25 minute read
Maria Martinez
IT IS ABOUT HEART, SOUL AND MIND
In October, she will achieve her second anniversary as a member of the board of directors of McKesson, the nation's largest drug distributer and a major player in the healthcare industry.
FOR MARTINEZ, Chief Operating Officer at hardware giant Cisco Systems, holding a governance position at company ranked number seven in the Fortune 500, is a major personal accomplishment that also singularly notable in that it comes at a time when women and Hispanics remain underrepresented on company boards. Martinez is one of three women on the nine-member McKesson board.
With a 35-year career in leadership positions in various technology enterprises, she brings to the healthcare giant is an abundance of an attribute, experience, that she says Hispanics need to acquire before they can create more opportunities to be chosen company directors. "One of the problems of the past is that boards like experienced people," said Martinez who joined Cisco Systems, the number 63 company in the Fortune 500, as a high-level executive in April 2018 and has held executive positions at industry leaders such as Salesforce, Microsoft, Motorola, and AT&T.
While the disparity in Hispanics and women obtaining board seats persists, Martinez is encouraged about the outlook for these groups. She said the timing is right now for more of these people to reach this pinnacle of business leadership. "Boards are a lot more interested and a lot more shareholders are demanding diversity on boards," she said.
Martinez, who holds a bachelor's degree in in electrical engineering from the Universidad de Puerto Rico and a master's degree in computer engineering from Ohio State University, emphasizes that education is important for anyone looking to serve on a company board. She points institutions such as Stanford University who are now helping people for a governance opportunity. "Try to learn enough about it (board service} that you can convince some board to take you." she said, with the previse that this process does take time and boards know that it may have to spend a few months training you, and they will."
Being board director, Martinez has found, is very different from being a company executive and was "the biggest transitions" of her career.
MARIA MARTINEZ
COO OF CISCO & BOARD DIRECTOR FOR MCKESSON
"It was a learning experience that I wanted to have," she said. "I did not know if I would like it, I am so hands on, but the board has really taught me how to be an advisor." What Martinez has learned is that a board position requires a different kind of skills from being an executive. This includes know what to say and when to be a hands-off director, she said, "but you have to be close enough to keep an eye on things" and responsibly in represent shareholders. "You have to ensure that that company is going in the right direction and your leadership team is doing the right thing," the McKesson board member explained, and this means knowing how to really influence the direction of the company and to give the leadership team enough space to do it their way.
As an executive, Martinez said holding a board seat has been helpful because she sees how decisions get made, and the importance of the different aspects of a company's operation. "I have learned a lot about finance, audits and all compensation aspects at the executive level in much broader way," said Martinez who is on the McKesson finance and governance committees. She also has become more cognizant of what the board cares about, so she can now make that a priority. During her decades of executive work, Martinez has thought a lot about leadership style and breaks it down to three elements: heart, soul and mind.
Heart, “is caring about people, empathy for people and trying to play to their strengths and to make them become part of your team."
Soul is the compassion you contribute. "You must have a have strong vision for where you want to go and have everyone passionate about that."
Mind consists of the knowledge, the skills and the technical aspect of the job, the Cisco executive said. "For years, I always thought that mind was more important," Martinez said, "but now, after being around for a long time and trying different ways, I now think it is heart."
Maria Martinez was presented in August 2021 with the Latino Leaders Maestro Award for entrepreneurship.
MARTHA BEJAR
INDEPENDENT BOARD DIRECTOR FOR: QUADIENT, SPORTSMAN’S WAREHOUSE, COMMVAULT & LUMEN TECHNOLOGIES.
THIS QUESTION lays bare my life as an American that comes from a courageous and proud Cuban family. I have grown in business and have earned positions where I have an opportunity to influence and lead, I was raised to be bold, unafraid, and proud of my choices – a golden thread of consistency in my career. I have always focused on moving quickly past individual successes and working hard to change the root cause of biases and inequities.
When the institutional informal network is way more powerful and complicated than my initial assessment, I devise a way out of that tight box and I make sure to flatten the sides and allow for greater acceptance of a broader and inclusive perspective. Not always easy, and yes, I have had setbacks. But I simply believe that if I (we) are being blocked or minimized, for irresponsible reasons such as ignorance or biases, and I cannot break through those barriers initially, then just like a failed experiment, the best tactic is to regroup, and reassess – find another angle. Don’t get stuck and waste time on an outcome that has come and gone. Prepare better for the next round and build on learnings that continues to flatten the box. I will finish my reflection with this: we have a lot of work to do in America for our people, and those of us that have leadership roles, need to pay it forward – and make a difference in a life or many lives.
RECENTLY RETIRED president and managing director of General Motors de México, Ernesto M. Hernandez, sees the business world "with no boundaries, with no borders." One manifestation of this trend is how businesses are run through global boards. There is an increased value placed on diversity, "diversity of thought," Hernandez observes. The international vision and experience that Hernandez, who is a graduate of a major public university in Mexico, brings to the table has helped him gain seats on four company boards. “A Mexican
national running an international company, with relevant experience in Latin America," he said. "We Latinos can and know how to do big things".
Hernandez sees a future in which the value of people like him in governance will increase as ESG trends and workplace shifts in global companies expand the vision needed to be a successful corporate director.
Ernesto M. Hernandez left General Motors in 2020 after spending his entire 40-year working career in this company, the last eight as President and Managing Director of GM Mexico.
He came to GM out of the Instituto Politecnico Nacional in Mexico City with a Bachelor of Science degree in mechanical engineering. "Half of my career was in the nutsand-bolts side of the house," he said, and included engineering, manufacturing, planning, and purchasing. He acquired a well-rounded education which included an MBA from the Instituto Tecnologico Autonomo de Mexico (ITAM) and a MSc degree in management from the Massachusetts Institute of Technology. Hernandez would eventually turn to marketing, sales and service and became vice president of General Motors in Mexico, Central America, and the Caribbean. When he was appointed president in 2011, he became the first Mexican national to run this company.
The first opportunity to be a corporate director came in 2014 when Hernandez accepted Constellation Brands invitation to join its board and got the green light from GM. New York based Constellation is a major wine, beer and spirits producer and retailer and its beer portfolio features several foreign brands, including Mexican imports Corona and Modelo.
Today, the retired GM executive's resumé features directorships in two Mexican companies, DINE and Grupo KUO. Hernandez crossed another border when he received a seat on the board of Bombardier Recreational Products Inc. a Canadian manufacturer of snowmobiles, all-terrain vehicles, motorcycles, and personal watercraft.
During his ongoing tenure on corporate boards, Hernandez has found that his ability to run an entire region for GM has been a big asset. His experience in the technical, commercial, and financial aspects of a major business, and his responsibility for P&L, were paramount.
In various ways, Hernandez also is a harbinger of the new global director having held several international roles for GM, dealing with different "employees, unions, governments, suppliers, and distributors, among other stakeholders."
What Constellation Brands judged, Hernandez said, "is that my experience in this region would be valuable because they have a big manufacturing footprint in Mexico," he said. With BRP, Hernandez, enjoys a front row look at a business that fascinated him because of "the variety of amazing products they have." The Canadian board values his background as it relates to the technical aspects of design and manufacturing of the products they offer.
Hernandez expects international boards to gradually change to include directors that represent people in the different regions and countries where they have operations more closely. "In that sense," he said, "I am probably a good representative of the people in Mexico, in Latin America”. Hernandez also shares important insights "to navigate the specific ways of doing business in Mexico”, which can be valuable to a company operating there. “I am able to provide recommendations in how to approach problems and in the way we run operations", he said.
Looking forward, Hernandez points to "the changes the pandemic has advanced, and a lot of political and social movements all over the world" as part of a reality in which running businesses through global boards will become the new norm. Moreover, as the world of work and business relations becomes borderless, Hernandez said, "having the right people serving on the boards aids to the success of these companies in different countries." Another factor, Hernandez sees acquiring greater eminence is the migration of office work thanks to technology, creating greater opportunities for more people wanting to participate in global positions.
Hernandez said a major challenge comes from the different ways of “misrepresenting globalization”. He asserts that "a global enterprise makes sense because it creates job opportunities for people in many different regions and countries. Opportunities that would otherwise be absent or lost". Another trend that Hernandez sees emerging in a new environment is leaders becoming more conscious about the importance of understanding biotechnology, big data, etc. "This pandemic is but a sample of what could happen”, he said. Still, he is optimistic because humanity has been able to adopt to many different changes and this will not be the exception. “But certainly, we are living in strange times.”
Two things, however, remain constant for Hernandez, a devoted family man who has a son and daughter in their 30's. His golf game remains "lousy", and his grandson is the light of his life.
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LESSONS FROM A GLOBAL PERSPECTIVE
In an increasingly complex world, it has become "vital for corporations to understand their culture, and to truly differentiate themselves by being companies that always put the human being first," advises Javier Teruel, and essential to developing a successful culture, the former Colgate-Palmolive executive says, is recognizing the great value of diversity and inclusion.
JAVIER G TERUEL
BOARD DIRECTOR FOR STARBUCKS COFFEE JAVIER G TERUEL joined the Starbucks Coffee Company's board of directors in 2005, two years before he would retire from the multinational consumer products company Colgate-Palmolive. He started his career with Colgate in 1971 in Mexico City in a marketing and sales position. He then moved through various global markets, including Europe and the United States and had wrapped up in 2007 when he was vice chairman. After he retired, Teruel, who also is chairman of Alta Growth Capital, a private equity firm, would serve on the boards of Pepsi Bottling Group, the Nielsen Company and JC Penney. Today, he limits this role to only Starbucks.
As a director, he has seen the relationship between boards and management evolve and that diversity and inclusiveness has increasingly proven beneficial to companies. To make this happen, he said each director should bring something unique and valuable to the board based on their own experiences, expertise, talents and personalities. For Hispanic directors "Sometimes it only is pure Latin American expertise and that is okay, he said, because many companies do a huge business in Latin America. Or it can be a deep understanding of the Hispanic consumer in the United States," he said, which "is very, very different than Latin American consumers." He affirmed there’s "no doubt" that he has provided perspectives to his boards that nobody else had. "Those include all the things I am. I can provide a perspective of Latin America and I also can provide a perspective of the Hispanic consumer in the U.S." said Teruel. "The companies that I served are global companies," he said, with significant business in Latin America.
In many ways, Teruel's background as a Mexican and a senior executive, exemplifies the diversity that many companies need now and will need in the future to remain viable.
Sixteen years ago, both Starbucks and Colgate Palmolive saw something in having Teruel on the former’s board that could benefit their companies. The Seattle-based coffee giant was looking for a board member with international and marketing experience and who had run significant businesses. Colgate viewed that a directorship would rather round their longtime employee as a senior executive.
Colgate encouraged Teruel to accept the appointment which came in 2005 from Howard Schultz, who was the chairman and chief executive officer of Starbucks.
For a director to be successful, Teruel said, two things must happen. "I always believed that being a director of a board is a huge honor and a huge responsibility." he said, "but it has to work both ways. You have to contribute significantly to that company and then the experience itself has to be of significant value to you."
There are several factors that Teruel brings to a board that he sees are paramount in making this relationship valuable. "You have to bring a global perspective but take into account local differences and love the differences that are important," the Starbucks director said. This includes how you speak about benefits to consumers around the world and an awareness of the possible need to adjust product formulas like Colgate has done with the taste of its toothpaste in some geographies. In addition, local delivery practices have to be recognized, Teruel said. "In Latin America small mom and pop stores are very significant," he noted, and "in Mexico we have 800,000 to 1 million of these ‘changarros,’ but this is not a phenomenon in the United States or Europe." Companies also need to take into account differences in purchasing power, he said which for Hispanics in the United States is significantly higher than, for example, in Mexico, Colombia, Brazil or Guatemala.
In addition to the increasing value of global expertise, Teruel during his 16 years on company boards, has seen the functioning between management and their boards progress significantly. "The interaction has become a lot more professional and a lot more participative, "he said, "and with my boards it has evolved into more of a full exchange of ideas versus being served a solution." The extent of this interaction depends a lot on personalities. "I have been very, very lucky to serve on boards where the CEOs have been very open to being participatory," Teruel said, but this is not the case with many companies where a stamp of approval is sought and there is less of a discussion.
One of the needs that Teruel sees as vital is that many more boards seek diversity, not only in inclusion, but also as far as backgrounds, experiences and culture, but also raw talent and personal values and most importantly a significant participation of women and the younger generation.
Those CEOs who embrace and tap into that diversity, he said, "have a stronger opportunity of succeeding and having their company succeed." To achieve this diversity, Teruel said, it depends in large part in how corporate governance committees and the CEOs drive this change.
"If you don't run processes where you ask your search firms to always bring you a fair representation of diverse talent, then you will not see a pool of diverse talent and will not see diversity in the board," he said.
While board members like himself need to speak up, they also should recognize there is only so much you can push in one direction and that in the end it is management and not the board that actually run the business, Teruel said. "There is a place for you to advise and to ask the right questions and there is a place for you to step back and let management do what they have to do, what they think is right to do," he said.
Teruel said he would start by having all the kinds of representations on the board, particularly African American, Hispanic and Asian members, and request loud and clear that they want to see what efforts are being made to bring diversity within the company and to make sure that there is a similar effort at the board level. "Every time we see a candidate for succession, even for CEO, we need to see a diverse slate of candidates and in any discussion about directors, the same."
Teruel, who is a graduate of the Universidad Iberoamericana (Mexico City) and has an ISMP diploma from Harvard Business School finds that being a CEO today is a huge challenge. CEOs must deal with so many things and the world is changing so quickly, he said. If companies do not address security and the digital transformation, for example, they could die. "We have become much more sensitive and aware of how the world can put us on our knees because of factors such as COVID-19," Teruel said, adding "I admire very much companies that went all the way and did everything they could to save their company, their customers and their jobs, like Starbucks did."
Moreover, Teruel said, "We have to be humane companies, much more connected to all our stakeholders – yes, directors in theory represent shareholders – but we have to represent all stakeholders and we have to do the right thing for our customers, for our employees, for our communities, for the environment, for the suppliers, for everyone that is a stakeholder in our company."
The boards are becoming a place where these things are discussed and where strategies are valued in a broader sense, he said.
THADDEUS ARROYO
CHIEF EXECUTIVE OFFICER AT&T CONSUMER, BOARD DIRECTOR GLOBAL PAYMENTS
A conversation about his experiences, visions and the need of developing future leaders.
Latino Leaders: What are the main differences between serving as CEO and serving as a Board Director of a
Corporation?
Thaddeus Arroyo: I’ve been fortunate to have the opportunity to serve as the chief executive officer over several of AT&T’s communication business segments as well as on the Board of Directors for a variety of companies. Across each of these experiences, I’ve tried to bring perspective from my own career experiences to help shape and guide the direction of these organizations. In both the management and governance roles, I focus on the potential of strategy to improve topline and bottom-line performance of the company. The primary difference between serving in a management position versus in a governance oversight capacity as an independent board director is realized through the lens to which your respective skills and experiences are applied. In management, responsibilities focus more heavily on operational focus and execution, formulating the company’s strategy and priorities, and inspiring teams to excel by developing a common culture and vision. The board’s primary responsibilities are more centered around oversight and abiding by the principles of good corporate governance including fiduciary objective of long-term value creation. Board accountability and oversight is premised on the ability to be objective and distinct from management.
Through the skills and contributions of individual directors, board directors must develop their own point of views to provide management meaningful strategic guidance.
L.L: Across a large company, like AT&T, how do you ensure everyone is aligned to a consistent culture and priorities from the teams serving customers directly, to management teams to the C-Suite and Board?
T.A: It’s important to establish a strong and focused foundation of priorities aligned to the company strategy while investing in an intentional culture capable of driving corporate success. Leaders must recognize and create a sustainable path forward for their teams to promote disruptive thinking, and importantly, have a clear line of sight to understanding the organization’s business and strategic priorities. This way of thinking ignites meaningful contributions that are critical to driving a high-level of performance across all parts of the business. It’s crucial that teams are empowered with the tools, processes and policies needed to effectively achieve their goals in an environment that nurtures an inclusive and consistent culture.
I encourage my leadership teams to strive each day to foster a sense of belonging and empowerment across our organization as well as through our actions that impact the communities and customers that we support and serve. This mindset helps us internally by driving accountability and awareness that enables us to continue pushing the boundaries of innovation, and externally by growing deeper relationships with customers.
L.L: What are the main characteristics of a successful leader and which leadership values are important in shaping a company’s future growth?
T.A: I’ve found that the best rewards come through the biggest challenges. To me, lifelong learning and being a successful leader go hand-in-hand. To help your company keep up with the speed at which technology is disrupting and re-shaping virtually every aspect of business and society, leaders must commit to learning and growing every day.
Additionally, growth as a leader often coincides with new career moves.
Each change presents an opportunity to grow both professionally and personally. Part of leading means taking on new challenges, embracing the uncomfortable and stretching to expand your knowledgebase and abilities.
Successful leaders must truly commit to trusting and learning from their teams as they execute and sometimes adjust strategies to create new value and velocity for their companies, customers, and stakeholders. And an instrumental element of this is building teams that reflect the markets they serve. Diverse teams bring different perspectives, which can help unlock new possibilities and higher degrees of innovation. Therefore, creating teams that represent diverse thoughts, approaches and understanding establishes an important pillar for a company’s future growth. A key part of being a leader is managing the moments that matter to your teams, customers and communities that you identify with and serve. It’s important to remember that success is often less about the individual and more about magnifying the strengths with the team.
L.L: What actions do you think are needed to have more Latino Directors serving on C-Suite level of management or Board Director seats?
T.A: The Hispanic community is the youngest and fastest-growing demographic in the nation and when we look toward the future, it’s clear that we are, and will continue to achieve a great deal for society. Hispanic leaders continue to emerge as prominent figures throughout corporate America and all parts of our society. This community has a massive role and opportunity to enhance how people live, work and engage with one another. When thinking about the importance of diversity throughout an organization, at any level including leadership and board of director ranks, I’m often reminded of one of my favorite quotes. It comes from the National Center for Women in Information Technology, and it is “the idea you don’t have, is the voice you haven’t heard.”
A diverse Board of Directors brings diversity of thought, approach and understanding critical to understand the diverse customer bases the companies they counsel serve. Different perspectives help define new possibilities. Embracing and fostering a diverse Board of Directors, leadership teams and workforce is not only the right thing to do, it´s simply good business. In fact, a 2018 study by the Boston Consulting Group found that companies with more diverse management teams have 19% higher revenue due to innovation.
We must all challenge ourselves to ensure we’re developing future leaders that are able to offer diverse perspectives. It’s truly up to the current generation of leaders to not only shape the next wave of innovation, but to also influence the next generation of future leaders in this emerging, digitally-driven world. The Hispanic community is at the very core of our society’s transformative journey and I’m optimistic and confident in the Hispanic community is well equipped to lead now and into the future.
EVOLUTION IN THE BOARDROOM
FRANCISCO SANCHEZ
SENIOR MANAGING DIRECTOR, PT CAPITAL & CHAIRMAN, CEO, CNS GLOBAL CONSULTING As a member of the board of directors for food industry giant Archer Daniels Midland, he thinks the traditional role of company governance is evolving.
A BOARD'S relationship with management and the dominance of chief executive and finance officers in the choice of directors is likely to persist, according to Sánchez. However, there is a movement toward greater attention to diversity – ethnic, gender and skill-sets – among those who sit at the table. Moreover, company boards are increasingly having to respond to a need to devote more attention to ESG: environment social governance. Socially responsible investors are looking for these factors in companies. Sánchez warns that companies that do not address ESG and ignore activists who raise these types of issues, "do it at their peril" and could have things forced on them such as board members who are not their choice.
Under these circumstances, this is where there is likely to be more interest in candidates such as Francisco Sánchez, who may not fit the usual CEO or CFO profile for a directorship but adds diversity, as the son of Spanish immigrants and as a former White House administrator and internal trade specialist is familiar with public interest and public policy. "I may see things that others might not see because they are focused on the bottom line," Sánchez said.
After five years with Obama, Sánchez decided to return to the public sector. In 2013, he became chairman and CEO of CNS Global Advisors, an investment firm based in Washington D.C., a position he still holds. He also wanted to be a corporate director for a company with an international focus. As he was leaving the White House in 2013, he met ADM's then CEO Patricia Woertz who saw him as a right fit to fill a director's seat. "They were looking for someone with international and government experience.” The next year, he joined the ADM board. It took more than two years before he felt he knew the company and could be valuable.
Sánchez, who divides his time between Florida and Washington DC, serves on the board's sustainability committee and expresses pride that ADM is a good corporate citizen and doing everything it can to be a good steward of the environment. The company also has been looking for products that are sustainable and healthy under the company's current CEO, Juan Luciano.
Sánchez said the ADM board is very different now than when he started. There are two women, one who is Afro-Latino (Debra Sandler), who both come from the marketing world, in the food business. A recent addition is an African American, who is a high-level executive at a big company who is not a CEO, but is experienced in global procurement which is important because ADM sells to 80 countries,
On the benefit of board diversification, Sánchez cites both a positive impact on the bottom line and its help in spotting trends. "The fact that you have people who always aren't going to see things from the same perspective is a great value," he said, "People that bring different life experiences, different cultural experiences are going to help enhance where you are going."
An awareness of trends, Sánchez explains, is a factor in how ADM is evolving. "The company that we are today is very different than eight years ago, and certainly very different than it was 20 years ago. Historically, ADM did four things," he said: "We processed agricultural commodities, stored them - big silos, we transported them by train, by ship by truck, and we traded them." For nearly all of the company's 110 years, these activities probably represented 95 percent or more of ADM's business, Sánchez says. "By 2025, 25 percent of our business is going to come from flavors, ingredients, creating products that come from making sustainable products, everything from plantbased foods to jet fuel."
Looking forward the traditional role of a company board, that of setting a vision with senior management and approving a budget, will not change, Sánchez says, but he adds, "paying attention to the impact the company is having on the environment, paying attention to how they are contributing to diversity and inclusion, these issues are here to stay.
