Jun 1, 2022 Nurole logo
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Breaking Through Imposter Syndrome and into the Boardroom | Risk Committee Chair at Morgan Stanley and Rathbones Group Terri Duhon

Terri Duhon

Terri Duhon may have started as a Derivatives Trader at J.P. Morgan, but she has since embarked upon a prolific board-level career as a Non-Executive Director and Risk Committee Chair at Morgan Stanley and the Rathbones Group. As a published author, public speaker and educator, Terri’s expertise in financial markets has given her a special insight into the importance of risk management both in and out of the boardroom.

🎙️ You can listen to the full podcast interview with Terri on Spotify and Apple Podcasts

Listen to the full ninth episode of the Enter the Boardroom with Nurole podcast for:

  • Tips on how to distinguish yourself when seeking your first board role
  • How to hire younger and more diverse board candidates 
  • Key questions risk specialists ask to add value to boards
  • How risk committees can establish a strong risk culture

Like others, you had some difficulty securing your first board role. What were some of the challenges you faced as a young executive trying to break into the boardroom and how did you overcome them?

I faced the classic Catch-22 which is ‘to get on a board you have to be on a board’. The reason that Catch-22 exists is that most board members have followed a very traditional path. I spent ten years on the trading floor and became an entrepreneur, at which point I spent ten more years building my own business. I thought that would establish the core skills needed to sit on a board, but I was on the non-traditional path and many people have trouble figuring out the value someone brings when they come from a different background.

This is the diversity conversation in a nutshell – we all want to hire diverse candidates, but those candidates are generally not on the traditional path where they have the specific experience at large organisations that we’re looking for. They might have unbelievable potential to bring different perspectives to the table, but it’s hard for the traditional interview process to uncover that potential. For instance, there’s a lot of interest in getting younger people on boards, but what I hear from a lot of the younger people I work with or mentor is that they get the same message back every time: they do not have the board experience hirers are looking for.

The challenge I had is that I was relatively young for the boardroom and no one thought I could add value without the experience to support it. My transition to the boardroom was incredibly challenging, but what I figured is that every ‘no’ was another step toward the next ‘yes’. So I just had to figure out how to address each ‘no’. It usually boiled down to either experience or credibility, so then it became a matter of putting more of myself out there.

I was writing a book at the time, so, when the book was finally published, I went around to every headhunter and board member I knew to give them a copy. What was interesting was that, after I wrote the book, the number of people who acknowledged that I was a financial expert increased. Similarly, when I wanted to lecture at Said Business School I wasn’t an academic and I didn’t have a PhD, so I had to keep knocking at the door over and over until I secured a position. As soon as that happened, I went around to every headhunter and board member I knew again to let them know. It’s really about finding a way to get those traditional ‘ticks’ that show hirers that you’re successful. So every time I had some new accomplishment to add, I did. And, eventually, that relationship building and progress-showing got me into the boardroom.

If you could give some advice to board members seeking new candidates, what would you ask them to change about their assessment process and the way they view those candidates?

Not everybody is going to have the experience, so what they should be looking for is potential. The easiest way to bring someone on board is if they don’t have to Chair something, but when you’re looking for a specific Chair it becomes harder, especially in highly regulated industries. It’s not that you can’t pick things up, but it’s harder to justify hiring someone without experience for those roles. 

Morgan Stanley would have never let me Chair its Risk Committee on day one, but what they did do is let me onto the board in a Non-Executive role. From there, they saw my regulatory experience on the board at the CHAPS Cleaning Company and vetted me while I was working for them. What they did with me, and what they’ve done a few times since, is they’ve gone out searching for candidates to fill a specific role and ended up hiring multiple candidates at once: one to fill the role and maybe another to trial for their potential. It’s a means of succession planning and bringing new, less experienced voices to the boardroom. In my case, they initially had doubts about whether I was prepared for and interested in non-executive work. What I proved during my time there was that I was not only prepared but also very risk-oriented, which gave them the idea that I would be well-suited to Chairing the Risk Committee.

Everyone comes to the table with some unique background. Why can’t that turn into some uniquely valuable perspective for a board somewhere down the line?

As a risk specialist with a financial services background, what value do you think risk-oriented perspectives can bring to the boardroom?

Risk Committees predominantly exist in a very regulated space, especially in the financial services industry. One of the things I’ve observed in my career is that the regulatory approach has become more prescriptive, which makes sense given the financial crisis of 2008. A lot of the subsequent regulations can be seen as box-ticking to the point where you literally have to employ an army of people to comply with them, which means taking attention away from actually thinking about risk. 

The reason that’s dangerous is that the regulatory framework is generic and not specific to individual businesses. Business leaders need to ask themselves if the regulatory framework can cover their specific risks, if they’re adequately capitalised for the risks they run and if they’re doing the right thing beyond what regulators ask of them.

J.P. Morgan was at the forefront of risk innovation. We had a very risk-oriented mindset. Although I was a trader, my official title was Risk Manager, and so I recognise the importance of finding the conversation concerning risk regulation that revolves around principles over box-ticking. It’s about asking if we’re confident in our risk framework. It doesn’t usually change much, but it should evolve alongside the business. Compliance is the bare minimum, but we need to also think about any risk appropriately and challenge leadership when it isn't being taken seriously.

There’s a good report by Slaughter and May that was released after the TSB IT failure where they did a review of what happened. One of the things observed was that people who didn’t feel confident about a subject didn’t challenge others on that subject. That is one of the reasons boards need expertise around the table: they need people who can ask those questions, no matter how basic. If a board can get its risk culture right and have the right people challenging and receiving challenges, they can identify risks and escalate them appropriately.

And what are some of the questions a risk specialist or committee should be asking to help identify those risks and establish a beneficial risk culture?

There’s a lot of governance. As a risk committee, we shouldn’t be second-guessing the executive team. That’s not our job. Instead, we make sure that the process by which they got to the decision is correct. So we look to the structure of our committees to ensure they can do that well. Who’s on the committee? Is it effective? Are the questions robust? Do we challenge each other? Do we incite change through the committee? We’re trying to probe the process so we’re not just ticking boxes. We’re looking for the appropriate risk culture.

One of the things I think is important to risk culture is a ‘lessons learned process’. When something does happen I don’t want fingers being pointed, I want root causes. It’s not about the person who allowed it to happen, but the structure and how it can be corrected. What was missing? What happened? Where was the failure? And, if a person was at fault, how do we support and teach them?

A culture of finger-pointing will never get to the root cause. People who make mistakes will never come forward for fear of being blamed and punished, which is bad because escalation is how we identify and fix those mistakes. And this is especially true for financial services, which is a risk-taking industry with a certain ‘risk appetite’ that allows for a level of misses and mistakes. We want to not only encourage people to come forward but reward those who alert us to mistakes so we can continue to improve.

Nurole Insight

Terri’s journey to the boardroom may be unique, but the challenges she faced as a young working mother without traditional ‘board ready’ experience are anything but. Establishing a plan of action that involves using your non-traditional background to hit traditional benchmarks for board readiness can be a good way to break into your first board role, which you can then use as a proving ground. Perseverance is essential when seeking a board role, but shifting perspectives coupled with board recruitment platforms like Nurole can help alleviate the pressure of building your board resume by placing your credentials in front of decision-makers who understand the value of board diversity.

🎙️ You can listen to the podcast Enter the Boardroom on Spotify and Apple Podcasts to stay up-to-date on the latest in board-level expertise. 

Let's finish with a few quick fire questions...

One book every board member should read?

Billion Dollar Whale By Tom Wright and Bradley Hope

Favourite quote?

“We are all failures - at least the best of us are.” - J.M. Barrie

Favourite holiday?

Hiking across Turkey and staying with people along the way

Most significant professional insight?

When picking a board, ask yourself if you’re going to learn from the people around the table.

Favourite app?

Wise (and not just because I sit on the board!)

If you are looking for senior executive and non-executive director roles, Nurole's innovative recruitment platform can help.

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