Mary Francia - Strategy expert at Odgers Berndtson in Miami
Mary Francia is currently Partner CEO & Board, Head of Odgers Berndtson Miami Office. She is a Global Strategy expert with over 25 years of diverse leadership experience and P&L in Telecom, Consumer Electronics, Media and Healthcare. She is Partner at Odgers Berndtson, a global executive search, interim management, talent assessment and leadership development firm. Mary is an Italian American born in Peru and multilingual. She earned a Bachelor in Business Administration, an MBA in International Business, and a Certification in International Corporate Governance from INSEAD. This interview with Mary is about Sustainable Development Goals, Environmental, Social and Governance factors and Diversity, Equity & Inclusion in the Boardroom.
What drove you to pursue a career in business strategy and advisory services for talent and board composition?
As an executive, you realize that strategy is nothing but a set of actions, and those actions are performed or not by humans like you and me. The success is on its implementation, human talent is vital just as much as the board composition.
After 25 years as a Global Executive in Telecom, Consumer Electronics, Media and Healthcare sectors in Latin America, US, Europe and Asia, I moved to Management Consulting leveraging insights of experience, understanding what good oversight looks like of my leaders and boards, and with foresight skills as a strategist. I always say that you have to know how to cook to oversee the kitchen as a leader and board member. Strategy, Technology, Sustainability, Geopolitical and Human Talent are essential skills for the future. You need them as a leader and a board member.
The Biden Administration has taken huge steps to combat climate change and address social issues. What makes this interesting and also challenging in corporate governance?
The Biden administration is supporting areas that were unfortunately not respected but ignored by the previous administration. It is encouraging as a governance fellow to bring them to the agenda in the boardroom and challenge and guide management in climate change and social issues.
As a leader and board member today, you could not say that you are not aware of the problems, the impact of climate change, and how that is part of your fiduciary duties. The board is ultimately accountable to shareholders for the long-term stewardship of the company. It should be responsible for the company's long-term resilience concerning potential shifts in the business landscape that may result from climate change and social issues.
More companies are aligning with SDGs to make a positive impact as an organization. These SDGs also have ESG implications. Can you explain what these are about and why ESG factors have to be considered in the process of decision making?
Materiality is vital and is the first step. I advise companies to define what materiality is for their ecosystem, for their company. Understanding double materiality of course. The hard questions need to be in the agenda to understand what is driving financials and returns on products or services that contribute to the achievement of the SDGs or hurting them.
The board needs to have insight on materiality, ESG and their competence in the subjects. Creating a dashboard and building the metrics that apply to the company, the industry, the ecosystem where they do business, where their suppliers make their raw material, and their customers consume their products.
That is a great start to ensure the company understands the SDGs and ESG in their company and can therefore get management to react with a defined, structured format across its functions. Supply chain management as an example.
As you understand what is most material to the employees, your customers, your partners, the shareholders, and the investors in the company industry, the company can define its goals, narrative, and reporting not being alone but as part of a holistic approach achieving the SDGs.
What should companies do to make ESG reporting truly work within fundamental analysis?
Materiality is critical. ESG does not benefit from decades of financial reporting. The US does not have specific climate disclosure rules. We still do not have key definitions for some terms in quantification and reporting. For ESG disclosures, once the company has defined its materiality and has a clear path for the ESG integration to its strategy, its business practices with metrics, targets and accountability make it a lot easier to work with fundamental analysis as you have covered a similar approach.
Investors look at the macroeconomic impact on the industry and examine how the company strategy manages ESG risks and opportunities. You have to have a clear narrative on it.
Geopolitical risks are on the rise. It seems these risks have become the new normal. What's your view on this, and how should these risks be dealt with in the boardroom?
We live in volatility, uncertainty, complexity and ambiguity. Situations of constant unpredictable change are the norm. The effects of disruption only magnify in the coming years across all industries and accelerate the shift of the global economy and business models. It is not only about narrowly defined financial risk but also about technological, geopolitical, environmental, social, and governance risk.
The board must be competent in all these areas and the board members must be courageous. The board is there to ask the right questions and guide management to ensure that it navigates to success. ESG issues must be part of the strategy, its purpose, its decisions, its innovation, and its compensation philosophy. As with any implementation, you do it with data, metrics and accountability.
Industries transform their business models by implementing new technologies to link to an emerging market need. Technology can be very complex. How does an organization stay consistent during the process and secure the future of the business?
ESG is not only about risk; it is also about opportunity! The board must illuminate blind spots to help management see the risk and the white space to create a new path to revenues and resilience.
The crisis in the last years has only accelerated technology development and how we embrace technology. With 5G wireless, artificial intelligence, blockchain and digital currency, advances in technology implementations has made it obvious that boards may be challenged today, when performing risk oversight and strategic guidance regarding technology. The speed of implementations without the proper oversight can create a tremendous risk to a company. We see daily reports of cyberattacks and the damage it makes to an enterprise or a group of enterprises and its customers.
New business models often require recruiting and onboarding new directors. What are your key element points in this process, and how does a company retain these talented new hires?
The landscape of Board Composition is changing as Boards recognize the need for skills managing disruption. As the board determines if it has the requisite depth of relevant sectoral, operational, geographic or functional capability to oversee the risk, support and ask management the right questions, we see new skills brought as part of its refreshment and transformation.
The selection process is critical to ensure the skills and the chemistry to help the board achieve effectiveness.
I assist boards with term limits, conduct board and leadership assessments, review succession planning, define more aggressive goals on diversity, add a seat, or create a venue to bring that knowledge with advisory boards with members that are a pulse to the market.
Organizations today rely upon new technology like algorithm-based HR decision-making. The challenge is to downplay potential biases as much as possible. What's your opinion about this?
We are cautious in the recruitment industry to ensure the algorithms do not create bias; we know that is an issue. We have a proprietary solution for our work, including machine learning with big data, statistical models with inferences and taxonomies. Providing contextual intelligence to really help recruit the next generation of talent and advise clients beyond candidate generation.
Why is diversity, inclusion and equity important in board governance? Especially because of the fact our civilization is in the midst of one of the great transformations.
I am a Latin female executive, often the only one in a room in an executive leadership team. That is why I have a personal drive to accelerate transformation, embracing DEI to the units I have led, and I do it now with my clients. Diversity, Equity, Inclusion is about creating an inclusive organization that is well represented, contributed, and with opportunities for all individuals regardless of their makeup. It is not just an initiative, it has to be part of the DNA of a company for survival!
What are your goals, what do you want to achieve in your personal life and career? Can you picture yourself as the new mayor of Miami?
Not a bad idea; you just planted that now in my head! I think this world needs to accelerate the pace of governance to keep up with the world we live in today. Regulations in many areas are indeed behind so the government could use top talent to make a difference.
Hindsight, Oversight, Foresight...clarity and the ability to collaborate. Drive strategic, transformative change is my value. I look forward to doing that in a corporate board, sometime in the future as a board member in the US that is my home today. Europe has been my home for many years and I miss The Netherlands and France, and of course Latin America where I was born and raised in Lima, Peru. Becoming a Corporate Board Member, that is the plan!