Keir Gumbs: "Governance Directly and Unequivocally Impacts Value."

Boardroom Governance with Evan Epstein

0:00 Intro.

1:34 Start of interview.

2:12 Keir's "origin story". He grew up in the Bay Area and went to high school in Oakland where he ran track and got a scholarship to go to Ohio State. After realizing he wasn't going to be an Olympian, he decided to study law at U Penn. When he graduated in 1999, he joined the SEC where, among other matters, he was part of the shareholder proposals taskforce which led him on the path of corporate governance. After 6 years at the SEC, he joined Covington & Burling where he practiced for about 13 years. In his last year at Covington he worked on the Uber investigation, after which he was hired to join the company as Associate General Counsel for Corporate (where he led the IPO, the company's corporate governance and ESG programs). He later got promoted to Deputy GC. He joined Broadridge Financial Solutions as Chief Legal Officer in 2021.

5:55 Keir's role on the governance assessment for the Holder Report in 2017 [where his firm recommended that Uber focus on four prevailing themes with regard to taking the following remedial measures: tone at the top, trust, transformation, and accountability]. His headline: "Governance directly and unequivocally impacts value." "For me, Uber is the quintessential example for that." "At that time, Uber was king of the world: the largest and most valuable Unicorn, rapidly expanding around the world, they had radically changed how people got around." "Uber's scandal started with Susan Fowler's blog post (which indicated a culture in need of change) and the #DeleteUber campaign post travel ban fiasco in NYC." "These events set the company into a spiral, where they had to address these governance and cultural issues in order to thrive and survive."

13:40 On Silicon Valley's "growth at all costs" and "founder empowerment" culture, and the unique distinctions between private vs public corporate governance practices: "The real question in my mind is has Silicon Valley learned its lesson? Have the VCs learned?" "Here is the truth of it: for every Theranos, Uber or WeWork, there is a Facebook, and let's be very candid here, FB is still very successful - if you were an original investor in FB you have done very well for yourself - despite the company not embracing the best corporate governance practices [and yet FB is still thriving]." "[Despite some of the governance scandals in tech companies] there is certainly more awareness now about how corporate governance can impact value."

19:07 On the evolution of corporate governance and the growing influence of institutional investors. Its impact on private venture-backed companies: "There must be a governance transition based on the growing number of investors participating in the company's evolution (particularly if/when the company goes public)."

25:15 On the history and focus of Broadridge Financial Solutions.

27:50 On the role of technology, Blockchain, Meme Stocks and Proxy Voting. The Delaware Vice-Chancellor Travis Laster Speech at CII: "The Block Chain Plunder: Using Technology to Clean Up Proxy Plumbing and Take Back the Vote." (2016) The SEC's Proposal to Reduce Risks in Clearance and Settlement. "I'm not sure blockchain will be the technological solution that everyone is embracing."

33:36 On proxy contests ("the level of proxy contests seems lower than what we would have expected."), and the new SEC rules on universal proxy cards. This rule will start applying this August ("will it meaningful increase the number of proxy contests? It's an open question at this point.")

40:30 Keir's thoughts on boardroom diversity, including SB-826 and AB-979 getting struck down in California Courts: "I personally would not read too much into those [court decisions in California] for two reasons: 1) Spinning in the wind and 2)
"the horse has left the barn" on the topic of boardroom diversity." "Investors, employees, customers and the general public all care about the composition of a board from a diversity perspective."

45:05 His thoughts on the SEC's current agenda. "There is no doubt that there is a very pro-enforcement agenda in place right now." "There is a new Sheriff in town." The EY Enforcement Action (where EY had to pay a $100M penalty for employees cheating on CPA ethics exams and misleading investigation). Dissent from Commissioner Hester Pierce.

51:13 On the politicization of boards and how companies and boards have to deal with hot (and controversial) social topics. Assembling a group of employees to handle how, when and what should the company address about these issues. "It's an incredibly hard challenge for GCs and other senior executives." "Employees, customers and investors expect you to address these issues." "How you communicate is super important." His view on the "Mission-focused company" approach taken by Coinbase: "For me, that probably means that I will never be a Coinbase customer because I care deeply about the company to whom I give my money." "I think of Procter & Gamble as the gold standard on how to communicate effectively around these thorny questions."

58:04 A book that has greatly influenced his life:

• The Autobiography of Malcom X, by Malcom X and Alex Haley (1965)

59:00- Who were your mentors, and what did you learn from them?

1. Marty Dunn, former Deputy Director and Chief Counsel of the SEC and former partner at OMM and MoFo.
2. David Martin, partner at Covington & Burling. He was his "Dutch uncle" ("someone who is going to be very hard on you privately, but in public will sing your praises.")

1:00:35 - Are there any quotes you think of often or live your life by?

• From Trillion Dollar Coach (biography of Bill Campbell) by Alan Eagle, Eric Schmidt and Jonathan Rosenberg (2019): “Leadership is not about you, it’s about service to something bigger: the company, the team. Bill believed that good leaders grow over time, that leadership accrues to them from their teams. He thought people who were curious and wanted to learn new things were best suited for this. There was no room in this formula for smart alecks and their hubris.”

1:02:17 - An unusual habit or an absurd thing that he loves: "Zombie Apocalypse everything!"

1:03:04 - The living person he most admires: A lot of people but it's a tie: AOC (on the way she uses social media) and Bill Gates (on his transition from business to making a better world).

Keir Gumbs is the Chief Legal Officer of Broadridge Financial Solutions, Inc., where he oversees the legal, compliance and physical security teams. Prior to joining Broadridge, Keir served as Deputy General Counsel and Deputy Corporate Secretary of Uber. Before Uber, Keir was a Partner for nearly a decade at Covington & Burling. Keir’s career includes six years of service with the SEC, where, immediately prior to joining Covington & Burling in 2005, he served as Counsel to SEC Commissioner Roel C. Campos.

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You can follow Evan on social media at:

Twitter: @evanepstein

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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

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