Welcome to the Boardroom Governance Podcast. I’m your host, Evan Epstein. In this episode, I talk with Penny Herscher, a Silicon Valley-based tech executive and corporate director. Before transitioning to full time board work, she was the CEO of tech firms Simplex and FirstRain having previously served in firms such as Cadence, Synopis, Daisy Systems and Texas Instruments. Penny has served on several public and private company boards including Rambus, Pros and Verint, and is currently the Chair of the Board of Lumentum, Embark Trucks and Smart Global. She also serves as a director at Delphix, ModernHealth and French-based automated technology group Forvia. In this podcast, we talk about her career including her experience serving on public, private and international boards. We address several corporate governance hot topics including distinctions between serving in private venture backed boards vs. public boards, founder control and dual class share structures, separation of Chair and CEO positions, and the role of the board in strategy and innovation. We also talk about ESG, geopolitics and board diversity, among many other relevant topics for corporate directors. If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media. You can find all the show notes on the website boardroom-governance.com and please feel free to subscribe to the Boardroom Governance Newsletter at evanepstein.substack.com
0:00 -- Intro.
1:35 -- Start of interview.
2:05 -- Penny's "origin story".
3:38 -- Her experience as CEO of Simplex including its IPO (2001) and later sale (2002).
6:32 -- Her experience as CEO of FirstRain.
7:57 -- On her board journey. Public boards (past and present): Rambus, JDSU, Faurecia (France), Lumentum, Smart Global, Forvia, Embarck Trucks. Private tech software company boards: Delphix and Modern Health.
9:17 -- On distinctions between private and public boards. "A private VC-backed board is much more of a heavy lift than a public board... it's very interesting and you may not get paid [because it's based on stock]."
13:35-- On serving as an independent director in a private VC-backed company during the down-cycle. How VCs are reacting. "It's better to take a lower valuation from a high-quality strategic individual than it is to chase the highest valuation because a bad investor will hurt you faster than anything else."
16:00 -- On serving as Chair of public companies. "The biggest difference [between Chair and other directors] is that as Chair, you are the last to speak. It's really important to know that the role of the Chair is [to seek] the high quality functioning of the board and the participation of all the directors, not to share your opinion." "Leadership by listening rather than by speaking."
18:12 -- On the separation of Chair and CEO roles. "It's really important that you really do have an independent board."
20:29 -- On dual-class stock and founder control. "The benefit of dual-class stock with the benefit of a good founder is clarity of the strategy [preventing distraction]." "But there is a trade-off."
23:35 -- On the role of the board in strategy and innovation. "You have to create a culture to challenge at the board level."
26:30 -- Her take on ESG and the anti-ESG backlash. "I'm very pro-ESG, particularly E." "You have to have courage to lead."
33:33 -- On geopolitics and tensions with China. "We need more of a balancing than a decoupling (which is naive and unhealthy)." "The US has a complete chokehold on China for semiconductor manufacturing." "The semiconductor equipment comes from the US and Holland, and the software to design chips comes from California (dominated by two companies: Synopsis and Cadence)."
39:06 -- On the transition to EVs in the automotive industry.
40:38 -- On the evolution of boardroom diversity. "The California laws (SB-826 and AB-979), whether constitutional or not, brought great momentum for more board diversity."
42:59 -- On her experience serving on French (and EU) company boards (which have board diversity quotas and union representatives on the board).
47:55 -- How the automotive industry will change through technology and innovation.
50:24 -- The books that have greatly influenced her life (in this case, these books re-wired her brain on European history):
52:10 -- Her mentors, and what she learned from them.
53:40 -- On founders or CEOs transitioning to the Chair role of the board. "I think it really depends on the founder."
56:00 -- Quotes she thinks of often or lives his life by: "Damn the torpedoes, full speed ahead."
56:30 -- An unusual habit or an absurd thing that he loves: She loves the city of Rome.
57:13 -- On the differences between the US and the UK/EU from a professional and cultural perspective. "As a woman, I couldn't imagine working in Europe in the 1980s or 1990s, and having any kind of career." "California is the best employment environment in the world for women in tech." "But to your general question: I would like to work in California and live in Europe."
58:22 -- The living person he most admires: her father.
Penny Herscher serves on four public company boards: Lumentum, SGH (Smart Global), Embark Trucks and Forvia SA and two private company boards, Delphix and Modern Health. She was President & CEO of two technology companies, Simplex and FirstRain, over the last 25 years. She is an experienced technology CEO, based in Silicon Valley, who took her first company, Simplex Solutions, public and then sold it to Cadence Design Systems in 2002. She sold her second company, FirstRain, to Ignite Technologies in 2017. Prior to Simplex, Penny was a member of the executive leadership team at Synopsys, through the IPO, on the way to becoming the #1 EDA company.
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You can follow Evan on social media at:
Twitter: @evanepstein
LinkedIn: https://www.linkedin.com/in/epsteinevan/
Substack: https://evanepstein.substack.com/
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Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License