The relationship between the board and the CEO can be essential to the success of a life sciences company. Drawing from his experience at both sides, Alan Levy shares his advice on how to make that relationship work.
Once known as the person who introduced portable defibrillators on the market in the 1990s, Alan Levy has spent more than four decades in leadership roles in the life sciences sector. Those include CEO at Chrono Therapeutics and Incline Therapeutics, CEO and President at Northstar Neuroscience and Heartstream, President at Heart Technology, and numerous leadership roles at Johnson & Johnson. He has also spent time on the board of numerous companies, and was most recently appointed Chairman of the Board at Salvia BioElectronics, a Dutch biotech developing neuromodulation treatments.
What are the most important steps in your career that brought you where you are at the moment?
First of all, having the technical background is not essential for a CEO or a board member, but I think it is very helpful. I started out doing basic research and did that for several years of my career, and then switched to medical programs. I’ve been involved with medical programs ever since then. I find that very rewarding; it’s something I feel very passionate about and you can get your employees, team members, and investors passionate about, because you are doing something very important.
I spent the first 20 years of my career at J&J, and I would say leaving J&J and going to the startup world, where I’ve been involved with multiple companies as both a CEO and board member and chairman of the board, was very formative to my career.
How would you compare those different roles?
I am a very strong believer that the CEO is the person who is running the company, that it is difficult if not impossible — and generally doesn’t end well — if the board tries to run the company. So one of the most important things that a board member has to learn is to let the CEO run the company. If the board doesn’t think that the CEO is doing a good job, their role is not to try to run the company over them, but to replace them.
That’s difficult for a lot of new board members to appreciate. There are less experienced board members, or candidly just some venture capitalists that I don’t think are very good managers, who try to run the company instead of letting the CEO run the company. So it is something that does happen, particularly with a first-time CEO—you have to help them, you have to advise them, you have to be supportive, but you can’t try to run the company. They have to run the company.
What makes a good board member?
One thing I advise CEOs is, when you can — and the CEOs often cannot because the venture fund chooses who the board member is — but when they can, choose board members who will really be helpful: that will listen, that will be prepared, that will read the deck, that will be available when there are issues, that are thoughtful. Not every board member has those skills, but those are the kinds of board members who can be particularly helpful to the CEO.
How important is the role of the chairman?
The chairman leads the board meetings, so they have additional responsibility. They help the CEO in preparing the board agenda by soliciting input from the board members and trying to advise the CEO on the board meeting, on the board deck and so on, but also I think they have to be more available compared to a board member. And it’s important for the CEO and the chairman to trust one another. I think it’s important for the CEO and other board members to trust one another, but it’s critically important that there is trust between the CEO and the chairman. If not, it doesn’t usually end well.
Are there different skills that each position requires?
The CEO, particularly in a startup company, has to build the team. So they have to select people who not only have the right competence, but will fit well. The CEO is responsible for the budget, but most board members have some financial expertise, so at least they can look at a balance sheet and see whether the company is heading in the right direction or the wrong direction.
On the board, I think you have to be a good listener, you have to be prepared to work, you have to read the information that is provided, you have to be available and you have to be helpful and thoughtful with regard to strategic issues. There are also other issues that companies face: regulatory issues, clinical issues, financing issues, personnel issues… If a board member has had experience with any of those, they can be very helpful.
When I am chairman, I try very hard to build that trust and build that relationship with the CEO. I think that’s extremely important. Being a CEO is a very lonely job. A lot of CEOs are uncomfortable sharing their worries with the people beneath them, and in many cases they are uncomfortable sharing their concerns with the board, thinking that will show weakness. If they can establish a relationship of trust with the chairman, it makes their job much easier and increases the chances of success.
Having been in all these positions, which one was your favorite?
Being CEO. First of all, you build the team and there is a special relationship, particularly in an early-stage company, where there is a very close, warm relationship between everyone on the team. As a board member, you are one step removed, so you don’t have that, you aren’t as much a part of the team as you are as a CEO.