Building diversity into boards and teams

Welcome back to Above Board. Today’s edition wraps up our conversations with Lily Lyman of Underscore VC. We focus on Lily’s experience as a board member (often being the only female in the room), how to overcome imposter syndrome, and more.

For new subscribers, you may be curious to check out our last two editions with Lily that focused on how founders can prepare to run their first board meeting along with how Underscore thinks about building boards at early stage companies.

AB: Thanks so much for joining us once again, Lily. You’ve shared that you are often the only female on boards on which you sit. Is that something you think about? How can this be changed?

LL: I think about it all the time. I notice it because I'm usually the only woman in the room. It’s annoying, but it's a reality we're working to change. The reason why I care about this is because more diverse perspectives in a room leads to better outcomes. There are all sorts of studies that show why that matters. 

Who you hire early on has a lot to do with who you hire down the road. For early stage companies, there’s this trade off that I think can be confusing, but I don't actually think it should be, which is that people feel the need to hire the right people right now. This is more from an executive team perspective, but it also ends up affecting who shows up in your boardroom.

If you build diversity into your team and board earlier, it will attract more diversity. So I'm a believer that when given the opportunity, work a little bit harder at the earliest stages to fill some of those positions with an underrepresented person if you can. Sometimes founders get stressed about this because they may have a short run rate or a huge opportunity and they need to fill a position. 

The truth is yes, finding diverse candidates sometimes takes longer because you just have to work harder to build your pipeline. But the reality is that it will be worth it in the long term for many reasons. If you can build that diversity in early, you're more likely to attract more diversity down the road. Further, for underrepresented folks, it’s a better experience if there is diversity in the room and they aren’t the only underrepresented person.

I see this come up a lot at series B, which is often when people fill an independent board seat. If all your investor directors are male, which is about 85% of this industry, then work a little harder to make that independent board seat diverse because that's a way you can get it in the room.

There are plenty of awesome, diverse operators who would love to join your board. There are a lot of great organizations that will do pro-bono work to find a killer person for your independent board seat. There are regional and national organizations that are working on this, and there are recruiting firms that have whole separate programs around this, such as Last Mile, Him for Her, and Trewstar.

AB: What have other folks in the boardroom been able to do to make it a good environment for everyone there? 

LL: At the end of the day, I think it comes down to the culture you are creating in the room. Psychological safety is the term that's used and is super important for productive teams, and I would think about your board as a team.

So how do you create a space that is productive? I think one thing is to create a dynamic where you encourage people to speak up and ensure that one person's not dominating all the time. The best CEOs (in terms of board dynamics) create a culture where everyone feels like they can participate and be included. Sometimes that means containing a voice that maybe doesn't want to be contained or inviting a voice that may be reluctant to participate. Sometimes it might be expanding the board group for part of the meeting because there are women on the executive team, so they want to get them in the room. 

I've had some board sessions where 30 minutes of it is more of the executive team (which includes females) and that's helpful for me because I'm not the only woman in the room. To be honest though, I don't really care. I'm so used to being the only female in the room, unfortunately, but inviting other diverse company executives (who aren’t on the board) makes a nicer dynamic. And, you're giving more people exposure to the board, which is also good for executives.

AB: Any tips for overcoming imposter syndrome as an underrepresented board member?

LL: I don't feel this way as much anymore, but when I first joined boards, I was sort of intimidated, not only because I was the lone woman, but also because I was the most junior person in the room. A tactical trick that I learned back when I was working at Facebook was to try to ask a question - even if it was a simple question - in the first 20 minutes of the meeting.

It's almost like breaking the seal. And it's not a long soliloquy. It's not a big, long opinion, but it's just a question — maybe it's a clarifying question or maybe it's a strategic question, but it’s something that gets your voice out into the space. And in some ways it just always made me feel more comfortable after that to speak up.

AB: Underscore is known to be a founder-friendly firm. Is there ever a tension as a founder friendly firm to delivering bad news or harsh feedback to a founder? How do you overcome this?

LL: It comes down to how you treat people and the nature of your relationship. We've certainly had hard conversations with founders, whether it's around burn, follow-on financing, difficult team decisions, etc.

My personal style is to deliver tougher feedback one-on-one. I'm sort of a “praise-in-public, criticize-in-private” type of person. I don't hold back from having hard conversations as a group, but if I'm really going to give someone some really hard feedback, I prefer to do it one-on-one. I think that's more respectful than doing it in front of a group of people. That's a personal style choice.

Another important thing to address is where you are coming from. A big Stanford touchy-feely thing that I learned and am a believer in is to state your intent. If you're going to have a hard conversation, then you should share where you're coming from. In other words: “What's my why?” “My intent in sharing this is _____.” This approach can help show you’re trying to come from a good place, and it helps others lead with empathy in response.

AB: Any other thoughts on how boards should be using their time or treating the company’s founders?

LL: I think it's a duty of a board member to pick the stuff that matters. You can grill somebody for anything. But, if you take someone down in the details of some little point on a deck or something that maybe isn't really the thing that actually matters, then you’re not using everyone’s time as well as you can. I think part of the board’s job is to pull up and ask, “What really matters here? What things should we be paying attention to?”

Thank you again, Lily, for all of the great insights you have shared in this series. Next week on Above Board, we’re excited to be diving into a new topic: boards at publicly traded companies. Until then, please share the newsletter with colleagues/friends/classmates.