TASHA PELIO: Hello. I'm Tasha Pelio. I lead America's communications to the Corporate Investment Bank at J.P. Morgan. In honor of Women's History Month, I'm thrilled to have Rebecca Thornton with me here today. Rebecca is the head of directive advisory services at J.P. Morgan.
You may recognize her name from a recent New York Times story that featured Rebecca and some of the successes the group has made around diverse candidate board placements. The lack of diversity in the boardroom continues to be top of mind for all companies, and Rebecca and the director advisory services team is helping our clients solve for these issues.
REBECCA THORNTON: Hi, Tasha. Good morning.
TASHA PELIO: Nice to see you.
REBECCA THORNTON: Nice to see you, too. Happy International Women's Day.
TASHA PELIO: Yeah. Same to you. Rebecca, what is Director Advisory Services, and how did it begin?
REBECCA THORNTON: Thank you, Tasha. So, Director Advisory Services is a networking service for corporate directors that are clients of J.P. Morgan. It was formed in 2016 as Jamie Dimon and other senior leaders in the firm were regularly being called as sources on board searches and, in parallel, being called by clients and C-suite executives that they knew saying, hey, I'm interested in the board, and I'd love to be considered if you see anything that could be a good fit.
And he thought there was a role we could be playing in institutionalizing those sort of referrals in a more meaningful way, and that's how Director Advisory Services came together. Initially in the investment bank, but increasingly the private bank, commercial bank, and we work across the firm.
TASHA PELIO: Great. Makes sense. You've said that the success of any board search ultimately comes down to sourcing the right executive for the right boardroom. What does the process look like, and has it changed over time?
REBECCA THORNTON: So, the process has changed little, although I would tell you that how we go about solving for a search is quite different today. So, I've been in this business for 23 years. I spent 20 years in the executive recruiting world, 10 years with Heidrick & Struggles, nine with Spencer Stuart where I did almost exclusively board of directors recruitment. And in that time, I've worked with over 1,000 companies.
When I first got started in the late 90s, the way you went about board search was basically looking through the sitting CEOs and recently retired CEOs of the Fortune 1,000. And if they weren't yet on four or five boards, those people were your targets. Today, obviously, that looks very different. Fewer S&P 500 CEOs serve on outside boards, and with the increased focus on board composition and diversity of thought and gender and race and age, there really is a need to activate every available resource to make sure that you have the most inclusive set of talent available.
So, the process of how you recruit is quite similar, but I would say the way you source is as different as ever, and the need to activate networks like J.P. Morgan Director Advisory Services has never been greater.
TASHA PELIO: That's really interesting how it's changed over time. What are some patterns you've noticed as companies look to fill board seats? For example, are there similar character traits or qualifications that rise to the top?
REBECCA THORNTON: Fundamentally, I think the bar is integrity, honesty, has a track record of being able to work well with others, and is not afraid to speak with the courage of their convictions even if it's a dissenting point of view, but doing it in a collaborative and collegial way. Inclusive of that, because that's the most important factor, is making sure that you have real diversity of board composition.
We're looking for the right person for the right seat at the right time. And so that means basing that on forward looking strategy, basing that on retirements, basing that on committees, basing that on recent M&A.
So today we're looking for financial experts. We're looking for digital experts, cyber experts, people with the transformation sort of headset or mindset, a lot of international expertise, cross-border expertise, and then it's never been better to be a woman. A huge part of the requests that we get both in my search career and here at J.P. Morgan with Director Advisory Services is finding me female talent or people of color, and we're particularly proud of our track record that close to 80% of our placements have been women or people of color.
So with NASDAQ's pending rule and California's rules, I think that we're going to continue to see that as a real priority for boards, and the great news is that there is no talent issue here. There is tons of talent in the female and people of color that bring to the table. It's just that the titles may look a little different, and you need to activate every available network in order to source that talent.
TASHA PELIO: You bring up some good points. So what unique value do women of color bring to a board seat?
REBECCA THORNTON: I think any time that you have underrepresented voices in the room, it changes the game. It changes the culture. It changes the narrative. I think it has the benefit of also impacting how they think about their stakeholders, how they think about their shareholders, how they think about their customers and their supply chain. And it forces, really, I think, important business decisions that may have always been done one particular way because everyone at the table saw the world a particular way.
And I think any time that you open that up to have diversity of thought at the table, it leads to better business decisions because you're making choices on a variety of things, not just one data point. So I think there's no question that any time you have women, people of color, and other underrepresented minorities in the room, it leads to a more vibrant discussion.
TASHA PELIO: How does greater diversity on corporate boards add value for all stakeholders?
REBECCA THORNTON: Once you have that one underrepresented voice in the room, I have seen now a thousand times that you will see a greater emphasis on diversity, inclusion, and a greater emphasis on culture and a culture of inclusion. And you can argue that that starts in the pipeline. You can argue that starts at the top. I believe it starts at the top. And so the more diverse a board you have, the more diverse your stakeholders may be, the more diverse your shareholders may be, the more diverse your suppliers may be and other customers and important segments that you're looking to attract and retain.
So I look at it as a business issue and a business case more than just maybe NASDAQ telling you it's the right thing to do or the state of California telling you that it's the right thing to do. I fundamentally think it's good for business, and I think anybody who has made that an important part of their board culture is the proof statement.
TASHA PELIO: Is there a recent example you could possibly share?
REBECCA THORNTON: Rather than a company, what I will say is the impact that candidates have made. So, right now, especially women of color, have been probably inundated with calls looking for them to join boards. And what I will say is that those women have choice, and those women are voting with their feet in places where they've seen a culture of change and of inclusion.
29:23TASHA PELIO: With today being International Women's Day, who was a woman that inspires you?
29:27REBECCA THORNTON: My mother inspires me. One, she's amazing, but she was also one of the first 50 women hired into the training program at one of our competitor financial institutions all while raising two children. So she gets a lot of kudos for me. But on pop culture, I think Beyonce's very cool.
TASHA PELIO: What qualities make a great leader in your mind?
REBECCA THORNTON: I think empathy, strong listening skills, adaptability, and flexibility, I think being authentic, being yourself. There's only one of you and I think making sure that we're not all trying to be other things to other people. Honest, trustworthy, respectful, I think those are all qualities I look for not only in colleagues but also in friends.
TASHA PELIO: I agree. What advice do you have for the next generation of female leaders?
REBECCA THORNTON: Work hard, be honest, reach back and bring up the people on your teams and coming up behind you who may not have the confidence or voice but have the capability. Look out for talent. Give them spotlight. Stretch yourself. If you want to be a board member someday and you're sitting in your 20s today and looking forward in your career, just always look for that stretch assignment, whether that's an international job or leaving a function that you feel really safe and comfortable in. I think any time you get out of your comfort zone, you'll broaden yourself as an executive and as a leader. Those are just a few things that come to mind.
TASHA PELIO: Great advice. Thank you so much Rebecca for taking sometime today.
REBECCA THORNTON: Thank you for having me, Tasha.