A Bigger. Stronger. Faster. Mini-series

In What Makes a Great Board Member, Bill Clendenen, Charlie Talbot, and Michael Burcham explore how high-performing boards are intentionally designed and actively engaged to drive value creation. The series highlights the importance of board composition, relevant operating experience, and strong leadership in aligning strategy and execution. It also examines the mindset and preparation that distinguish effective directors, the trust required between CEOs and boards, and the board’s role in developing scalable leadership. Ultimately, it underscores that great boards go beyond oversight to actively help management build, scale, and create long-term value.

What Makes a Great Board Member: Part I Designing High-Impact Boards

In this episode, Bill Clendenen, Charlie Talbot, and Michael Burcham explore what makes a great board member and how Shore Capital Partners designs boards to drive value creation. They discuss the purpose of the board, the importance of diverse and relevant operating experience, and why board composition matters as much as strategy. The conversation highlights the role of the Lead Independent Director in supporting CEOs, de-risking execution, and translating between management, the board, and investors. Throughout the discussion, they emphasize that effective boards ask the right questions, stay aligned with the strategic plan, and actively help management build and scale the business.

Introduction

Anderson Williams: Welcome to Bigger. Stronger. Faster. the podcast exploring how Shore Capital Partners brings billion-dollar resources to the lower middle market space. This episode is part of a series in which I talk with Bill Clendenen, Charlie Talbot, and Michael Burham about what makes a great Shore Capital Partners board member. This is a follow up to our series featuring Bill and Michael on what makes a great Shore Capital CEO.

Bill, Charlie, and Michael know what a good board member and a good board look like from deep experience, not just serving on boards, but working as Lead Independent Directors for numerous Shore companies, in addition to being executives who’ve had to manage multiple boards over their respective careers.

To lay the groundwork for the series. In this episode, we focus on how Shore Capital Partners builds boards in terms of purpose and design, and how we consider our boards a key point of differentiation in how we invest in and build our companies. Bill, Charlie, and Michael discuss the role of the Lead Independent Director and offer some critical advice on how a CEO can use their board most effectively.

The Purpose of a Great Board

Anderson Williams: Well, welcome Bill, Charlie, and Michael. We’re all here in a very specific context of working with Shore Capital Partners. And so Bill, will you kick us off and just describe Shore’s philosophy on board designs. How Shore thinks about boards maybe a little differently than a lot of folks.

Bill Clendenen: I’ll first start generally and then kind of dig specifically into Shore, but I think the first purpose of the board is to accelerate value creation, right? So why are we doing this? Why are we making this investment? How can we accelerate growth? So that’s one.

I think the second thing that board brings, and particularly ensure’s context, and we’ll talk about it in a minute, but really to de-risk execution. So you put an experience board in place, it helps management see around the corner to minimize risk and the execution of that strategic plan.

And then lastly I think, which is more, I think the, the art than the science of a great board is how does the board provide advice to the CEO and Management and Shore to really help them maximize the growth of the company and the investment.

So what skills do these board members bring to help execute the strategy, you know, leads into how Shore build its board? I think it starts first with how Shore invests. They first identify an industry or sector that they think is interesting. Once that sector is approved, they then identify what we call internally as the Mount Rushmore of executives. So who has experience in this industry, who has led companies that are 3, 4, 5 times larger in size and what we think this company will grow to.

Once they’ve identified those partners, they then start looking at companies and they try to go find these little golden nuggets. These micro cap companies that can really grow. Once they do that, then they make the investment and apply the Shore business system, and then the board works with management to grow the investment for them.

So as it starts out, what does the board do? Accelerate value creation, de-risk execution, and then provide that advice and governance to accelerate the growth.

Anderson Williams: And how? Is this different? Maybe Charlie, you can speak to this. You’ve been around businesses of a variety of sizes, including very large businesses. You’ve been an operator, you’ve been a board member. How does Shore’s thinking about board composition differ from what a lot of people have experienced in terms of boards?

Charlie Talbot: Yeah, I think, you know, back to Bill’s tenants of what we’re trying to accomplish, you know, the next step is to build a board. The key there is you want diversity of experience on the board. You don’t want, as they term, we don’t want five point guards on a basketball team. So you’re always looking for complimentary skill sets, diverse set of backgrounds that can add value to growing the business and can provide unique experiences based on their pasts as well as, you know, sort of the things that they’ve gone through in growing companies to help leverage and the management team to grow faster than they would be otherwise.

Anderson Williams: Michael, will you add a maybe a little bit of color? I think a lot of people who have experienced boards and private equity are otherwise, they often have experienced the perspective being primarily the financial perspective, the board being made up of financial partners and being more oversight. What Bill and Charlie are describing is diverse set of viewpoints, industry experience, and so forth.

How does Shore go about thinking about size, composition, or otherwise when they’re standing up a new board for a new platform?

Michael Burcham: There’s typically two partners in the room, the partner who’s leading the deal, and then a second Shore partner. The members of the investment team that support the lead partner are usually in the room, so there’ll be four to five Shore representatives in the room, but two key partners who are engaging in the board discussion that’s mixed with three to five individuals, a few of which may be early founders who have been acquired. You see, there’s one to two founders who are first in on the board.

One of the boards I sit on, we have four founders, so it’s very founder friendly, and then there’s usually a few folks with industry expertise or scaling expertise, and then the management team. Having all of those perspectives, the perspective of Shore’s investment team, founders, industry experts, and management in the room really helps create a very balanced conversation.

While finance is important, obviously it’s, those are the sort of measures of success that will determine ultimate valuation. The how we go about building the company isn’t limited to what we can see in a spreadsheet. It actually comes from the years of experience of the founders and the industry experts around the table and Shore compliments that with their knowledge of what has financially worked over the last 15 years.

That recipe really helps a new management team know how to navigate growth and scale. Leaning on the expertise of all the other parties in the room. I think that makes Shore pretty unique in that approach.

Bill Clendenen: So in my experience with various other private equity firms, we typically had much smaller boards than Shore’s.

In my other experiences, we typically had three to four, five, maybe at the most member boards. As CEO, I was a board member. We typically have two people from the private equity firm. Then maybe one, what I’d say, friend of the firm, so an operating partner plus maybe one outside expert who was a friend of the firm, maybe they wrote a big check as a part of the investment thesis.

But that smaller board, I found that when I was in the room, that I had the most knowledge and experience and skills in my industry. And so from that perspective it was somewhat limited. And as Shore builds this basketball team where we have a, you know, point guard, a shooting guard, a center, a power forward, a wing forward.

We have these people to come to bear. So when Shore asked me to join Community Care Partners as CEO, I had very little experience in not only urgent care, but in a physician provider practice management. What got me to accept the job was the power of my board. I had six people who I could count on for various expertise within that board, so I had a Chief Operating Officer of one of the largest multi-site, multi-state medical businesses.

I had the physician, CEO of the industry’s largest electronic medical records company. I had two physician PA providers to provide me advice and guidance on medicine. I had a revenue cycle expert. I had all of these experts to come to bear that could help me operate the business as CEO. And so not only did that board provide me with skills, knowledge, and experience beyond my own, but they also became a tremendous resource for me to lean on as we were setting upon this value creation growth strategy.

And so not only did that help me operate the business, but it also helped me recruit other executives so that I could accelerate the growth of the firm. And so that board was really key to the success of this investment.

Charlie Talbot: Yeah, and I think, you know, just to add to the conversation a bit here, you know, some of the boards that were more of a challenge for me were, as Bill describes previous private effort, experience.

You know, folks who didn’t have recent relevant experience to what we were trying to do was, I found not very helpful in the context of these meetings. And so, you know, having Shore put together people who have direct experience that’s recent, that’s relevant and are there to, for one purpose, which is truly just to support the company and the strategy that they’re employing is really very different than anything I’ve ever experienced in my other boards outside of Shore.

Michael Burcham: Having the industry expert in the room will help either validate or management is taking the company or ask the right questions so the management team can assess perhaps some unintended consequences of what they plan to do.

It’s really rare you have that kind of operating knowledge among a private equity investment team, because most of them either come up through iBanking or they came up through the firm itself, but have actually never operationally run a business. So while their questions are thoughtful from a financial point of view, they’re not terribly helpful from an operating point of view.

So having someone with that industry expertise in the room to ask really good operating tactical questions of the intended and unintended consequences of actions either management is wanting to take, or even sometimes the deal team is suggesting, we can save ourselves from a lot of pain by listening to the wise insight of someone who’s actually operated in the industry and not simply look for an answer in the sale of a spreadsheet.

The Role of the Lead Independent Director

Anderson Williams: One of the key roles that Shore has created in the board context is this role of the Lead Independent Director. Each of you is a Lead Independent Director. Maybe Charlie, will you start and then you guys can jump in. What is a Lead Independent Director and how does it function day-to-day differently than perhaps other board members as it relates to the CEO?

Charlie Talbot: Yeah, I think it’s a critical role in the context of these microcap investments and then the Shore ecosystem and how they build things. You know, the LID effectively sits between the CEO and the management team, Shore Capital and the investment group, and the board. From my perspective, one of the biggest jobs of the LID is to connect dots and at times translate for all those different parties who come from different perspectives, different backgrounds, et cetera.

You know, it’s super important to build relationships as part of this role. So as Lead Independent Director, I spend a lot of time with the CEO and the management team directly on the ground with them. And I also spend a lot of time on the phone individually with other directors of the business, just again, trying to connect dots, answer questions they may have generally or very specifically about the business and what’s happening. And that way when we get to board meetings, there’s context, there’s relationships, there’s information that’s been shared that helps guide the board meeting to the appropriate type of discussion and hopefully the appropriate outcome.

Anderson Williams: Bill or Michael, anything you’d add just in terms of helping any of the listeners understand this unique Lead Independent Director role.

Bill Clendenen: So as I think about it, because the Lead Independent Director is so close to management, they participate in the weekly calls between management and Shore, the investment team. The Lead Independent Director, is able to provide what I’d call an inside view of management teams strengths, weaknesses. They’re able to help Shore and the board see around the corner to identify risks that may need to be mitigated. And so that experience of an LID to guide both the board management and Shore through this journey is critical because these LEDs are typically operators, so they’ve run businesses of a similar size, similar industry.

They’re able to give operational perspective to Shore, but also to the board. So what are this team’s capabilities? Are they going to be able to achieve the strategic growth plan that they’ve set out to do? Because oftentimes you can appear like you’re doing the right things and so the LID, because they have the special relationship, can identify issues before they become issues.

Michael Burcham: I think something to keep in mind is that the Lead Independent Director gets to spend disproportionately more time with the company, with the CEO and their direct reports. They often are a way for the rest of the board to be even more informed about the company and what’s happening, because the time we’re together in a board meeting is pretty scripted.

I mean, it’s a four hour marathon of a page turn that if you’re lucky, you get to spend time looking at the quarter and then looking ahead. But there’s a lot of more detailed nuance things you wish you had time to discuss that you just don’t. Most of our Lead Independent Directors are interacting with the CEO, at least by phone, weekly and in person monthly and often on site as well.

So what they learn about the team, the team structure, how well they work together, sort of the nuance issues of operations are going to be dramatically more detailed and more insightful than any other board member is going to have, even someone from the industry. The Lead Independent Director over time will become from a pure board perspective, the most informed person in the room outside the management team.

That creates a massive value to Shore to have someone with that degree of insight so that if there are ever questions or uncertainty or are we thinking this right, doing the right thing, often the Lead Independent Director can bring a degree of insight and knowledge that wouldn’t be found on the deal team and certainly wouldn’t be found with the rest of the board.

How CEOs Should Use Their Board

Anderson Williams: In that same spirit, Michael, what are some of the patterns or misconceptions that you see with a new CEO, a new platform about how to engage or not engage with the board as you’re starting to build this business together?

Michael Burcham: So it’s a great question. I’ve made all these mistakes myself.

The first is just getting too granular and tactical. Boards are there to ask good questions, share strategic insight and lessons learned. But when you get so tactical that you’re defining step-by-step processes, you’re inviting the board to basically design the detail of the business, and they’ll certainly go there with you but for most CEOs, that’s not what you really want.

You want some guidance around directionally where you’re going and good measures of success and lessons learned. You’re not wanting somebody to basically design step-by-step of a process. So I think one thing every CEO should understand is the right degree to which you share detail based on what you want. Now, occasionally you may want that level of granular point of view, but make sure that’s what you want before you structure your sharing in that way.

I think a second thing is often new CEOs try to do all the talking. It’s a classic mistake. Sometimes you’re afraid your team won’t say the right thing, or you want to be so carefully scripted, but honestly, this is a powerful opportunity for your team members who are in the room with you.

To interact with board members and level up their own strategic thinking. If they’re just watching from the cheap seats and you’re the one as the CEO doing all the talking, their opportunity for lessons learned and to strategically grow simply don’t happen. So I would say that’s another common early error of A CEO is doing something like that where they feel they have to do all the talking.

Then I think the third, and then I’ll turn this over to Bill and Charlie for their points of view, is that if you’re gonna ask the board a question, make sure you’re prepared for the answer. When you challenge a board with a question, they assume you don’t know and you want to find out. Sometimes it’s better to say, this is our direction, this is my plan.

Have any of you done anything like that? What were your lessons learned? And if you’re doing it again, what would you do differently? By asking that way you get a whole different set of insight from a board member than if you simply say, what do you think I should do?

Bill Clendenen: Yeah, I would completely agree with Michael on that and one of the things that I would say is don’t present the board with that type of question. You should know the answer. And as Michael suggested, get the feedback specifically. Now, when I was CEO, what I looked at at these board meetings was an opportunity for my N-1’s, my direct reports to get practice for ultimately the management presentations they would do when we sold the company.

So we have 20 plus board meetings over the five year hold. How do we prepare our N-1’s to present to 10 future investors? This board meeting is probably the closest thing they’ll get to a management presentation. And so really focusing on how the management team should prepare, how they present the information, how they interact with the board is critical to, I think, their growth and development as executives.

But use this opportunity, the board, to N-1’s for their personal growth. And this is where I think the Lead Independent Director plays a critical role in this. And as Lead Independent Director, I often do full on prep with the CEO and the management team, and we do one or two complete dry runs of the board meeting.

And so how do you clarify their story? How do you ask the questions that someone in the boardroom is gonna ask? You ask those questions in advance and you help them create present, their story and also help them develop professionally. The other thing that you can do as an LID in the these board meetings is what I would say support the team by revealing nuggets that were missed.

Oftentimes under the stress of a board meeting some an N-1 or CEO might forget to bring something up, but because you’ve got that closeness to the company and management, you can identify a nugget that may be overlooked. And I think the most important role for the LID is actually post board meeting. There’s a great quote we have as CEO, if you complete all of the things that the board suggests that you do in a board meeting, you’re gonna get fired.

If you do none of the things that the board suggests, you’re gonna get fired. So how do you prioritize what is heard? The feedback you get. The constructive guidance that you get from the board. How do you turn that into action? How does it fit in or feather into your strategic plan and your tactics for the next two quarters?

Those are the things where the LID can help craft a better story for the board and management.

Charlie Talbot: You know, one thing that comes to mind as we’re talking here is, you know, in many cases our CEOs, you know, especially early, you know, obviously early in the hold period, don’t have experience with Shore boards and they also, in some cases, don’t have experience with boards in general.

And so, you know, again, back to the role of the Lead Independent Director, I mean, I think it’s really important to try to set them up for success by explaining sort of what the intent of the meetings are, the style and substance of the members, and what they’re trying to get outta the meeting itself as opposed to, you know, sort of having this piece from nebulous sort of task of report outs.

I think the really critical there is making sure they understand that in reviewing the business, it’s important that they describe or they talk about issues that they need help with. So you can use the review of the business as context, but make sure that you flag those issues that you’re thinking through struggling with, and that’s a way to prompt the board to give advice.

A lot of times you just have to go through this a couple times before you understand what the real sort of process is of the board meeting and what. The tone of these board meetings are, and once you get that figured out, then you can really start to impact those discussions and the ultimate outcomes of the board meetings.

How Boards Evolve Over the Hold Period

Anderson Williams: So we’ve talked a lot here in terms of the early days, new CEO, new platform, new board member in place but obviously in this context, we’re talking about a five to six year hold period. We’re talking about rapid growth and evolution. Bill, can you just talk a little bit about how the board has to evolve in the same way the business evolves? How does the board, we’ve talked about differentiation early, but how does the board continue to play an outsized and differentiated role in the success of a platform as it grows and evolves?

Bill Clendenen: I think boards evolve as companies do. If you think about the phases of planting, growing, and harvesting, I think boards at the early planting stage focus often on building the right team and getting the growth initiatives kicked off.

And so what I mean by that is. Is it an M&A strategy? And how are we gonna integrate these businesses early? How are we gonna initiate our organic growth strategy? Who’s the VP of sales that we’re gonna hire the Chief Growth Officer? What marketing are we gonna do to get our organic growth started?

Are we gonna do a de novo strategy? So I think boards in the initial planting phases where they create the most value is helping lift. I think of it almost as scaffolding. The boards can help companies grow faster if they can bring the experience to not only in hiring talent, but also initiating those organic growth strategies or their inorganic growth strategies early.

Then when you transition into the growing phase is how do you accelerate those strategies you’ve laid the foundation for in the planting phase and get operationally efficient? And so this is where boards with exceptional scale have been in that industry can help management teams operate at scale and also operate more efficiently.

Then in the harvesting stage, having board members who have been a part of a private equity sale who’ve sold their company or brought a company public, can really help management understand what are the true drivers and create value at exit. And so, you know, oftentimes I can think of a deal we were once in where we were close to exit and the board said, you know, bill, if we just do one more acquisition here and we add this capability, we’re actually gonna get a higher multiple at exit.

And so, you know, in the last eight months of the hold, we got this target, we found it, we executed in really creative value. And I wouldn’t have done that. I wouldn’t have want to taken that risk if the board hadn’t pushed me to execute on that one last acquisition before we went to market. And it really helped transform the business and gave us a better exit multiple at the end.

Michael Burcham: Like most private equity funds, Shore’s work begins with an investment thesis where the partners of a firm vote and decide they’re going to invest in a business or a business category in the case of Shore. That investment thesis is certainly backed up by great research. But let’s be honest, all business plans are about 75% assumption and about 25% truth ’cause they have not yet collided with the market.

When you collide with the marketplace, all the things you did through your research and your interviews, some of them prove true, some of them don’t prove true. And also every year the market keeps shifting a few degrees on you. So what you believe to be true this year in three years will be a bit different, I think throughout the whole period.

One of the most important responsibilities of board members is to first begin by understanding the core investment thesis that was made and what were those assumptions versus facts. Then ask really good questions and bring market knowledge as a board member that you see the market shifting to the discussion so that we don’t, as a board, keep chasing initial investment thesis when we have learned that half of our beliefs didn’t turn out to be true.

We’re never gonna create great value in a company. Until we have 80 or 90% facts and only 10 or 15% assumptions, you always have a few, but we can’t keep living off of a thesis that didn’t prove to be true. So bringing that market knowledge to the board and challenging early assumptions that don’t seem to be showing up in the business is a really important piece of work for every board member to do, and our best board members understand that responsibility and they take it quite seriously.

Anderson Williams: To wrap up this part of the conversation, I would love to hear just from each of you, if you had to prioritize one to two measures that tell you that a board is effective, that you’ve got a good board in place, what would those measures be? And Michael, maybe I’ll put you on the spot first and then let the other guys think a little bit but what would your.

Michael Burcham: Thank you.

Anderson Williams: You’re welcome. What would your one to two measures of board effectiveness be?

Michael Burcham: I think first and foremost to me is understanding the strategic plan the company has and making sure suggestions, insights shared, are supporting that plan and not sending the management team in a brand new direction. It’s really hard when the company has a plan, and board members are off suggesting things that’s already been ruled out both by Shore and the management team.

So that’s one key measure of a great board, is they understand the strategy. Yes, they’re bringing new insights to every meeting, but they’re not suggesting a completely different strategy every other board meeting, they understand strategically what’s gonna make this company valuable.

I think the second thing is something that makes a really good board is really great questions around the cadence of what the company’s doing operationally, and sharing insights and lessons learned.

I will tell you as a CEO myself, my best board members were never telling me what to do, but they were saying, I tried something like that three or four years ago. Here’s what I did. Here’s what went well, here’s what didn’t go so well, and if I could do it again, here’s what I would’ve changed.

With that insight from two or three members around the table, I can make a good decision for my company without feeling obligated to follow any specific set of instructions from a board member, but I can learn from their experiences and that’s a really great measure of a good board meeting is when they share experiences and it’s less about a to-do list being given to a CEO.

Bill Clendenen: Yeah, I would agree with Michael completely. And I think for me, sitting in the CEO seat, what makes an effective board is, I’d say refining strategic direction. So if you set your compass at, you know, 327 degrees, because that’s where you think the, it’s gonna create the greatest value, and through the discussions with your board, you change degrees 3 to 4% to just be more precise.

What it does, it helps you not only minimize risk and also accelerate growth, but what it does is it helps the management team avoid cycles of operations, right? Every month of the hold is roughly 2%, and so the sooner you can get to these initiatives, the better off it’s gonna be for the company and management. So for me, the number one thing is refining strategic direction in concert with management.

And I think the second thing that Michael touched on as well is. Helping with operational guardrails, right? Understanding when things are not going well. Getting ahead of those things, helping the management see around the corner where you can minimize risk.

Charlie Talbot: Those are all great points, and I’m gonna go fundamental on you, which is, I think the things that start a great board off are one that the board are all present and prepared for the meetings that they attend. Too often people are busy. I understand that, but too often when you have remote board meetings or members who are remote, it just changes the dynamics of the discussion. I think it’s really important that we get people together in the room understanding body language and the conversations that are going on.

And then secondly, I look for engagement between the board members and management outside of the meetings themselves. I think that’s a really good indication of whether you have an engaged and a board that takes on that spirit of being helpful and a resource versus someone who is there showing up for the meetings and you know, sort of doing their duties there.

So I think, you know, fundamentally there’s a level of engagement that I think is really critical and I measure that through attendance and in-person attendance and outside meeting engagement with the CEO management and other board members.

Michael Burcham: So I think all those points of view are really solid, particularly as it relates to a Shore board. I would say from a final view for A CEO, if you’re a board member and you have industry contact. If you have opportunity to link the company with a strategic partnership or another organization that could be complimentary to the company, often an introduction like that can be extremely valuable because many of the CEOs, it’s their first time, they don’t really have the same breadth of contacts that a board member does and and I found as I was running companies.

Board members who took the time to personally connect me with others that could help our business grow were deeply valuable to us. And it actually strengthened the relationship between myself and that board member, because I guess different than critiques or questions at a board meeting, I felt like they were actually helping me build something.

And that feeling of your board isn’t just asking questions or actually helping you build something creates a completely different dynamic for the CEO and their team. So I didn’t wanna stay in the conversation and not bring that up because being in the trench with the management team, helping them build is a rare, wonderful thing that some board members do, but not all. But the few that do, they become the most valued members of the board, particularly to the management team.

Anderson Williams: If you enjoyed this episode, be sure and check out our five-part Bigger. Stronger. Faster. series on What Makes a Great CEO. Additionally, throughout our Microcap Moments series, you’ll find interviews and profiles of successful CEOs, Executive Partners and Lead Independent Directors, including our one-on-one with Charlie Talbot.

What Makes a Great Board Member: Part II Boardroom Behaviors That Drive Results

In this episode, Bill Clendenen, Charlie Talbot, and Michael Burcham build on the foundation of great board design by focusing on how effective board members show up in practice. They explore the mindset, behaviors, and preparation that separate high-impact directors, emphasizing curiosity over judgment, role clarity, and alignment with the strategic plan. The conversation examines what strong board preparation looks like, how directors add value inside and outside the boardroom, and why understanding the CEO’s perspective is critical. Throughout, they highlight how great board members help translate strategy into results, support talent development, and proactively engage to accelerate value creation.

Introduction

Anderson Williams: Welcome to Bigger. Stronger. Faster. the podcast exploring how Shore Capital Partners brings billion-dollar resources to the lower middle market space. This episode is part of a series in which I talk with Bill Clendenen, Charlie Talbot, and Michael Burcham about what makes a great Shore Capital Partner board member. This is a follow up to our series featuring Bill and Michael on what makes a great Shore Capital CEO.

Bill, Charlie, and Michael know what a good board member and a good board look like from deep experience, not just serving on boards, but working as Lead Independent Directors for numerous Shore companies, in addition to being executives who have had to manage multiple boards themselves over their respective careers.

In this episode, Bill, Charlie and Michael define what great looks like in a Shore boardroom, thinking about skills, behaviors, preparation, and values of the board member, and they outline practical ways for current and aspiring board members to grow to meet that standard.

How Great Board Members Show Up

Anderson Williams: To start us off, Charlie, in your words, what defines a great board member in a Shore portfolio company, both in the meeting and between meetings?

Charlie Talbot: I think an attitude of curiosity versus judgment is really important in the way we approach these relationships. You know, I think everyone has experience and they have their biases towards what they’ve done or what they’ve seen done, and I think it’s really important to come into these new situations in the micro cap environment with an understanding that not everything’s gonna be perfect, but what you’re trying to do is ask the questions and learn yourself about what is gonna be most important over the next number of quarters or years during the hold, and just not making assumptions around your experience and what that leads to in terms of how you build that relationship with the CEO and the team.

Anderson Williams: I love the keeping that mindset of curiosity versus judgment and Michael, when you think about the range of roles a board member can and perhaps should play in some combination of a complete board from governance to strategic thinking, to sector insight to talent assessment, to M&A and integration, to capital allocation risk, anything else.

What matters most from your perspective in terms of creating a great board and perhaps a specific board member?

Michael Burcham: So all of those are really important roles the board’s gonna play at some point. You’re asking me to pick which one when I think there’s probably four number ones in that group given the context and time.

But I would say of those that you lay out, really understanding the direction of the company and amplifying that direction with insight is probably the most important. Because so many of the other things you mentioned are actually outcome measures. And if we only focus on the outcome measure and not the direction or work that gets us there, we never quite get to the outcome.

So I would say if I were choosing between those really understanding direction and how that direction creates the value we’re looking for is probably the most important thing because it really helps achieve the outcomes we all want.

Turning Strategy Into Results

Anderson Williams: And Bill, let me ask sort of a nuance of that question. How does the investment team and the board work together to hit on some of those key competencies where it’s not just on the board, but it’s also not just an investment perspective?

Bill Clendenen: I think where the board and investment team work together in unison with the LID is to help the management team drive results. So it’s translating the strategy to results, but as the investment team matures and we understand the growth and value creation plan that we’re embarking upon, translating the plan into action with the board’s help is critical.

And so as I think about how boards play a role is are we going fast enough? Are we mitigating the risks? Should we be making an investment now that’ll accelerate our growth in a year or two years? Right? So, to give you an example, one of the companies I’m on the board of, we’re experiencing a growth stall.

And so the question we have as a board is, should we be doing more or should we be doing less? Should we change out people? Should we be hiring more people? And so just helping the board and the investment team think through those discussions is really important. And with the experience of the board, they can help the investment team make that decision quicker to get the results faster.

Anderson Williams: When you take just that example, I go back to something Charlie said earlier about curiosity versus judgment and also avoiding assumptions based on your historical experience. When you’re thinking about a situation like that in a case where growth is stalling and you’re working together to try to figure out what the right next move is, what are the types of behaviors?

If we’re here to try to define what makes a great board member, what are the kinds of behaviors that separate the best board members from those who are just kind of in the room in a situation like you just shared?

Bill Clendenen: Yeah, I think there are probably five key attributes. I’m sure there are more, but for me there’s five key attributes to being a really great board member and in particular a Shore board member.

And the first is connection. You know, how often do you connect with management and the CEO between meetings? Right? So it’s really about being engaged. Are you an engaged board? One, I think Michael can expound upon as well, ’cause he’s seen it across our entire portfolio but board members who participate in strategy development with management, being a part of that process, helping the plan get refined, I talked about those degrees.

You know, turning the compass in a more precise direction as a part of the strategic plan rather than the board accepting the plan that management’s delivered, I think is very helpful. So be a part of that strategy development. Where I think in my experience, the board members that helped me the most were ones that were willing to help me shoulder to shoulder in talent development and recruitment.

And so as I think about board members in my past who’ve helped me, look, I don’t know what a good CFO looks like. So when I can lean on somebody who was a very successful CFO in an urgent care business at National Scale to help me recruit my next CFO, invaluable. So having a board member who will be a part of developing that talent is incredibly valuable to me as a CEO.

I had a CFO at one of my companies who needed mentoring, right? And we had somebody like Charlie to help mentor that CFO to help them along their journey. So board members who can not only help you recruit and develop talent, but mentor them in their growth as well.

The fourth thing that I think is really important, which is kind of fun for these board members, is engaging in a special project. I once was on a board, and my background is in B2B sales and marketing. And so one of my companies was engaging in a B2B organic growth strategy. And so working with their Chief Growth Officer to help them develop their plans, not only got me closer to the business, but also engaged me in a meaningful and professional way. I loved participating in that project, so I’ve had board members who said, Bill, I can help your N-1 with this project. That’s so valuable to me as a CEO. So that’s the fourth one.

And then Charlie’s talked about this natural curiosity of a board member, and so don’t be afraid to ask the difficult or challenging questions. My most valuable board members as CEO would come in with a heart of good intention, but helping push me and the management team to better outcomes. And so, you know, are we creating or destroying value in what we’re doing, right? And it’s actually in a board setting. I don’t know what Michael and Charlie think about, but it’s actually courageous for you to almost dissent in a thoughtful way, right?

In a way that’s not necessarily destroying of the management team’s credibility, but just I’m curious to why we’re seeing this and don’t be afraid as an effective board member to highlight that challenging question because for me as CEO, that was incredibly valuable.

Charlie Talbot: Just to build on that Bill, I think that the best leaders, including board members that I’ve been around, are very good at practicing situational leadership.

And what I’m really talking about there is they understand where the business is at, they understand where the team is at, and then they understand which approach to take in terms of questioning or digging into issues. Sometimes that can be directive. Many times it’s not. Many times it’s asking the right questions and letting the team get down the path on their own through that questioning.

But I think it’s really important as a board member, especially early stage, as you’re building relationships and building a business in general, to to have an attitude and an approach of being situational with your questions and with your directives or whatever your bias is going into those meetings, based on the conversation, based on the information that you have.

Michael Burcham: I think all board members want to help. The challenge is how to help, and particularly if you are a first time board member, you tend to think what created your success makes you a good board member, and that’s usually not true. So you can’t bring your CFO hat to the meeting. If you are a former CFO, you can’t bring your CEO hat to the meeting because you’re not the CEO.

Even investors sometimes lose their identity as a board member and they behave as an investor in the meeting rather than a board member. That’s when lots of dysfunction occurs. The job of a board member is not the job of an investor. It’s not the job of a CFO. It’s not the job of a CEO. It requires a very holistic view of the company.

And actually, I find the preparation I need to do before I walk in that meeting as a board member is as big, if not bigger than what the CEO had to do because I have to get myself up to speed in thinking about every facet of the business, not just my own journey and the things I’ve done.

So I think what makes a really good board member is to know your role. And when you walk in that meeting, regardless of what role made you successful in the past, remember you’re there to be a board member.

How Great Boards Prepare

Anderson Williams: I wanna pull that thread just a little bit, and any of you who wants to respond can, but this idea of, you’ve mentioned good intentions, you’ve mentioned situational leadership, you’ve mentioned a board member’s own history and success and all of these things.

But at some point, the time in a board meeting is so valuable to the direction of the company and to get critical conversations out and agreed upon. What does good preparation look like? Michael, you mentioned becoming in prepared in some ways even more prepared than the CEO or spending more time. What does that even look like?

Maybe since I’m pulling on that thread from you, Michael, you start and you other guys can jump in, but what does that preparation look like?

Michael Burcham: Well, I’ll start, but you know, I’m in the room with two awesome board members, so let’s hear from everybody on this. When I prepare, the very first thing I do is I remind myself of the original investment thesis and the strategic plan we have in front of us.

’cause everything that I do in that meeting should either amplify that or if I think the market has shifted on us, I have a responsibility to bring up that question and say, are we sure the direction we’re moving still works in spite of what we’ve learned? Everything else from the team, to the operations, to the growth plan, whether they’re doing M&A, de novo, all that is secondary to making darn sure that that strategic plan is still valid. Then everything fits under that.

The second thing I’m typically doing is I’m looking. At the KPIs measures of performance, and I’m saying, do these measures reflect health in that growth or direction of that strategy? And typically, you know, at Shore we love to measure things, so we’ve gotta measure for just about everything.

So I can quickly scan the things we are tracking and see is this team understaffed or overstaffed? Do I think that there are challenges in organic growth? Are we dragging on M&A? Are we failing to integrate? And while I probably have an opinion of all of those. I have to remind myself what are the questions I’m going to ask of management around those, rather than saying, I think this is wrong.

Anderson Williams: Charlie, how do you prepare?

Charlie Talbot: Similar to Michael in that I start with the strategic plan and I use that as the guardrails for how I’m going to sort of review the materials that come out in advance. And what I look for is does the discussion topics and the details to support line up with that strategic plan. And if they’re out of bounds or they’re close to the guardrail, then I make notes of that and I try to frame up the questions that I’m gonna ask during that discussion to make sure that we are, you know, aligned with that plan. Or if there’s been deviations that we have an active conversation around those things.

The other thing is I like to look at the materials in the context of who’s going to be presenting and you know, how they go about putting their thoughts on paper. I think it’s really an important skill set to have as you go through this too, as the N-1s or the CEO develop that they’re able to convey thoughts in a succinct fashion with less words than more, and get the point across on the slides, because I think that just leads to a much better discussion in the meeting itself.

But again, I, my preparation is writing down every question that I have in the materials. Some cases they cover ’em. I don’t need to ask ’em, but in other cases, I wanna make sure that I remember what I’m focused on.

Bill Clendenen: I would agree with both Michael and Charlie’s assessment that the strategic plan is critical. And I, as I think about it, some of the least successful board meetings focus on the rear view mirror versus the windshield. And so as you think about board preparation, I think the sooner you can get past the rear view mirror and focus on the windshield. And understand what stories are being told by management, and then helping them not only craft and write that story, but hold their hands or put scaffolding around them so they can accelerate their journey.

And for me, the most critical question I am asking in these board meetings is, how’s the team around the CEO? Oftentimes, in my experience, the team, the CEO has around them helps dictate how quickly the team is executing on that strategic plan. And so, is that person in that seat capable of continued growth? Are they approaching their limits? Should we consider a new person in that role?

So for me, one of the things that I look at a lot in addition to all the preparation and work that Michael and Charlie talked about is the team, the team, the team. I think one of the best things that board members can do because they have pattern recognition, having grown and scaled their own businesses, is understanding can the person in that seat do the job now for the next two years, the next four years or beyond?

And so I think for me, that viewpoint is critical in being in the board meeting.

Anderson Williams: When you all think about a perspective or an emerging or new first time board member, what’s the advice you would offer them from a growth and development perspective into that role to being the most successful board member they can be?

If you had to just pick again, one or two things that they should really focus on in improving themselves in this experience, what would those be? Maybe Charlie, I can start with you.

Charlie Talbot: Well, I think to start, the more you can get to know the Shore team, spend time with how the team thinks and operates. Great avenue for that is to attend an Operating Partner Summit. But the more you can build relationships and understand how things work at Shore, the better off you’re gonna be. You’re just gonna have a foundation for sort of walking into these situations and understanding sort of how things work.

I think it’s always really important to get connected with other board members around the Shore ecosystem, and I would really focus on LIDs as a starting point because as you learn about what it takes to be a good, effective board member at Shore, I think just get an understanding of the people who have had success there and how they think about their roles and what they bring to the table with these roles is really important.

So I think there’s a lot of opportunity to do that, and I think those who take advantage of it. Definitely benefit.

Anderson Williams: Bill, what about you? What would you offer as advice for growth and development for a board member? New, emerging or perspective?

Bill Clendenen: I think of two things in particular. Charlie mentioned one about attending an Operating Partner Summit.

I think another way to get to know the Shore investment team better is to go on the road and help one of the deal team members work on their investment thesis. So what sector are they going to? What Shore is a very, very thematic investor? And so understanding why Shore wants to invest in this space, but not only just why that particular space, but the process through which Shore makes these investments, I think is important.

So it’s, Charlie said, attend an Operating Partner Summit, go on the road with an investment team member and help them develop a sector thesis.

I think the second thing would be is ask to attend a Shore strategic planning session, even if it’s not your own board, just understand the rigor and thought and detail that goes into those. Really, I think will give you a unique perspective on how Shore operates these businesses once they make the investment.

And so I think if you’re a new or emerging Shore board member, go on the road with the investment team and attend the strategic planning session are probably the two fastest ways to learn more about what Shore’s trying to accomplish.

Michael Burcham: I love both of those answers. My advice if you are a new board member, is seek out our best performing CEOs and the partners of those best performing companies and ask them what makes a great board member for you? Because you’re gonna get some insight directly from a CEO or from an investment partner that will help you be a great board member.

I can almost predict what they’re going to tell you, but go ask, interact with them, talk to them, and you’ll find out what really helps a CEO and investment team have a high performing board, and it’s often not what you think. The best thing to do is talk to some of our best performing companies and the investment partners on those companies, and they will tell you straight up what you could do to optimize your position on a board of directors at Shore Capital.

Impact Beyond the Boardroom

Anderson Williams: So I wanna ask one last question as we think about what makes a great board member. We’ve talked about the relationship and we’ve talked about what it looks like in the meeting and what it looks like for preparing for a board meeting. I just want to take a minute here to wrap things up and say from your perspective.

What do the best directors do outside of the boardroom, outside of the board meeting to support CEOs, to support the success of a company? Just any insight, maybe Bill, we’ll start with you. Any insight on what the best directors do in the time outside of the meeting?

Bill Clendenen: So we get it from two perspectives.

One, as a former Shore, CEO, what was beneficial to me and secondarily, what, as a board member, how I think I can be effective. I think first is having a regular cadence with the CEO. On all the boards that I’m a part of, whether or not I’m an LID or just a regular board member, I schedule calls as an LID every week.

But outside of that, when I’m just a board member, I schedule a call every six to eight weeks with my CEO and try to get ahead of challenges that they’re facing before the board meeting. So I want to know where I can help.

Do they need help in recruitment of A CFO? Do they need help with the organic growth strategy? Do they have a marketing initiative that they’re stuck in that I can maybe leverage some of my background and experience in?

And so again, I think it’s that constant touch point with the CEOs and management teams between meetings that not only gets you a better understanding of the management and company, but also the challenges they’re facing and the growth.

And you can then bring that to bear in the board meetings ’cause when you as a board member can understand how the management is thinking about approaching a problem, it allows you to be a better, more effective board member.

Charlie Talbot: I think it’s important from an engagement standpoint and a continuity of engagement standpoint. I think that’s really important from a relationship perspective. One thing that I would strongly suggest in those situations is for board members to come to the table with a topic for discussion. You know, CEOs in these businesses are so busy, and I think, you know, not the top of their list is to have what I’ll call a social call with the board member just to check in.

What I found has been super helpful is when a board member comes in, whether it’s with an industry writeup or a conference that they’d have been to that’s relevant, something to bring to the conversation that creates engagement in that conversation. I think that opens the door to future interactions with CEO, you know, adding value. Figuring out the best way to do that is really important and I think provides, um, great platform for future conversations.

Anderson Williams: And in that sense, sort of not just waiting for the CEO or someone else to come to you for help, but being.

Charlie Talbot: Correct.

Anderson Williams: Yeah,

Charlie Talbot: I think proactive sort of engagement with value is really important.

Michael Burcham: I would amplify what Charlie just said. When I see something happening in the market, an industry report or something I think would help the management team, I try to send it to them immediately and with no judgment, just say, I saw this, thought of you. This may have some impact. Thought you might wanna see it and see what you think.

I would say for me as a board member, what I love to do is to talk to the CEO about 72 hours before the board meeting, and I ask them, what would success look like for you at this end of this board meeting? It’s a real clarifying question ’cause there’s a lot of things will be discussed, but most CEOs have one or two things in mind when they’re walking to a board meeting that says, I really hope we can get to this topic.

I really want to get this done. And if I know what that is, and I know how they would define success for themselves as the leader. If I don’t see that topic coming up, or if I feel like we’re getting pressed for time, it’s much easier for me as a board member to say, you know, I know you wanted to talk about this and we’ve not made time.

Could we pivot to that discussion? That’s easier for me to bring up as a board member than often for the CEO who feels they’re following a script. So that would be my advice also, is, you know, just check in if a day or so before ask what success looks like. You’re gonna get a really solid answer that’ll help you walk into the meeting and offer your best support to that CEO and their team.

Anderson Williams: If you enjoyed this episode, be sure and check out our five part Bigger. Stronger. Faster. series on What Makes a Great CEO. Additionally, throughout our Microcap Moments series, you’ll find interviews and profiles of successful CEOs, Executive Partners, and Lead Independent Directors, including our one-on-one with Charlie Talbot.

What Makes a Great Board Member: Part III Turning Boards into Strategic Assets

In this episode, Bill Clendenen, Charlie Talbot, and Michael Burcham explore how CEOs can turn their boards into true strategic assets. They share practical guidance on building trust through transparency, setting realistic goals, and engaging board members outside the boardroom. The conversation focuses on how effective CEOs pressure test strategy, avoid surprises, and translate strategic plans into clear operational execution. Throughout the discussion, they emphasize that strong CEO board relationships are built on consistency, preparation, and open dialogue, enabling boards to support leadership, execution, and long-term value creation actively.

Introduction

Anderson Williams: Welcome to Bigger. Stronger. Faster. the podcast exploring how Shore Capital Partners brings billion-dollar resources to the lower middle market space. This episode is part of a series in which I talk with Bill Clendenon, Charlie Talbot, and Michael Burcham about what makes a great Shore Capital board member. This is a follow up to our series featuring Bill and Michael on what makes a great Shore Capital CEO.

Bill, Charlie, and Michael know what a good board member and a good board look like from deep experience, not just serving on boards, but working as Lead Independent Directors for numerous Shore companies, in addition to being executives who have led and had to manage multiple boards themselves over their respective careers.

In this episode, they get really practical about how a CEO can best leverage their board for strategy, talent, and execution. They talk about what to do, what not to do, and how to turn a board into a real strategic asset. In other words, how does a CEO use their board? Well, so Bill, from your experience, when we say use the board well, what does that look like?

What’s a CEO doing or not doing that’s using the board well?

Bill Clendenen: So one of the things I think a CEO’s primary job is in his or her relationship with the board, is to not only protect your own personal and professional credibility, but also your teams. And so I think being able to talk about the hard issues without necessarily rose colored glasses, that transparency not only gives you credibility as you have these difficult discussions. Over 20 plus board meetings, setting this foundation early is really important.

So I think that’s the first thing you need to do. In my experience, CEOs often get into trouble when they set unrealistic or unreasonable goals. And so as you think about Shore, and its focus on setting annual quarterly goals, setting an annual budget, be realistic.

And so as I think about boards that I’ve been on, oftentimes if the CEO and management team create unrealistic objectives, goals, and a budget, it’s often very hard for management to get ahead of the future. And so as I think about a great way for a CEO to use the board well is have the board pressure test your budget pressure, test your objectives. What does that look like?

The other thing I would say in using a board, and I encourage all of my CEOs that I am a LID for is to create board profiles. So when I was CEO, I had essentially a dossier on all of my board members. And what I would do is if I was struggling with something or had a question about something, I could have, a quick sheet that I could refer to is maybe they had an experience that could help me here. So that was one.

The second thing I would do is I would create quarterly check-ins with each and every one of my board members. And what I would do is I’d create a mini agenda. I’d block off 30 to 45 minutes for each call. I would send it to them a couple days in advance, ask for their input and insight on a quarterly basis.

What that allowed me to do is develop strong relationships with my board, which actually then translated in the boardroom, right? Because a board member could say, I’ve been working with Bill. He’s been struggling with this. This is where I think he’s at. It really helps build your and your team’s credibility if you lean there.

So, I’d say a couple of the things that have been very successful to me is leveraging your board in a meaningful way, and that means pressure testing your budgets and your objectives and your strategic plan. Then also bringing the board under the tent with you as a CEO. What are your challenges?

Using the Board Strategically

Anderson Williams: Charlie, when you think about what Bill’s describing there, how does a CEO think about prioritizing that time? As compared to the infinite other seeming priorities in a way that sounds great, but I suspect when you’re sitting in the CEO seat, it’s really hard to think about managing and scheduling 30 to 45 minutes with your board. Talk a little bit about how, maybe we can reframe the thinking about the value of that time and the importance of that time of for a CEO.

Charlie Talbot: Yeah. I view it as a really important investment for the team. One thing that derails us in terms of just sort of running a business and operating efficiently is when you have outside influences that start sort of pushing you in directions that you shouldn’t be going.

If you have those relationships with board members and you invest the time to bring them along with your thinking you reduce the chance of being pushed in a direction that will create, you know, sort of disruption in the business and ultimately waste time in what we’re trying to accomplish.

So I think as a rationale for making these calls and as, and building the relationships, taking the time to build the relationships, it’s really viewed in my mind as an investment to making you more efficient as a team.

Michael Burcham: What Bill and Charlie are describing is this notion of taking time throughout your week to have at least a small window where you work on the business and not just in it. And these conversations with board members are sacred time when you’re actually working on your business, not just in it.

The job of a CEO is pretty lonely, I would think most CEOs, if they’re really honest, have 1,000,001 things they can’t talk yet to their management team about, ’cause they’re just formulating in their mind whether it’s a worry or even an opportunity. Both have a timing sequence of when they’re shared or otherwise they’ve become distracting of the work of the day.

So having a board member you can bounce some of those ideas off of is a really important part of the relationship. I think some of my best interactions as a CEO is when I would schedule a time with a board member and I would just simply ask them to play devil’s advocate with me that here’s what I’m thinking.

In your experience, what could go wrong here? How might I de-risk this? What might I be missing? How could I make this even better? And I reserve the right to make my own call, but if I just give them permission to play devil’s advocate, well ahead of the board meeting one, I won’t get that kind of odd reaction in the meeting ’cause I’ve got it ahead of the meeting and I’m probably gonna be better prepared.

So to me, asking a board member to play devil’s advocate on an issue you’re worried about or an opportunity you’re considering. Can be some of the most fruitful conversations you can possibly have with any board member, ’cause they’ll all have a slightly different view. And if you hear them all out, you’ll probably get a spectrum of ideas or thoughts that the truth for you is probably somewhere in the middle of all that.

Keeping Strategy Front and Center

Anderson Williams: You guys have each described the importance of alignment with the strategic plan. How should a CEO think about proactively and actively keeping the strategic plan present in board communications in this board engagement conversations? How do you keep the board not just sort of, we built the strategic plan, we present it to the board once and assume they’re aligned over time until we refresh it. But what do the most successful CEOs do to keep that strategic plan present in their board conversations?

Charlie Talbot: I think that it starts with how you organize the discussion and the materials around the org discussion. So I think it’s a really great practice to remind, you know, board members come in quarterly, sometimes they’re doing a lot of things in between, and so I think it’s worth the time to just reacquaint everyone with the strategy that you’re running against.

Then I would just make sure that your board materials follow that strategy, and I think it’s a good way to organize your thoughts and your team’s thoughts around how you wanna present the business. It’s also a really important way in the context of engaging board members to remind them what it is you’re trying to accomplish.

Michael Burcham: You know, each of our companies will have three to five strategic initiatives or objectives for that year, that build over time, because our whole period’s about five years and they become more sophisticated every year. I think having that listing in the front of the deck and a status report on each initiative. It doesn’t have to be lengthy, but just where we are with that is a really good reminder.

Something I’ve seen a few of our CEOs do on the boards I sit on that I really appreciate is when each team member’s giving an update, whether it’s human capital or operations or finance, they refer to which of their strategic initiatives their update is addressing.

That’s really powerful because even before they start talking about their update, I get a subtle reminder, oh, this ties to this growth initiative. So as I give feedback, I should keep in context of that when I’m giving thoughts, so I don’t just give random suggestions that aren’t tied to the strategy.

Those are two I’ve seen that work really well is a really concise right up front in the deck. Says, here are three to five we’ve agreed on and a status of where each is. And then as each team member is presenting their functional area, a general reminder to the board, here are the two or three strategic initiatives that my report today reflects.

Bill Clendenen: It’s a great question and I agree with both what Charlie and and Michael said, and as a CEO, it’s your job to translate the strategic plan into these operational initiatives that then tie to the budget, that then tie to the KPIs that tie to your annual goals, that tie to your quarterly goals. And so this is where the science of strategic planning translates into art.

And so how you align not only the board but your management team in Shore along those initiatives is critical. And so I think as a board member, as a CEO, you have to cascade that strategic plan into actionable time-bound milestones with accountability to specific management team members who need to execute on those initiatives.

And so translating the strategic plan into operational plans is one of the hardest things that new CEOs, do Michael and your team at Shore here help with that strategic initiative development. And then you have to execute it. So I think the challenge for CEOs, particularly new ones, is how to translate strategy into action.

Michael Burcham: Good point.

Charlie Talbot: To build on that. It’s a great point because a lot of times N-1s don’t necessarily have as much exposure as CEOs or people who have more experience in these settings, so it’s really important for the CEO to coach their N-1s to make sure that what they’re talking about is in alignment with how the strategy’s been laid out.

Really, really critical.

Building Trust and Avoiding Surprises

Anderson Williams: Fundamentally, as I listen to you all and think about the role of both the board and the CEO, you’re establishing a really critical relationship for the success of the business. And in addition to, you know, managing the meetings well, preparing and so forth. When you’re in a newly forming relationship with an often first time CEO and you’re on the board, what are one or two things that you’ve observed a CEO do that are the things that really helped you build that confidence and that trust early that this person had things managed, or there are a couple of things that you’ve seen the best CEOs, regardless of age or experience or industry do that made you feel really confident as a board member.

Charlie Talbot: I’ll start. I think the biggest thing for me is that the conversations that happen where the CEO’s not talking as a board member, when I see the functional leaders, the N-1s are on the table talking about the business in a way that is fully aligned with the strategy and focused on execution with the right KPIs in place, then I know that things have been dialed in pretty well from the CEO chair.

That’s, to me, is the biggest tell.

Michael Burcham: So consistency of behavior is the first thing I look for. Inconsistency destroys trust. Consistency builds trust. And that’s true with the team and that’s true with the board. If I’ll observe a CEO inconsistent in the way they follow up, in the way they reach out to me, in the way they run their meeting, I know that it’s 10x amplified with their team and I’m worried.

So consistency to me is the number one thing I look for because if that CEO is. Really consistent with the board, I feel like they’re probably consistent with their team and that consistency will create a bond of trust, that they’re really open, honest, and transparent with one another.

I think the second thing that builds my confidence is when things aren’t going well, rather than a litany of excuses. I hear actions. This is what I plan to do. This is what happened. We did not expect it to happen. Yeah, it’s bad, but here’s what I’m doing about it. That to me is like, alright, I can get behind that. But if all I hear is excuses of why it didn’t go well and nothing that says, this is what I plan to do going forward.

I get nausea really fast as a board member. ’cause excuses are cheap. Action and taking action is what’s gonna get rewarded.

Anderson Williams: On the flip side of that, when you think about CEOs you’ve struggled with in terms of leading the board, building that kind of trust or that kind of confidence or otherwise, what are some of the kind of anti-patterns that are those red flag concerns?

Michael, you just mentioned inconsistency would be one of those patterns. Are there other patterns that are kind of red flags or watch outs for you?

Michael Burcham: Yeah, so the biggest one is the CEO who always has all the answers ’cause none of us, even us board members don’t have all the answers. So when you’ve got the answer to every single question or you’re even interrupting your team with a more eloquent answer, I worry for you ’cause nobody’s that smart. And if you think you’re that smart, you’re probably not listening to good counsel. So that’s a red flag for me.

Also, any CEO, particularly our first time CEOs who put on this persona that everything is. Perfect worries me because I know on a daily basis they deal with anxiety, disappointment, let down, fatigue. I know the sacrifices they’re making for their family. Most first time CEOs are filled with imposter syndrome, and if I don’t see a little humility coming through and someone who has that sense of self-awareness. I know that their emotional intelligence even of themselves is pretty low, so I’m going to assume that that insight to their team and their customers and everyone around them is equally low, and that’s another big red flag.

Bill Clendenen: For me, to follow up on Michael’s comments, I want to see the CEO with their hand on the helm. I want them to be in charge of the meeting. The Shore look, the buck stops with them. The CEO’s in charge and so how do you create trust, develop relationships? A lot of it boils down to time, right? And so as you progress through this five year partnership, time will help you develop those things.

But there’s some things that I think you can watch out for, right? Things that I watch out for in the ones addition to Michael talked about are surprises. CEOs who keep their cards tight and don’t get ahead of problems, lack humility. And avoid having the hard discussions. That’s a watch out.

Sandbagging the, you know, the opposite of, you know, oh, we’re gonna downplay the budget and they’re always hitting the number. You’re probably not being pushed or stretched enough. And so at the end of the day, I don’t think they will be as successful as CEO, uh, at the end. I see this also in some board meetings, particularly in the early stages where we’re only getting what I call headline only updates.

I don’t see the work behind the headline. And so as a board member, not only do I wanna see the headline and the conclusions have been made from that, but I also wanna see their work. And so what are they providing to help me understand the problems that they’re facing?

And the last one, because I’ve been a board member, an LID, and a Shore CEO, I think it’s really important that the Shore, CEO, own the relationship with the board. Don’t delegate that relationship to the CFO. Don’t delegate that relationship to the LID. Don’t delegate that relationship to the investment team.

This is your board. These are your people. They are behind you a hundred percent until they’re not. So use him as effectively in developing your strategy and execution plan.

Pre-Wiring Decisions and Board Dynamics

Anderson Williams: I have to believe that when you’re thinking about trust and relationships and the opportunity for red flags or otherwise to surface, that’s often in some of the more complex decisions that you’re facing as a CEO, where maybe you’re tested in ways that you haven’t been tested. Maybe you don’t feel as confident as you would in other decisions.

You mentioned avoiding surprises. Bill, if I’m sitting in the CEO seat and thinking about navigating my board, how do I pre-wire complex decisions to make sure there aren’t surprises, but also to make sure we have the right transparency, we have the right amount of debate and so forth. How do I get ahead of those kind of more complex decisions?

Bill Clendenen: Some of those things we’ve talked about is tips for managing those relationships. So if you have quarterly calls with your board members, if you have effective monthly calls with the board as it relates to financials or M&A, your weekly calls with Shore, all those things should avoid those surprises, but you’d be surprised that sometimes that always isn’t the case.

And so one of the tips that I find really useful, Michael talked about it earlier, talk to your board 72 hours before the board meeting, they’ve received the deck pre-wire, or let them know, Hey, this is gonna be an issue. Let’s talk about it. The way that I most effectively manage these things is what we call the pre-board meeting dinner.

So you get your board in a social setting and you personally work the room to identify issues that either you or your team is facing and just pre-wire before the meeting even starts.

Another technique that I’ve seen CEOs use effectively is having a pre non-executive board meeting where most non-executive sessions occur after the meeting, the CEO can ask the board and the chairman to have a pre non-exec session where you can identify some of the issues privately with the board before opening that issue up in the middle of a board meeting.

So those are some techniques and tips that I found useful.

Charlie Talbot: A couple things to add to that. One is, and this is where you can really use your Lead Independent Director to support what you’re asking about Anderson.

So one of the things as a Lead Independent Director, I connect with our CEO weekly, but then a couple weeks before the board meeting, I have one-on-one reach outs with all the board members. Really, there’s no agenda from my perspective. It’s just a simple, what questions do you have around the business?

This is in advance of them getting board materials. So it’s really just basic, fundamental, general issues that are on their minds. And while I’m not trying to have the board meeting in advance of the board meeting, I am trying to gauge where their questions and potential concerns are. That way I can sort of, I can manage that back towards the CEO and make sure that he or she is aware of where the board members’ heads are at.

I think that’s not hard to do, but it’s a really easy way to get the conversation directed or to get in front of issues. In some cases that just the coaching of the CEO is, Hey, you might want to get in front of this with this potential board member in advance of the, of the meeting if there’s a real concern.

So I think there’s this communication is critical. I think that use your Lead Independent Director, and I think that just making sure that, as we’ve all said, there’s an attitude of no surprises when you get to a board meeting.

Michael Burcham: The issue of bringing a complex issue to the board requires some pretty thoughtful preparation.

Most of the time, if it’s going to go poorly, it’s because the CEO is taking too big a bite, and the board is learning about the issue and hearing a plan all within 10 minutes with no time to think about it. You’re gonna get emotional, visceral reaction if you do that as a CEO. And it may not be pretty.

You would do better to talk to board members in advance, and then when you come to the board meeting to follow up on Bill and Charlie, say, today we’re bringing this up because we’re going to be assessing this. We’re not looking for a decision today, but this is how we plan to assess this. And over the next few weeks, I’ll be bringing you our assessment with a plan.

And if you’ve talked to board members, you should say, and I had the opportunity to talk to Bill ahead of the meeting, and here’s how Bill asked me to think about this. And I had the opportunity to talk to Charlie ahead of the meeting and here’s how Charlie told me to think about it. So you basically are validating your board members’ support for how you’re gonna proceed before you ever open it up for any discussion.

That kinda neutralizes the negative news if you’ve done it in advance and cut it at least into two parts. We’re gonna assess, we’re gonna bring you back our findings, and then we’re gonna propose a plan. And even when I proposed a plan, I’ve done the same thing all over again. And I know Charlie’s already weighed in on the plan bill’s already weighed in on the plan. A different board member’s already weighed in on the plan.

That’s so much smarter than hitting the board with new concepts on a complex issue that could change the direction or course of the company. That’s never a good thing.

Anderson Williams: Well, and you, you led me, Michael right to my last question for this episode. Uh, and thinking about CEO and best ways to engage with the board, when you brought up the emotional and visceral reaction that can emerge from a board, I mean, let’s be honest, you’ve got experienced, knowledgeable, confident, probably pretty strong personalities in a boardroom. It isn’t like you always have complete control of the meeting or the conversation.

So to wrap this episode, what do you do as a CEO when you feel you’re losing control of the conversation or the meeting and the board starts to take over?

Charlie, maybe I’ll start with you, but any tips for just that reality where you’ve accidentally triggered a bigger question than you intended to trigger? You’ve triggered emotions you didn’t intend to trigger, stuff happens. What do you do?

Charlie Talbot: Well, one thing is just to be open about it and just suggest that you may have triggered something that you didn’t intend to, and you’d love to get the meeting back to the course that it was on before. That may or may not work, but it’s, it’s always at times worth a try.

I think a couple things. One is this is where a Lead Independent Director can help to be that bridge between the board and the CEO and good Lead Independent Directors will sense that and they’ll be able to redirect the conversation either by taking it offline or, or having a follow up or whatnot and getting the meeting back to where the CEO wants to take it.

But you know, I think, so that’s one option. Other than that, you know, Bill, I’d love your perspective, given that you probably were in that situation before

Bill Clendenen: many times. You’ve never had it happen. I’ve never had that happen. Um, I, I have a more tactical approach. I call for a quick bio break and then redirect with a partner and the Lead Independent Director and say, how do we want to push this, right?

Because oftentimes, you know, Michael talked earlier about really what we value and board members and sometimes, board members have a perspective from the rear view mirror that they bring to bear onto the company. And in that situation, if the Lead Independent Director, CEO, and board member, I mean, uh, investment team member wanna redirect, I think it’s oftentimes the three together in partnership.

Essentially putting a fence around. It’s usually a board member with a particular experience that was negative for them that they’re bringing to bear on this company. And so unless it is a true measure or experience that is of benefit that we want to table for a future time, I find that partnering with the LID and the investment team leader, the partner in corralling that situation is most effective.

Charlie Talbot: Yeah, I agree.

Michael Burcham: I usually would say something like this. This topic clearly requires a good hour of our time, and we don’t have that today, and my team is not completely prepared to answer the questions you have. We’ll be setting up a call next week for all of us to talk about this one issue and we’ll all we’ll be sharing information with you in advance.

That doesn’t dismiss the topic, but instead it says it’s worthy of time. We just don’t have time today. Then before I do that next meeting, I’m certainly going to follow up with each board member, get their temperature on it so that I’m completely prepared.

Something that though this triggers for me to think about, and I think it’s helpful as part of this podcast, is that people have patterns of behavior, whether you’re a board member, an investor, a CEO, and if you’ve got a board member who constantly has this pattern of disrupting a board meeting. By asking either questions that should be obvious, the answer or it’s clear they did not read the material, or they’re just naive to the whole business.

You’d be so much smarter as a CEO to go ahead and do your one-on-one with them as though it were their own little board meeting ahead and simply say, here are the three topics I plan to bring up in a few days. What are your questions? What do you need to know? What are you worried about? Can you get behind me and support me on this before they walk in the room?

Force them to be prepared. And is it will likely avoid the disruption. And I think my final thought on this is there are board members who just love to give you suggestions. They just are like a big old suggestion box of to-dos. I usually have somebody on my team keeping that list and then I will reach out and say, Bill, you made these 10 suggestions at the board meeting. Let’s go one by one. Here’s how we evaluate it. Here’s what we can and can’t do. And I go through it at nauseum.

If I start to do that. Bill will be much more selective about his questions in the future, and it’s just a great way to inversely teach someone how to be a good board member and stay in the lane of a board member and not trying to be your shadow as the CEO.

Anderson Williams: If you enjoyed this episode, be sure and check out our five part Bigger. Stronger. Faster. series on What Makes a Great CEO. Additionally, throughout our Microcap Moments series, you’ll find interviews and profiles of successful CEOs, Executive Partners and Lead Independent Directors, including our one-on-one with Charlie Talbot.

What Makes a Great Board Member: Part IV Coaching N-1s and Building Scalable Leadership Teams

In this episode, Bill Clendenen, Charlie Talbot, and Michael Burcham focus on the critical role N-1 leaders play in building scalable companies and how great boards evaluate and develop that talent. They discuss why N-1 engagement in the boardroom strengthens succession planning, sharpens strategic alignment, and prepares leaders for larger roles. The conversation explores how CEOs can coach and position their teams for success, when to elevate value-creation roles versus hygienic functions, and how boards assess whether executives can scale with the business. Throughout the discussion, they emphasize that effective boards don’t just oversee performance but actively help build the next generation of leadership.

Introduction

Anderson Williams: Welcome to Bigger. Stronger. Faster. the podcast exploring how Shore Capital Partners brings billion-dollar resources to the lower middle market space. This episode is part of a series in which I talk with Bill Clendenen, Charlie Talbot, and Michael Burcham about what makes a great Shore Capital board member.

This is a follow up to our series featuring Bill and Michael on what makes a great Shore Capital CEO. Bill, Charlie, and Michael know what a good board member and a good board look like from deep experience, not just serving on boards, but working as Lead Independent Directors for numerous Shore companies. In addition to being executives who have had to manage multiple boards themselves over their respective careers.

In this episode, they focus on the N-1s or the direct reports to the CEO. They talk about why N-1 engagement matters with board members. And what it illustrates about the business and what it illustrates about the CEO. They talk about how to ensure your N-1s show up and work effectively with the board of directors.

Why N-1 Engagement Matters

One of the things you all have mentioned in the context of board meetings is the engagement of N-1s and how the CEO should think about that and how you as a board member look critically at how engaged and aligned N-1s are. When you think about that, Charlie, why does N-1 engagement matter to you as a board member?

Charlie Talbot: I think it’s critical for a bunch of reasons, including succession readiness, depth, you know, the dialogue that’s taking place and that should be taking place in the business. And then just alignment around strategy. Just hearing at the board meetings is really important.

I think it’s really important that those messages come back unfiltered to a great extent with anyone’s poor intentions, but sometimes there’s a tendency to filter certain messages or potentially just forgot what messages were delivered, and I think N-1s, having that direct feedback from the board allows them to just be more thoughtful and do their job better. And I think they see what good looks like. They see what less good looks like in the context of those meetings, and they’re better prepared for the next one.

Bill Clendenen: I also think that it’s a great training ground and practice ground for ultimately the exit process management presentations. There are 20 plus board meetings in a five year hold. This is an opportunity for these N-1s to flex their presentation muscles to answer thoughtful questions from experience industry executives to have a seat at the table to understand what goes on.

It’s also a development opportunity for them because many of these N-1s ultimately would want to become a CFO, a CEO, president of a business and so getting this experience is critical for their personal and professional development.

Charlie Talbot: One thing I’d add, just to build off Bill’s point, a lot of times they want to become the CEO or continue on their path, but really important part of this is making sure they can evolve with the growth of the company, and so having them in these board meetings creates a platform for self-awareness, but also for coaching as they think about getting from the planting to the growing phase, to the harvesting phase. I mean, you know, when you go through these meetings, a lot of times it just becomes clear who’s ready for that next chapter and who’s not.

And so having them in that meeting helps the board get a perspective, and it helps the individual have perspective on whether they’re the right person or not.

Michael Burcham: So many of these CEO direct reports that we call N-1s, they’re very new to this kind of role. Many of them were individual contributors in a company and now they’re asked to step up and learn to lead through others and lead to scale. But that requires a fundamental understanding of what creates value for the business, and it also requires them to be agents of change.

And if you do not understand what creates value and you’re not prepared to lead change, you probably won’t be successful because throughout our hold period there will be four to five fundamental shifts on how we integrate, how we collaborate with other companies. The acquisitions we will make. Roles and who’s in which seat.

It’s unrealistic to think none of those change from year one. And so when I am at a board meeting and I’m watching the direct reports of a CEO report out and engaging with them. I’m really looking for can this person learn to lead through others or are they a solo contributor and will they be a good agent of change or are they gonna cling the way things have always been done? And the answer to those two questions tell me, will they be here for the long term or not?

When N-1s Should Lead

Anderson Williams: Practically speaking for you all, when you’re observing N-1 engagement, what are the right opportunities for an N-1 to step up and lead in a board meeting or in board preparation or otherwise board communications, and what are maybe some of the wrong places that don’t ring as true or don’t live into the kinds of things you’re describing about showing how these people can grow into a role and into the future of the company.

So just any examples of what’s really good way of doing it? And then maybe on the flip side, what’s a mistake in engaging the N-1?

Bill Clendenen: This is where I think the art of the CEO and managing the board comes into play. I think initially at the early part of the hold, so in the planting phase, you probably only have less than a handful of N-1s, and you’re really just building out the organic or inorganic playbooks for value creation. You are actively recruiting your N-1s to build out this team.

In the early part of the hold, I often find that you have more of your N-1s sort of with you in the room presenting some way, shape, or form. And as I like to think about the N-1s presenting, I think of baseball and where the N-1 should give the play by play.

So here’s what’s happening, and then the CEO or CFO can be the color commentator. This is what it means, this is how it ties into the strategic plan. And so, what you do is you give your N-1 the opportunity to talk present, share their thoughts, but then you and the CFO are helping guide that strategic discussion as they’re presenting.

As you move into the other phases of growing and then harvesting. I ask the question, is this N-1 in a growth value creation role, or is it a hygienic role? And so what I try to do is give all of my value creation N-1s the opportunity to speak at every board meeting because that’s all about the strategic plan. Those roles, and again, depends on the company that are hygienic in nature, right?

Could be compliance, could be, you name it, some companies have, uh, hygienic, hr, whatever those roles are, you try to give them once or twice a year opportunities to speak on the board. So I think about is value creation versus hygiene and give those N-1s the appropriate opportunity to speak to the board in those moments .

Michael Burcham: As a board member I’d like to see a CEO assign an issue or a topic area to an N-1 at the board meeting. This is a great area we’re gonna assess this over the next few months and bring it back next quarter. I’m assigning this to Mary and uh, Mary will give a report out on that next quarter.

Not only does it in an enormous opportunity for Mary, but now we all know Mary’s gonna come back and it gives Mary permission to interact with all of us board members throughout the quarter. And I’ll get to see, based on what Mary brings back to what degree can she scale and grow with this business or not. So I think often a CEO just takes on every issue themselves, but I find the CEOs who assign various issues that come up to someone right there in the room and say they’ll be reporting out on it.

It creates a whole different of accountability of the team and you quickly learn who’s gonna level up and not. And if Mary can’t perform over the quarter. I can always save her as the CEO, but this is a great opportunity to see will this person scale or not. So, and as a board member, I’m always just watch that dynamic between the two, see how they interact and when I see someone step up like that and own an initiative, boy, it really excites me and I know how to then I could even reach out to that person outside the board meeting and further help their professional development as an individual.

Coaching N-1s for the Boardroom

Anderson Williams: So that leads me into one last question just to focus on N-1s.

When you’re observing these best kind of practices and setting it up N-1s up for the right opportunities, what does it look like for A CEO to support an N-1 in these situations? Assuming they’re putting them into growth roles, putting them front of a board in a way they’d never been before putting them on a project that’s a stretch project.

Any advice to a CEO about how to make sure you’re setting those people up for success? That then creates a bit more of the flywheel of being able to engage them moving forward even more deeply. Any thoughts on best supporting those N-1s?

Charlie Talbot: I think it starts with practically setting them up. But by that I mean if they’re gonna be at a board meeting, I think you wanna make sure that you have alignment on how you’re gonna present the materials you’re coaching them through, well in advance of the meeting, if they’re on track or off track relative to where they should be, you know, leveling the discussion, if you will.

I think your job as a CEO, or in some cases CFO, is helping prepare the materials, is to really make sure people are set up for success through their pieces of the discussion. And that’s a beyond a functional activity. That’s making sure that you have the holistic picture of what you’re trying to accomplish in terms of the messaging and key points you’re leaving with the board and making sure that those individuals who are gonna be presenting are aligned.

You know, the last thing you wanna do is have someone come in and just look like it’s just an add-on type of presentation. So I think the preparation piece is really critical here.

Michael Burcham: As the CEO, you are the coach and they’re the player, and you should take that mindset on in preparing for a board meeting and supporting them even during the board meeting.

It doesn’t mean you always agree with everything, but never forget your role as the coach and some of the best CEOs in our portfolio. Even when something doesn’t go perfect, they’re not putting a negative front of that person in the board meeting, but immediately after, they’re giving corrective feedback so that the next time they’re even better.

Because none of them are gonna be perfect the first two or three times board members know that as well. Our CEOs who really have the right skills to lead others understand what good coaching means, and they praise in public and they correct in private. Because once you have. Corrected or given negative feedback in a public forum, you destroy any intrinsic motivation and confidence that person has.

Even if you’ve hired the wrong person, deal with it after the board meeting. Don’t deal with it during the board meeting.

Bill Clendenen: One tip I have for CEOs and working with N-1s ones is use the pre-board meeting dinner to have like experienced people sit with like experienced people. So have your revenue cycle person, sit next to the person who has on the board a ton of revenue cycle experience. Have the organic growth expert on the board sit next to your head of sales.

You should facilitate those relationships as best you can. And I used to work with my investment team partner on the seating chart for the boards. I know that sounds really trivial, but it’s so important for those N-1s to develop those relationships that I took that extra step with my investment partner to make sure we were optimizing that two to three hour board dinner with our N-1s.

Michael Burcham: I think a last comment from me is no one gets it right every time, and you will make bad hires as A CEO, no matter how thoughtful you are.

A good thing to do if you’ve decided you have to turn over a role is interact with board members to say, what did I miss? What do we need? And what does great look like here?

Particularly if you’re a first time CEO, you may want to talk to two or three other people from other companies who are very successful in those roles to really think about what error you might have made.

Perhaps that person just simply couldn’t scale their own professional growth. Perhaps they got in over their skis and weren’t prepared for that kind of responsibility or their whole constitution they can’t handle that sense of responsibility and anxiety that comes with a role, or maybe they just don’t know how to coach other people.

There’s dozens and dozens of reasons why somebody may not succeed in a role that reports to a CEO, but you want to avoid perpetuating the problem. So if you do end up as a CEO with a turnover of one of your key people or a board member sees something and starts raising questions about it, be thoughtful about what you’re hearing and what you’re seeing.

And if for some reason the position does have to turn over, really do a thoughtful assessment of what did we miss and what can we do next time to make sure the key individual we put in that role can succeed because you’re messing with people’s lives and their careers.

None of us want to see somebody not succeed and you have a deep responsibility as a CEO for whomever you bring on the team to give them every opportunity for success. And that not only is true in being their coach and encourage them, but giving good corrective feedback and structure and giving them ways they can professionally advance and improve. because the company can outgrow them if we’re not careful, and let’s don’t let that happen.

Anderson Williams: If you enjoyed this episode, be sure and check out our five part Bigger. Stronger. Faster. series on What Makes a Great CEO. Additionally, throughout our Microcap Moments series, you’ll find interviews and profiles of successful CEOs, Executive Partners, and Lead Independent Directors, including our one-on-one with Charlie Talbot.