EVOLUTION IN THE BOARDROOM- FRANCISCO SANCHEZ

SENIOR MANAGING DIRECTOR, PT CAPITAL & CHAIRMAN, CEO, CNS GLOBAL CONSULTING

As a member of the board of directors for food industry giant Archer Daniels Midland, he thinks the traditional role of company governance is evolving.

A BOARD'S relationship with management and the dominance of chief executive and finance officers in the choice of directors is likely to persist, according to Sánchez. However, there is a movement toward greater attention to diversity – ethnic, gender and skill-sets – among those who sit at the table. Moreover, company boards are increasingly having to respond to a need to devote more attention to ESG: environment social governance. Socially responsible investors are looking for these factors in companies. Sánchez warns that companies that do not address ESG and ignore activists who raise these types of issues, "do it at their peril" and could have things forced on them such as board members who are not their choice.

Under these circumstances, this is where there is likely to be more interest in candidates such as Francisco Sánchez, who may not fit the usual CEO or CFO profile for a directorship but adds diversity, as the son of Spanish immigrants and as a former White House administrator and internal trade specialist is familiar with public interest and public policy. "I may see things that others might not see because they are focused on the bottom line," Sánchez said.

After five years with Obama, Sánchez decided to return to the public sector. In 2013, he became chairman and CEO of CNS Global Advisors, an investment firm based in Washington D.C., a position he still holds. He also wanted to be a corporate director for a company with an international focus. As he was leaving the White House in 2013, he met ADM's then CEO Patricia Woertz who saw him as a right fit to fill a director's seat. "They were looking for someone with international and government experience.” The next year, he joined the ADM board. It took more than two years before he felt he knew the company and could be valuable.

Sánchez, who divides his time between Florida and Washington DC, serves on the board's sustainability committee and expresses pride that ADM is a good corporate citizen and doing everything it can to be a good steward of the environment. The company also has been looking for products that are sustainable and healthy under the company's current CEO, Juan Luciano.

Sánchez said the ADM board is very different now than when he started. There are two women, one who is Afro-Latino (Debra Sandler), who both come from the marketing world, in the food business. A recent addition is an African American, who is a high-level executive at a big company who is not a CEO, but is experienced in global procurement which is important because ADM sells to 80 countries,

On the benefit of board diversification, Sánchez cites both a positive impact on the bottom line and its help in spotting trends. "The fact that you have people who always aren't going to see things from the same perspective is a great value," he said, "People that bring different life experiences, different cultural experiences are going to help enhance where you are going."

An awareness of trends, Sánchez explains, is a factor in how ADM is evolving. "The company that we are today is very different than eight years ago, and certainly very different than it was 20 years ago. Historically, ADM did four things," he said: "We processed agricultural commodities, stored them - big silos, we transported them by train, by ship by truck, and we traded them." For nearly all of the company's 110 years, these activities probably represented 95 percent or more of ADM's business, Sánchez says. "By 2025, 25 percent of our business is going to come from flavors, ingredients, creating products that come from making sustainable products, everything from plantbased foods to jet fuel."

Looking forward the traditional role of a company board, that of setting a vision with senior management and approving a budget, will not change, Sánchez says, but he adds, "paying attention to the impact the company is having on the environment, paying attention to how they are contributing to diversity and inclusion, these issues are here to stay.