Yahoo and CorpGov Interview Benjamin Gordon on WeWork: Corporate Governance, Lessons Learned, and Investment Implications
The doomed IPO of WeWork parent We Co. is likely to pressure technology companies to embrace more robust corporate governance and discourage features such as tiered voting shares that fueled investor ire. That’s according to Benjamin Gordon, CEO of Cambridge Capital, who spoke to CorpGov on a wide range of topics from the struggles of Uber Technologies, Inc. and Lyft, Inc. to the brash approach to controls at Facebook, Inc. to Alphabet Inc.’s emphasis on social responsibility. Gordon addresses how the SEC could change how IPOs, investors, and CEOs function in a new age of governance. He also explains the qualities found in the best corporate directors, pointing out that diversity goes beyond race and sex and should also encompass breadth of skills and experience. The full interview is below.
Mr. Gordon has founded four firms, advised over 50 companies, and invested in some of the most successful firms in transportation, logistics, and supply chain technology. At Cambridge Capital, a West Palm Beach-based private equity firm, Benjamin invested in transportation, logistics, and supply chain technology companies. The Cambridge team includes CEOs and leaders who have built companies like GENCO, FedEx Supply Chain, Kuehne & Nagel LeadLogistics, UPS, and others. At BGSA, Mr. Gordon provided M&A advisory services to top companies in transportation, logistics, and technology.He worked with firms like UPS, DHL, Kuehne & Nagel, Agility Logistics, NFI Logistics, GENCO, Nations Express, Raytrans, Echo Global, Dixie, Wilpak, and others. As a recognized expert in the supply chain and technology sector, Mr. Gordon is trusted for his insights. He has been published in Fortune, CNBC, SupplyChainBrain, Data Driven Investor, Supply Chain 247, Freightwaves, and Supply Chain Management Review. He has been interviewed or featured by the New York Times, The Wall Street Journal, Forbes, BusinessWeek, ABC, Lehrer News Hour, Journal of Commerce, Transport Topics, Supply Chain Management Quarterly, and Traffic World. He is also Editor-in-Chief of Supply Chains, a Medium publication. Benjamin earned a Masters in Business Administration from Harvard Business School and a Bachelor of Arts degree from Yale College.
CorpGov: What is the key to good corporate governance at a rising technology company and what steps do you take to achieve it?
Mr. Gordon: Corporate governance is all about proper roles and responsibilities. This is true for technology companies and for all kinds of companies. In technology companies it is particularly important for two reasons.
First, high growth companies tend to focus on growth. That tends to trump all else. As an HBS professor of mine once said, “You can have, growth, margins, and controls. Pick two!” Growth can sometimes undermine governance and controls, because companies may view it as an impediment. A good example is Facebook. Do you think it’s a coincidence that their slogan at one point was “Move fast and break things”?
Second, technology companies often dramatize the importance of the founder and CEO. The myth of the inventor who started his or her business in a garage continues to this day. It is terrific to foster a culture of innovation. But sometimes that creates a situation where a board is reluctant to impose governance controls on that technology founder.
WeWork is a recent example of a company that paid a price because its board did not impose proper governance. Its founder was both CEO and Chairman. And he was allowed to engage in related party transactions, e.g. the sale of his own real estate to the company, the sale of corporate trademarks to the company, and more. These factors played a price in WeWork’s sudden decline…
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