A year ago, I sat down with my friend Steven Galbraith to record the first conversation of Capital Allocators. We had a great time, I thought I might be onto something, and I promptly lost the recording for the next two days. Eventually, I got the technology to work, recorded a few more, and went from there. It’s been a great journey and an incredibly fun time, and I’m eagerly looking forward to the next year.
One common refrain across my conversations has been the importance and subtleties of effective governance in making optimal investment decisions. Alongside Steve’s incredible career as an analyst, strategist, portfolio manager, and entrepreneur in the asset management business, he has served on as many Boards as anyone I know. I imagine many of you have heard Steve’s story, but if not, you may want to have a listen to the very first episode of Capital Allocators before diving in here.
Our conversation today starts with an update on Steve’s personal investment in the Narragansett Beer Company and moves into a practical discussion inside the Board rooms of each of his current seats that range across a university, a large family office, a public company, a government agency, and two early stage fintech companies. We touch on time allocation, governance structure, Board composition, adding value, the politics of Boards, and the motivation of Board members.
We also get an update on Steve’s family office, that he’s managing alongside his wife Lucy, a seasoned distressed debt investor, and we close with our brief, contrary outlooks on the baseball season.
Steve’s perspective and insights on the real world of Boards is second to none, and this conversation is as full of gems as our first one.
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2:45 – Update on Narragansett Brewery
4:28 – Narragansett in the White House
5:19 – With all of the boards that he serves on, how does he manage his time
7:34 – How much time do these boards assume Steven is investing in them
9:32 – Highest functioning board
11:46 – Maintaining stability between the board and investment team
16:29 – What Warren Buffet had to say about the Tufts endowment
17:45 – What are the board dynamics in a family office
22:22 – Overview of for-profit boards
26:12 – Is the familial relationships of board members another way an investment committee could construct a board
26:56– Could a university or foundation create a board like this with close familial ties amongst members
28:46 – Optimal board structure of a foundation
29:57 – Steve’s time in government serving on a board
32:52 – Board of startups and early stage companies
35:02 – A look at Steve’s family office
37:20 – What do the analytics of financial companies look like 5-10 years from now
38:35 – Looking at the quality of analytics he currently gets from his outsourced team compared to larger firms he has worked with
39:37 – What is Steve seeing in the markets
40:42 – What is the most interesting idea that’s come across Steve’s plate in the past year
44:32 – Politics of boards and what drives them
48:36 – Closing Questions