A new, data-driven way to build a biotech board
by Peter Kolchinsky
Peter Kolchinsky is RA Capital’s founder and Managing Partner.
Source: Wikimedia Commons
February 8, 2022
Getting the band back together? Picking sides for schoolyard basketball? Assembling a crack team of burglars for one last heist? Or are you a biotech CEO looking for a board member with cardiovascular clinical development experience?
We’re building a tool that will be able to help with at least one of these missions. And if you’re currently on a biotech board or someday would like to be on a biotech board, we’re hoping that you’ll use it. It’s called Gateway, and it’s free. You can find it here.
First, let’s talk about boards
Biotech boards typically comprise the company’s CEO, maybe a few of its investors (RA’s investment team members sit on boards for some of our portfolio companies; I’m on six boards myself), and a handful of independent directors.
While legally vested with significant responsibility and power, practically speaking a board's work entails offering advice and ratifying management's decisions. More specifically, a board listens, pressure-tests management’s assumptions, helps brainstorm solutions to problems, signs various documents, and makes introductions when appropriate. The investors on the board may do double duty as actual investors, offering feedback on what would make them want to invest more and whether and how much they would invest in the next round under varying circumstances.
Boards don’t do management’s job for them. But having a board member who knows how to design preclinical experiments means that the board can count on that person to vouch for the VP of Translational Medicine (or else alert the CEO and board if the person in that role isn’t cutting it). If a board doesn’t have members who can get into the weeds on manufacturing, clinical, regulatory, commercial, audit, financing, or partnership matters, then it’s harder for the board to know whether the right people are running the company.
Some might say that the board just needs to know that the right CEO is on the job and trust the CEO to hire the right people. But biotech is still a young, growing industry with CEOs who often look to their boards for guidance on whether they really have the best people in each role. So, while a board shouldn’t micromanage, it has to be knowledgeable when a CEO needs its experience and guidance.
A board-building tool
Gateway is a website where board-qualified individuals can maintain a profile, visualize how their strengths add up with those of other directors of the boards they are on, and discover who else they might recruit to their boards.
Gateway asks each person about their strengths and interests as board members (or prospective board members) across 20 domains (e.g., clinical development, taking a company public, auditing financials, CEO mentoring, etc.), and puts all that together to show that board’s strengths and weaknesses. If a board is weak in any particular areas, Gateway can suggest candidates who are strong in those domains. Are two members retiring? No problem – just uncheck them from your current roster, review the gaps those departures create, and ask Gateway to suggest candidates who could best round out the board and restore its diversity and strengths.
Four Core Principles for Biotech Board Meetings
Read experienced board member Adam Koppel’s thoughts on running productive biotech board meetings.
The idea for Gateway emerged from some paper exercises we observed a few boards go through to try to ascertain their gaps. We thought the exercises were excellent, but they were time consuming and rare. I’ve witnessed only one myself on all the boards I’ve been on, but since we launched Gateway, all my boards have used the tool, and it’s sparked good discussions.
I think it’s key to have a board that includes smart people from different backgrounds, complementary mindsets, and a wide range of experiences – both professional and personal. Unfortunately, it tends to be easier, faster, and oh-so-tempting to work with people we’ve worked with before – to draw from the networks we already have instead of building broader, more diverse ones.*
We think using Gateway to consider a wide range of candidates will allow companies to avoid the risk of groupthink on their boards. Gateway is also designed to make it possible to attract and consider more first-timers.
Anyone who serves on a board or has C-suite biotech experience and would like to serve on a board can create a profile in the Gateway database and complete the strength assessment. That makes them discoverable to others who are building out their boards. And if we’re lucky, people will start calling people. That’s the goal.
Fantasy boardball
Any member of a board can play around in Gateway to see how the board might evolve by removing some directors, seeing which domains weaken, and trying out new candidates that Gateway suggests. Gateway considers whether a candidate has interest in joining additional boards and their geographic preferences (though Zoom widens the playing field). We’ll be increasing the filter options to let users get more granular in the experiences they are looking for.
Gateway even lets you create a totally mock board – so a CEO could ask “If I started a company, what if I recruited the six people I would most want to work with? Would they be as strong across all domains as I would want my board to be? Who else should I consider?” The board might be fictional, but the people are real.
Until you try it, you have no idea how much fun it can be to play fantasy football (or Pokémon trainer) with a biotech board.
Everyone assesses their own strengths, and Gateway makes doing so pretty easy with options like:
A) This is my strength, and I can lead in this domain
B) I have some experience in this
C) This is not my thing
Those tend to be the choices. Gateway doesn’t leave anyone wondering, “Am I a six out of 10, or a seven?” Seasoned executives know how much work it is to serve on a board. If you say that you have a lot of US commercialization experience, people will look to you for answers. If you say that you are strong at audit, you’re likely to be asked to chair the committee.
Ideally, your board includes individuals who are strong in your key domains – and Gateway makes it easy to figure that out. When I filled out my Gateway profile, I indicated I’m strong at board best practices, crossover/IPO strategy, preclinical experiment design, indication selection (because I can turn to our TechAtlas thinktank), and a few other things. I can contribute to a discussion of clinical development, compensation, and US commercialization. But audit and ex-US commercialization? Totally not my thing. And there’s no shame in that.
Gateway is still evolving. We’re going to be allowing people to create their own questions to push out to their own boards, because we recognize that boards may want to assess their strengths in domains that are uniquely relevant to them.
So, who should fill out a profile?
If you’re on a biotech board, definitely join Gateway and fill out a profile and add all the board positions you currently hold.
If you’re a CEO, ask your current board members to fill out a profile. It’s possible they may already be in Gateway and just need to add your board to their profile, so they can be accounted for in your board’s strength assessment.
If you’ve never sat on a biotech board but you’ve attended open board sessions for your company as a member of the executive team and have particular expertise you feel would benefit another company, please join Gateway and fill out your profile. This will make you discoverable to companies looking for new board members.
Not everyone who is ready to contribute at the board level of a company realizes it. So if you know someone who could be an asset, encourage them to join Gateway. RA Capital provides a lot of educational resources for innovators and boards. Our SABER guide (“Strategic Alignment: Board & Executive Resource”) can demystify what being on a board entails and hopefully inspire more people to take the leap.
If you are a CEO, look at your direct reports and consider which of them might gain from serving on a board. Encourage them to join Gateway as a first step, as well as let recruiters know that they are open to board roles. Yes, it means that it will distract them a little from their current job. But it will also likely teach them to think through problems that your company may also encounter, and you’ll be glad your colleague has the added skills to help work through the challenge.
Although Gateway was created by RA Capital, it’s open to all. Our peer investors are welcome to join, too. Many already have. Gateway won’t suggest investors as board candidates since investors will rarely join a company they aren’t invested in, but if an investor is on your board, you’ll want them to fill out a profile to see what strengths they bring to it. Probably quite a few. Biotech investors are often scientists and can put a lot of points on the board when it comes to both science domains as well as finance strategy. In fact, one of my hopes is that management teams will stop thinking of how many investors they have on their boards but appreciate instead the unique strengths that specific investors offer, recognizing that there’s no right or wrong number of investors as long as they are adding needed insight.
We’re gonna need a bigger pool
There are more biotech companies than ever, and they’re fighting over limited resources. So, some people wind up on too many boards – and are therefore unable to contribute thoughtfully enough to each one. The biotech industry needs a bigger pool of board candidates.
In practice, that means that every company should consider adding someone to their board who has never had any board experience. If we did that for the next five years, we would dramatically reduce the shortage of board members we have now.
We will do our best to broaden the pool of eligible board candidates while making sure that people who are clearly unqualified don’t clog the algorithm. Might our judgment be off? Sure, it’s possible. But Gateway is a lot less subjective than the current clubby and data-poor ways we construct boards today. Gateway can help you avoid sampling bias, incorporate diverse viewpoints, and identify hidden talent. What Moneyball did for baseball, we hope Gateway will do for biotech boards. We think most members of our ecosystem will find it refreshing. We hope you’ll give it a try.
*While directors may not be employees of the company, federal and state anti-discrimination laws prohibit employers from making hiring and other employment-related decisions based on gender, race, sexual orientation, or identity or, other protected categories. For this reason, the database does not ask candidates to self-identify as being a member of any protected category. While one might think (we certainly would like to) that California’s diversity requirement for public companies headquartered there means that we should be able to design Gateway to assist companies in fulfilling those requirements, California’s board diversity laws are being legally challenged on multiple fronts, and therefore it is not clear how one can take protected class status formally into account when recruiting directors. We recognize that diversity takes innumerable forms and encourage anyone who is creating a Gateway profile to speak (in their bio) to what in their lived experience might allow them to bring a unique perspective to corporate governance. To be clear, inclusion of such information is entirely voluntary, and to the extent that any information in the database is used for employment purposes, your voluntary self-disclosure of information such as a race and gender will not affect your opportunities for employment or any terms and conditions of employment.
Please click here for important RA Capital disclosures.
Further Reading
