In this episode of Women @ RopesTalk, IP transactions partner Megan Baca is joined by Kim McCaslin, a managing director at Bain Capital, for an in-depth conversation around Bain’s environmental, social and governance (ESG) goals and commitment to advance diversity, equity and inclusion (DE&I). As the leader of Bain Capital’s portfolio group in North America, Kim discusses her group’s values-driven focus on growing great companies “in the right way”—with integrity, humility, respect for people, and a focus on citizenship and lasting impact. She breaks down how her group prioritizes ESG-related goals and provides insights about their innovative approach to strengthening diversity and inclusion, both at Bain and its portfolio companies.
Megan Baca: Welcome, and thank you for joining us on our latest installment of Women @ RopesTalk, a podcast series brought to you by The Women's Forum at Ropes & Gray. In this podcast, we spotlight extraordinary women who have had successful careers and interesting lives, and are also making a positive impact in their workplaces and in their communities. We feature women attorneys at Ropes & Gray in conversation with prominent women clients, industry leaders, entrepreneurs and others, and about their careers and what's led to their successes, the challenges they’ve faced, and the hard-earned wisdom they've acquired. I’m Megan Baca, a partner at Ropes & Gray with a practice focusing on intellectual property and technology transactions, and I’m also co-head of the firm’s digital health initiative. I’m based in Silicon Valley. On this episode, we’re going to take a little bit of a break from our traditional format, and will have an in-depth discussion with Kim McCaslin about Bain Capital’s ESG (or environmental, social and governance) and DE&I (or diversity, equity and inclusion) efforts. Welcome, Kim, and thanks so much for joining us today—we really appreciate your time. To kick things off, could you please introduce yourself to our listeners?
Kim McCaslin: I’m a managing director at Bain Capital. I joined the firm way back in 2006, after 12 years at other places, during which I also went to business school. I started my career actually at Andersen Consulting (which is now Accenture), was with Mercer Oliver Wyman and then Capital One Financial before coming to Bain Capital. Across those I was doing a variety of strategy, operating, even tech, sometimes even coding roles, and then more recently, M&A at Capital One before coming to Bain Capital. I really enjoyed the deal-side of the work that I did in those places at Capital One directly, and also in PE advisory at Mercer before that, and particularly the intersection of the energy and hustle of the deal environment with the rigor of operational execution and getting things done, which is exactly what we do here at Bain Capital.
Megan Baca: That’s great. Would you mind expanding a bit on what you do for Bain Capital and the day-to-day there?
Kim McCaslin: As part of our private equity team, I lead our portfolio group in North America, and I’m also a partner in our consumer team. Our portfolio team is a group of experienced executives who work closely with our companies, primarily once we've invested and throughout the investment lifecycle, and also with our deal teams from diligence through the full ownership cycle to define and deliver against that investment thesis, and our value creation plans, and the overall investment goals. So, the day-in-the-life looks, very much for our team, a lot of interaction with our portfolio companies out there with them (when we can get out there with them) and thinking about plans, goals, aspirations, and how we're going to execute all of that together.
Megan Baca: You touched upon what attracted you to Bain Capital, but how do you feel that what you do there aligns with your own personal values? I know that's obviously super important and great for folks to be able to actually find in their professional work as well.
Kim McCaslin: It is—it's really important and is a major reason why we are all where we are at Bain Capital. Our goal is to build and grow great companies, but also to do that in the right way with a very high integrity, respect for people, and enthusiasm to bring out the best in every one of the situations that we're involved with, and to create these businesses that thrive and have positive impacts for their customers, for their employees and their employees' families, shareholders, and importantly also in their communities. There's just a variety of stakeholders who benefit from growthful businesses doing important work, and that's really exciting. And again, the way that we do it is core to who we are—this high integrity, humility, focus on citizenship, and through the trust-based partnerships—I mentioned being out with our companies every day—really establishing those relationships that allows us to work together closely and think differently. We're trying to accomplish some really aspirational things, but doing that in a high-partnership way is really important. What's powerful is that you can actually talk to Bain Capital team members across the globe and will hear the same thing about how these values really drive the actions in the day-to-day. It's an incredible group of people.
Megan Baca: What makes the culture at Bain Capital different to some of your peer firms?
Kim McCaslin: I mentioned earlier this word of "humility," and it really is a culture of humility. It was just incredibly accomplished people who, at the same time, have this constant growth mindset and really want to learn and improve every day, and just do the right thing. There's a lot of trust and support of each other—our teams and the management teams—and realizing that we all can learn something every day, and to ask the right questions, and to be inquisitive, and then be really supportive as we're going into whatever the situations are. When you lead with that kind of environment, it really is defining for the organization and allows you to accomplish a lot more together than we could as individuals, and so that approach has been really important to us over the many, many years.
Megan Baca: Turning to ESG, how does Bain Capital’s mission and core values relate to its ESG efforts?
Kim McCaslin: Yes, that's a great question. As mentioned, our values are really a central part of the "why." One of our values is this commitment to lasting impact, and that is a perfect fit with our ESG goals—and the “ESG” is a major component of that lasting impact equation. So, we've been actually leaning into those efforts for a while, having these discussions and board meetings, and as it applies to each individual company situation, and for ourselves. But, again, going back to that just doing what makes sense and is right, and taking into account all stakeholders surrounding ourselves as well as our companies. Now we're benefiting from an even more structured approach as these topics have continued to evolve, and we're putting a lot more of that structure and effort around that and approach in our day-to-day, which has really been able to accelerate some of the efforts that we've already had underway.
Megan Baca: I know Bain Capital makes a number of different investments in companies across a wide variety of industries. How do you think about setting specific ESG-related goals for your portfolio companies?
Kim McCaslin: As you know, there are a lot of important elements in ESG—you look at a variety of different frameworks that are out there and it covers a lot of territory. What we've done is try to prioritize, in the near-term, five major categories, and we've spent a lot of effort looking at how we will cover those. It's still a big agenda, but it's five categories—they are: governance and stewardship; sustainable growth and reducing climate impact; fair employment, engagement and well-being; diversity, equity and inclusion; and community engagement. Those five are areas that we're putting particular emphasis around for ourselves as well as for our portfolio companies. When I say that, it means that it's not just about let's pick a target, or a goal or an aspiration within each one of those, but how do we actually build a system for ourselves and for our companies that allows us to have this continuous improvement so that not only we'll get to one milestone, but how do we get to the next and the next, and that the company has the capabilities to build on that for the future? And so, trying to pick these areas where we can really go deep and ensure that we get, again, that kind of impact for the long-term is the goal.
Megan Baca: I’m sure you come across management teams with differing levels of sophistication with respect to these issues, so in that context, how do you work with those teams to help them improve their governance?
Kim McCaslin: Just generally across all topics in ESG, we're putting the same level of rigor and intensity around those conversations as we would any of our other financial growth goals or organizational goals. What that means is being really intentional about, "What is the blueprint? What's the path forward?" As you said really well, every company is going to have different levels where their starting place is. It's a bit of, "Come as you are—let's meet you where you are," and figure out what real progress looks like for that company, and how do we get to put the right resources and emphasis around the things that will have material impact, and where that company is uniquely positioned to be able to have the impact. You mentioned governance—governance is important across the board. As our global head of ESG, Tricia Winton, says, "Good governance is that umbrella through which all these programs get the right traction.” Absolutely right. We have an intentional approach there with a consistent set of practices that centers around ensuring that the breadth of topics get visibility and coverage, so we're covering the things that we should, and that there's an appropriate forum for a really engaged discussion on those topics, so the right time to really understand and drive. When you set up those structures with that focus, energy just gets channeled and optimized in the right way to get you results. So, our teams are there thinking about that with the same intensity that we have every other part of our investment thesis, and working with the teams to not only just set the agendas, but build the capabilities. Then in our board rooms, we're making the time for these topics to go after them in a really engaged way. And that's how all the pieces come together.
Megan Baca: Let’s spend a little more time on board governance—are there any best practices or key learnings in terms of how people should think about setting up boards or committees to ensure they have the right focus on ESG matters?
Kim McCaslin: It's a great question, and there are actually multiple approaches to this out there, and we're learning from those. At the highest level, one of the things we're looking at is getting into the details. Are agendas right? Are the roles clear? Is there follow-through? Are the right people even around the table? We should come back to that—that's a great effort also under DE&I. You have to really consider all those aspects. Then in terms of structural, if you look at the ESG topics, they cover a wide spectrum, and many of those could get covered in existing forums if the agenda's structured appropriately. For example, fair pay and equitable employment practices could also be discussed in comp and people committees. However, in other situations, it might make sense to bring further focus to those and set up separate forums, like ESG committees, which I know some companies have as well, that allows all of the topics to come together. Maybe if it's for a company that's earlier in the journey, just to provide that right level of focus and attention. Those are all examples of places that we're still testing, continuing to learn from what works across the portfolio—no really one right answer, except that just to make sure that that time and attention needs to be given to those topics with the right participation.
Megan Baca: Now turning to DE&I, how would you describe Bain Capital’s focus on efforts to improve DE&I?
Kim McCaslin: Yes, this is a great, great topic. We really aspire to have our team, including our extended teams and all of our partnerships with outside firms, reflect the diversity of our broadest talent sources—so that first of all. And also to ensure that our culture is highly inclusive, which is so important. You really can't have the first and not have the second, right? To get those voices around the table, but to make sure that those voices are heard, and active and engaged. It is a top priority for the firm. We're putting real talent behind it as well. We actually recently hired Victoria Budson as our first global head of diversity, equity and inclusion. Victoria was, 25 years prior, leading a Harvard University research center studying these issues, so she's heading up our DE&I efforts globally as a partner to our team to help us accelerate all these things, which has been just terrific to have her leadership.
Megan Baca: What are some internal initiatives that Bain Capital has in place to help improve DE&I for your teams and your portfolio companies?
Kim McCaslin: We have launched firmwide and business unit initiatives to improve diversity, equity and inclusion at the firm, including with our investment teams and at our portfolio companies. The topics that we're tackling are things like governance and accountability, recruiting and our pipeline, development of our team, this culture of inclusion—again, really important. Then, also extended out these concepts with our portfolio companies and our engagement with the community as we support social and racial justice as well. Our investment teams are also focused on diversity, equity and inclusion, and conduct diligence across a broad range of factors to identify risks and value creation opportunities, including things like an assessment of human resource policies, practices, staffing and organizational culture. We're continuing to enhance those diligence practices to include an assessment of DE&I in our investment review processes as well.
Internally, there's so many different initiatives along the lines that I've mentioned that we've been really excited about, and that has included, in 2020, our partnership actually committed to provide more than $100 million over the next 10 years to nonprofit organizations focused on social justice, civil rights and racial equality. We've also doubled our matching gift to causes supported by our employees as well to back their interests in the same regard. We've launched an economic development initiative in the city of Boston focused on businesses owned by underrepresented groups and women, as just a few examples. We've been so lucky to be able to work with a variety of organizations as a founding participant of Management Leaders for Tomorrow's Black Equity at Work program, which has been fabulous, and also several other organizations like Seizing Every Opportunity, Out for Undergrad and Girls Who Invest, to really expand the pipeline of diverse talent coming into the firm. So, a number of things that we are active in, and our entire organization is really engaged on this, which is terrific as it's not just a few, it's many.
Megan Baca: Similar to what you were talking about in regard to ESG, it’s not only about doing these things because it’s the right thing to do or implementing these practices because it’s what we should be doing, but there are real advantages to these focuses and implementing these practices. What would you say are the business advantages to having a more diverse team?
Kim McCaslin: It is such a good question. Diversity in all forms, backgrounds, perspectives, experiences, opinions, no doubt leads to stronger investment decisions and a more effective and stimulating workplace. What's so powerful is that there really is no doubt that diverse teams lead to higher-performing companies—just fosters creativity and innovation. As you said, it's just the right thing to do. What was really powerful is that with a diverse team around the table, again, inclusive, where all the voices are heard, you're guaranteed to learn something new, to see something from a different perspective, or to pick up things that we would've missed, just guaranteed. I mean, how exciting is that, to think, you're going into that meeting, and you're not going to just say, "I've heard this before." You're going to say, "Wow, I didn't know that."—back to that growth mindset that we talked about. And so, we just see those advantages everywhere in addition to building really healthy organizations and thriving companies, that this culture that allows for this ongoing innovation and creativity, and better decision making is fostered as well.
Megan Baca: You’ve touched on several initiatives that Bain Capital focuses on—are there any DE&I-related efforts that you are particularly proud of?
Kim McCaslin: I think what's been powerful is taking all these learnings and applying them to our own everyday. It is the moments in the everyday that really bring all of this to life, and having the right culture to be able to talk about what's working and what are some of the things that we need to improve on and do differently. So, we've launched a set of developmental practices focused on retention and advancement, and mentoring for all, sponsorship for all, apprenticeship, employee networks that have really become even more formalized and active, and even things like learning and wellness programs that just bring the full conversation together has been terrific. Again, it really centers in this culture. I mentioned the employee networks—we have a multicultural network, a women's network, our LGBTQ+ network. We've relaunched globally many of these efforts, and it's just always exciting. You get people on the phone connecting and sharing their stories, sharing what's working, sharing other things that we could consider in our initiatives. We're having global conversations around this, and that really is exciting because it takes both the intention to get that group together with the right forum, but it also takes the right culture to allow for the sharing that needs to happen. When you see those conversations really thriving, and the energy that comes out of them, the follow-up that happens, you realize, "Okay, we're doing something here." And there's a lot more to do, but we're also learning a lot on how to best support each other, which has been terrific.
Megan Baca: That really is terrific. Turning back to your portfolio companies, how are you working with them to support and improve their DE&I efforts?
Kim McCaslin: Once we invest in a business, as mentioned earlier, we do seek absolutely to improve the diversity of the portfolio company's board, management team, and within the full company along these same efforts. So, we are actively working with them and learning from them at the same time. We have a set of DE&I diagnostics, tools, expertise to support their efforts—again, depending on where they are and what they could learn from. Several of our companies have terrific and successful efforts, and we're sharing those across the platform. We have a bi-monthly forum with our CHROs and a variety of other CEO forums. We actually just completed a CEO forum in North America focused on this topic, and it happens across our businesses where we just talk about, "What are the things that are working and practices that are out there to really support every aspect of DE&I in our companies?" One key area that we've been focused on, as I mentioned, starts at the top with our boards. We, in every one of our investments, start by looking at the capabilities necessary to best support the company's strategy and have that right expertise around the table, and so that intentional conversation, again, about, "What capabilities do we need to best support the company's journey?" Then finding that talent through diverse candidates, of which there are really incredible profiles out there, and actioning those opportunities across the portfolio. So, have a commitment to not only add board members with diverse perspectives, backgrounds and experience, but also take that to the next step and ensure that the environment is allowing for all the voices around the table, again, in that inclusive practices—so, how do we actually set up our meetings to ensure that that happens? We have another program that we're excited about too, that is helping to actually develop the next generation of board leaders—this is our partnership with Directors Academy. The Directors Academy has a next-gen directors program that provides governance, education and training for future corporate board members who are from diverse backgrounds and who are underrepresented on boards today. We are the exclusive sponsor of the private equity development track and serve on the Directors Academy board itself. As part of that, we're providing content development, business case examples, and faculty for the track. It's a terrific program. What an amazing group of people. We're really excited to be part of it. But that's just one example of some of the efforts that we're pursuing and then bringing into our portfolio companies.
Megan Baca: Before we wrap-up, any key takeaways you’d like to share with our listeners as they think about their own ESG and DE&I efforts?
Kim McCaslin: I would just say really small changes and actions add up, and just to lead with your passions and by example. Back to this point around learning something every day—there's always something to learn every day—having that mindset, but also sharing experiences, jump into the conversation, surrounding yourself with great people who are equally eager to learn. And just guarantee that along the way, each person has something to add and will have added something new to the conversation that others didn't think of, and influence the path for the better in each person's own authentic way, which is how all of this adds up to the big change that we're seeking. It does come through a million little actions for the better, and so everyone can play a part in their day-to-day.
Megan Baca: Well said. Thank you so much, Kim. And thank you for sharing your insights and perspectives on these very important efforts.
Kim McCaslin: Thank you—thank you for having me. It was great to be able to talk together, and thank you to Ropes for hosting this series. It’s a really interesting set of conversations.
Megan Baca: Well, that concludes today’s discussion. As always, thank you to our listeners. For more information about Ropes & Gray's Women's Forum and our women attorneys, please visit www.ropesgray.com/women. You can also subscribe to this series wherever you typically listen to podcasts, including on Apple, Google and Spotify. Thanks again for listening.
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