Chief Executive Officer of the Vancouver Economic Commission, Catherine Warren, serves Canada’s fastest-growing low carbon economy, contributing to a region with an annual GDP of $138B and building on a global brand valued at $32B. As CEO, Catherine leads VEC’s expert team of business and community development leaders in the Tech, Digital Entertainment, Green Economy, Film Commission, and Asia-Pacific sectors.
A long-time veteran of the digital transformation, financing and community building, Catherine is the founder of FanTrust, a global company that has spent the better part of two decades pioneering digital engagement and business development for international clients in TV, films, video games and eSports-the emerging gaming sector.
A long-standing executive board director of the United Nations flagship program World Summit Awards for digital media, Catherine is also a board member for the national Bell Fund, Canada’s largest private fund for digital broadcasting. She also serves on the board of DigiBC-the industry association for the world’s pre-eminent animation, visual effects, and video game digital entertainment sector.
On April 10th, 2019, Catherine will be presenting a panel discussion on How to Build and Leverage a Board of Directors for an Exit Strategy at TechExit.io. Here are some of her thoughts on how to plan for an exit strategy.
Are there certain benchmarks that need to be achieved in an organization’s history in order for the exit to be successful?
Again, a successful exit depends entirely on the goals of management, board, and shareholders. As long as the different groups are aligned then everyone can celebrate the milestones along the way. One of the key things we as corporate leaders like to see is building value at every stage of growth, locking in exciting valuations and timing the competition so that no exit is too early or too late. For example, with tech companies, leaders are juggling the trends of hardware, software, audience engagement, novel revenue models and competitive valuations — often in real time — and at a time when what the competition does is an open book, easily seen online through everything from user reviews to Crunchbase.
Customers, whether businesses or consumers, are also aware of the value of your stock or your last funding round and can chase down your price point if you are not on a roll. Today’s open environment will absolutely impact your exit strategy. Focus on the prize of growing a sound business, of product innovation and of delighting customers — and the exit, if that’s the goal, will come organically (and with loads of hard work).
Is it a necessity for the Chairman, CEO, etc. to stay on the board during the transition for the business? Can the transition for the business be done without this?
Most investors, myself included, invest in teams and would expect a business transition to include leadership, the key women and men who built the company to this peak point. That’s why we lock people in with mechanisms like earn-outs. In the case of a merger, where there are two strong CEO’s for example, one might take on a new role that capitalizes on her domain expertise (for example CTO) or accept a package to depart.
Once a plan for a sale or re-structuring is put into place, how do the responsibilities board members have to investors and stakeholders change?
As long as a director remains on a board the responsibilities remain the same: fiduciary responsibility, risk management, sounding board for CEO, governance, compliance and ultimately continuing to build value in the business. If a restructuring comes with new board members, then these new women and men will need to be integrated successfully for fit and to capitalize on their talents.
Over decades as a board member for public and private companies, for media funds such as the Bell Fund, for industry associations such as DigiBC and non-profits such as the United Nations flagship World Summit Awards for digital media, are there common themes you’ve seen in terms of how each organization approaches funding and investment?
Yes, so many common themes! First, all good organizations seek funding and investment from like-minded stakeholders. You can’t raise money without alignment and you know you’ve won people over when your intentions and theirs match up. Mature companies and non-profits stick to their mission and to their business plan, refrain from torqueing themselves for funders and instead find funders that are already looking for what they are pitching. Second, for non-profits, gauge opportunities for both core funding and one-off funding, understand the trade-offs and be sure that you are not leaving money on the table.
Some funders want to support at a foundational level, others get excited by pop-up opportunities and still, others want to be asked for funding at every chance. A thoughtful approach to funding and investment, based on research and competitive intelligence, based on relationships and dialogue, always wins the day.
What have been some of the challenges sitting on various boards when it comes to relationships with individual stakeholders?
The best boards are built on mutual respect and value diverse viewpoints. Without exception, all the boards where I’ve served have developed a matrix of expertise across the directors, and support a breadth of talent, including legal, financial, tech, creative, sales, etc. You may not always agree, and there will always be challenges, but if the Chair brings out the best across the board, you’ll come away from every meeting believing the company was well served. Great board directors guide at the governance level, leaving operations to management. Great board directors wear their board hats when at the table, and always put individual interests asides, regardless if they are independents or designates. Great board directors listen, listen to each other, to management, to shareholders — and always keep ears to the ground for fresh ways to grow the business.
Learn more about how to build an effective board of directors throughout your company’s life-cycle on April 10th at TechExit.