best interests of the organization is very, very critical.
Anne-Marie Henson:
That makes a lot of sense. Thanks for sharing your perspective there, and Anthony, maybe I'd love to hear from you. You were on the board prior to there being independent board members and then subsequent, so I'd love to hear about how you've noticed a shift in, you know, how the board acts and what benefits it's provided.
Anthony Marinelli:
Yeah, maybe before I answer your question, Anne-Marie, just wanna reassure Janet that I'm not gonna say anything negative about the independent board members.
Janet Boyle:
Thank you.
Anthony Marinelli:
I'll start by saying it's been great and it's really helped in the evolution and the maturity of our board. I think it makes our board more professional. And this is nothing against the internal board members. I think they've all done and continue to do a great job ever since I've been there. But I think what it does is that diversity of thought that gets brought in, and in companies or in a firm like ours, the people who work there, although they might work in different service lines and have a bit of a different background, oftentimes have very similar ways of thinking. They've been working with the firm for a long time, heard similar messages for a long time. So the external or independent board members bring in this diversity of thought, something that's a different way of thinking, and I think that is invaluable for our board. So when Janet talks about what she's seen in her space and how certain things have evolved based on certain decisions made, that's information internal board members don't have. We know what's happening at BDO, for the most part, we don't have. I find the independent board members are not afraid to ask more difficult questions as well. I think there's that issue that Janet spoke about, when you have internal board members, the management also could be seen as your boss technically if you look at it from the other way around. So the independent board members do that. I think for a board though, before jumping into independent board members, there's certain things that we have to consider closely. I think we have to fully understand the skill sets that we're missing in our board to make sure we do that exercise to say where can an external board member, independent board member help us the most? In which areas? And really focus on finding people who have the skill sets we need or might be lacking within our board. But that fit, that fit that Janet spoke about, that's also very critical because if you bring in independent board members and either they don't feel like they're part of the group or we don't feel like they're part or contributing properly, it won't work. So the work done before introducing independent board members is critical, but when you get that right, it's been absolutely a great thing for our board.
Anne-Marie Henson:
Oh, that's great Anthony. No, thanks for sharing that. And I'd like to ask about all these changes that are happening in the world, right? You look at, you know, the news every day and you see a lot of geopolitical uncertainty questions, uncertainty around tariffs, about climate change, about cybersecurity risks, right? All things that are seemingly changing every single day. So how do you as board members stay agile, stay on top of these issues, and make sure that you're asking yourselves how this could impact the company, the organization that you're on the board of?
Janet Boyle:
You know, first off, I think as board members, you really need to make sure that you're staying well informed. I mean, it's a core responsibility in my view that you are current and up to date on trends. So as things are evolving, you just have to, either as a self-learner or as part of your own business, you need to make sure that you're investing time and understanding some of these critical issues that really impact all types of firms, all sizes of organizations. So that's one in terms of really investing in a broad understanding of what's happening in the market, the landscape. I think the second thing is, as a board you need to build into your agendas flexibility for these types of evolving issues. So I think a great recent example would be tariffs. I think at the start of this year, this was sort of something that was in the very outer reaches of commentary that was made and then suddenly it was implemented very quickly. If you don't have flexibility built into your board process and your board agendas to be able to table these topics, you're not able to give them the sufficient time that's required. So that's really important in terms of time and flexibility. And then the last thing I would just talk about when we think about agility, you know, agility sometimes is confused with a quick response, right? In fact, as a board when you think about agility, it's more around have you built a culture at the board level of being able to respond to things in a thoughtful way, in a timely way that will allow pivoting. So that doesn't necessarily mean we've gotta make a quick decision, 'cause sometimes quick decisions mean I haven't really thought this through or I haven't contemplated necessarily the risks. I think agility is around building that board that says, we have the mechanisms and the opportunity to be able to make these pivots, address these emerging issues, so we've got a framework and a process to be able to do that.
Anne-Marie Henson:
That's such a great takeaway that agility does not necessarily mean speed all the time. So that's really, really important for us to, I think remember, and it's funny you mentioned making time for important changes. I sit on a couple of boards of nonprofit organizations and we have two hour board meetings, which are typically packed. You know, the agendas are full and we often go over, and there was a recent situation where the organization unfortunately lost essentially all of its provincial funding, which was a very significant issue and we had to schedule a second meeting because we weren't able to make time for it in the agenda, whereas that was probably the most important issue at that time. So I totally agree with the importance of making sure that you keep some space in that to make changes when needed so that you can talk about the most important issues at that time.
Anthony Marinelli:
When I think back to when I started on the BDO board six years ago, when you think about the issues that we were dealing with then versus what we're dealing with today, it's changed significantly and quickly, and I think one other important thing, Janet mentioned this, but I just wanna reiterate it, is the learning and development of board members and the responsibility they have to get trainings, to stay up to date, and it's sometimes not as simple as just reading a newspaper article. It's actually taking courses at whether it's ICD or other organizations to get up to date with the things that are important in the current environment. So I do think that's an important message for all board members. This is their responsibility for their stakeholders and for their fiduciary duties.
Anne-Marie Henson:
Yeah, that's very important to remember for sure. And Anthony, this is probably a question for you then, we often hear about the importance of tone at the top, right? When we talk about just the organization and leadership and making big strategic changes, I'm assuming that also applies to a board. So perhaps you can speak to that as board chair. What do you see as being really critical for you to set that tone for the rest of your board members?
Anthony Marinelli:
Yeah, I think tone at the top is critical and if you think about management, absolutely management sets the tone at the top for the organization. But I'd like to think that the board sets the tone behind the tone at the top. So we're the ones who model I think what matters and what we do is critical for not only the well functioning of the board, but also of the whole organization. I think it trickles down all the way through. I think tone at the top shows up in the way the board behaves, not just what's written in policies, but how decisions are made, how they ask questions, how seriously they show up in meetings, how professional they are in meetings. I think if the board treats ethics, integrity, and inclusion as real priorities, not just as checkbox that, we've done what we have to do, I think it sends a message to everyone that these things are non-negotiable. And I think the board helps set the tone when it holds itself accountable the same way it expects management to be accountable. So that could mean things like being transparent about evaluation. So evaluation processes and getting feedback from your peers on the board are really important, and also from some of the stakeholders work with you. How we deal with tough decisions, not just by asking questions, you know, is this legal? Can we do it? But also, is this the right thing to do? Those type of things. I think if the board is engaged, curious, and courageous, I think that attitude filters through the rest of your organization, even if an employee or a stakeholder never see a board meeting. I think at the end of the day when you think about culture, I think it's more caught than it is taught. And the board plays a huge role in shaping what gets caught not only by management, but also by the whole organization. I think they do this by their expectations, their tones, and the examples they set. So I think that's a really critical message for all boards out there.
Anne-Marie Henson:
Yeah, leading by example is such an important thing to do in all levels of the organization, no matter what your role is. So I think I wanna just ask one final question, and this is something that's actually really near and dear to my heart because I think there is such a value that we can provide as individuals, as citizens, to boards, specifically not-for-profit boards or foundations, organizations that don't have necessarily the resources or the funds to pay big dollars for a specific type of expertise that they need. And I feel like we can do that no matter what our level of experience. You don't need to be a partner with 20 years of experience to start getting involved. So I'd love to hear from you, if we've got listeners that are at various levels of experience, some with finance background, which is very sought after expertise, what advice would you have for someone who's looking to get involved but maybe just isn't sure where to start?
Janet Boyle:
Oh, good question, I love that question. And I think actually, if you think about the common thread between all of us on this call is that we are all serving today on not-for-profit boards. And I have been serving on not-for-profit boards for, you know, more than two decades. I think for someone who is thinking about an interest in board work, I would strongly encourage that they seek out a not-for-profit board opportunity, whether that's in a specific area that's very aligned to their values, whether that's perhaps at an educational institute that they went to, whether it's in their community, you know, I think not-for-profit boards are in desperate need of people with skill sets and competencies. Whether that's, you know, human capital experience, as you said, finance, but is it in strategy? Is it in communications, right? There's more and more opportunities as we think about how we communicate with people. Gone are the days of mailing out things asking for donations. It's how do you engage in social media and different campaigns. And I find that in a not-for-profit situation, it's really learning how to run almost like a small organization that doesn't have a lot of resources at its fingertips. Mostly not a lot of financial resources, and you have this opportunity to work with a very diverse group of people who are coming with very, very different experiences than yourself, but that you're united behind sort of this common mission, this common goal. And I think the learnings that you get in terms of having to work with others, how do you think about challenges and problems? I think people are amazed that sometimes actually all of the knowledge and skills that they have 'cause when you're using it in your day-to-day work, sometimes you feel like, well, I just know that. And then you bring it into a space where they don't have that, it really gives someone an opportunity to shine and understand some of the value drivers around how skills and competencies sort of knit together drive very, very positive outcomes. So I can't stress enough, Anne-Marie, that starting in a not-for-profit space is immensely valuable for skills and learning, but incredibly satisfying from a personal perspective.
Anne-Marie Henson:
Yeah, no, I totally agree with that, Janet, and thanks for sharing. Hopefully it encourages some people to go out there and start looking at these opportunities because there are definitely many organizations that need those skills and would appreciate them. So thank you both today for this super insightful discussion. I really wanna thank you for your time and I hope our audience appreciated this as well. If you like the episode, make sure you leave a review or a comment and click the follow or the subscribe button to stay tuned for our new episodes. Thanks to our listeners for tuning in today and to all of our episodes. I'm Anne-Marie Henson, and this has been BDO's Accounting for the Future. We'll see you next time.