Steven Galbraith – In the Boardroom (Capital Allocators, EP.48)

One common refrain across my conversations has been the importance and subtleties of effective governance in making optimal investment decisions.  Alongside Steven Galbraith’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 outlook 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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Show Notes

2:45 – Update on Narragansett Brewery

            2:53 – How Passion Investors Helped Revive Narragansett Beer

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