My contribution to a board
A board would get from me the instincts of a CFO who has spent his career on the line between what a software company has sold and what it has earned. I can read a revenue policy, a contract schedule or a stock compensation note and tell a committee which judgement in it matters most. I have built controls from nothing for a company preparing to list and tightened them at one already listed, so I know which controls fail quietly and which fail loudly.
The Nasdaq and New York Stock Exchange listing standards expect audit committee members to be independent and able to read and understand financial statements, and SEC rules ask a company to disclose whether at least one member is an audit committee financial expert. I believe I would meet that definition, though each board makes its own determination. I would join the committee as a member and offer to chair it after a year, once I knew the company's auditors, its revenue model and its control history. Asking for the chair before then would put my convenience ahead of the committee's.
I would also bring two kinds of judgement that software boards often lack. The first concerns the cost of equity. I have run a share budget through a share price collapse and can help a Compensation Committee treat dilution as a cost it approves rather than a result it reads. The second concerns the economics of AI features, where usage-based costs are changing gross margins faster than many boards have noticed.
Finally, I bring a habit of recorded disagreement. At Veyrholt I argued to delay a listing against the chief executive and our largest investor. At Brindlewood I argued against an acquisition our chief executive favoured and against keeping a popular feature free. Each time the disagreement went into a paper with the evidence and the cost of my own recommendation, and the working relationship survived because of it. An outside director has less information than a CFO, so that discipline matters more, not less, in the director's chair.
My first year on a board
I would treat the first year as an apprenticeship with a clear syllabus. Before my first meeting I would read the last three annual reports and proxy statements, two years of committee minutes, the auditors' communications to the committee, including their critical audit matters, and the company's revenue and stock compensation policies. In the first quarter I would ask for half a day each with the CFO, the chief accounting officer, the head of internal audit and the engagement partner, and I would sit in on a sales deal review, because that is where revenue judgements begin.
By mid-year I would want to understand three things well enough to explain them to the next new director: how the company's largest contracts turn into revenue, what its equity grants cost in shares as well as dollars, and which of its controls depend on a single person. I would ask few questions in meetings at first and more in writing, so that management could answer them properly. At the year's end I would ask the committee chair for a frank view of my contribution, and only then discuss whether I should take the chair.
Conflicts and their management
Brindlewood comes first, and that decides which seats I could accept. I would not join any company that sells software or services to veterinary hospitals, any animal-health company or pet insurer, the payment processors and sponsor banks we work with, the AI providers we buy from, or any veterinary group that is or could become our customer. Several of those are growing quickly and would interest me, which is exactly why I rule them out in advance.
I would disclose my Brindlewood holdings and my not-for-profit board role before any appointment, and seek approval from Brindlewood's board under its outside-directorship policy. Trading windows are a practical conflict too. As an insider at two listed companies, I would prefer one whose quarter-ends fall a month away from ours, and I would follow both trading policies without exception.
Should a commercial relationship arise after I joined, I would tell both chairs the same day, leave the room for any discussion of it and resign if it became lasting. Time is the last conflict. Twenty-five days a year must cover reading as well as meetings, and I would fix the calendar a year ahead.
My independence statement
I am a full-time executive officer of Brindlewood and hold its shares and unvested awards. A seat I accepted would be at a company that does not buy from, sell to, compete with or invest alongside Brindlewood, and where neither I nor my family has a financial or personal tie to its management. I would set out every relationship I could think of, in writing, before an appointment is considered. Whether I count as independent under that company's listing standards and its own guidelines is for its board to decide on what I disclose, not for me to assert.
Judgement in practice
01A five-year agreement treated as two
In 2023 our sales team brought me a five-year agreement with Bramblecote Veterinary Partners for 210 hospitals, with a headline value of $38 million. The customer could terminate for convenience after 24 months with 90 days' notice and a modest fee, prices started at 70 per cent of list, and the first year carried $2.2 million of credits. Sales wanted to announce the full value and pay commission on it. I concluded, and our auditors agreed, that for revenue purposes the enforceable term was about two years, worth $12.9 million before credits. We included only that portion in remaining performance obligations, paid commission on annual value and changed the sales plan for every later agreement. Bramblecote stayed past its termination point in 2025. On a board I would ask of every large contract how long the customer is truly bound and what the sales team was paid on.
02Refusing an adjusted margin that excluded AI costs
When we moved the inference costs of our AI notes assistant into cost of revenue in the third quarter of 2024, gross margin fell by more than three points over the following quarters. Our investor relations team proposed a new non-GAAP gross margin excluding AI costs, presented as an investment in adoption. I declined. The costs recurred every time a customer used the product, and excluding them would have shown investors a margin our business did not earn. Instead we disclosed the cost per note each quarter and the steps we were taking to reduce it. Analysts questioned the decline for three quarters and then credited the recovery. As a director I would scrutinise any adjustment that removes a cost incurred each time a customer uses what the company sells, and ask management to show that cost falling instead.
03Narrowing what engineering cost we capitalise
By 2022 Brindlewood was capitalising $41 million a year of engineering cost as internal-use software, 28 per cent of eligible engineering spending, up from 19 per cent two years earlier. The accounting rules permit capitalisation of development work that adds new functionality once a project reaches the application-development stage, but our teams had begun labelling maintenance and minor enhancements as new features. I tightened the criteria, required engineering leaders to certify each project's stage and asked internal audit to test a sample each quarter. Capitalised cost fell to $27 million in 2023, reducing adjusted EBITDA by $14 million with no change in cash. The Audit Committee chair asked for the capitalisation rate to be reported to the committee every year. I would ask any software company for that rate over five years, beside the amortisation it produces.
Committee contribution
Chair and member readiness| Capacity | Committees |
|---|
| Ready to chair | Audit Committee, once I have served twelve months on it |
|---|
| Ready to join | Audit Committee · Compensation Committee |
|---|
Board and committee exposure
Presented to the Board or a committee
Brindlewood Systems, Inc.
Board of directors: quarterly results, the annual plan, capital allocation, the buyback authorisation and the convertible notes
March 2021–present
Presents management's financial recommendations at every board meeting; an executive officer, not a director, with no vote.
Presented to the Board or a committee
Brindlewood Systems, Inc.
Audit Committee: results, revenue judgements, internal control, capitalised software and non-GAAP measures
March 2021–present
Attends every meeting and presents results, accounting judgements and control reports; the committee meets the auditors and the head of internal audit without me.
Reported to a committee
Brindlewood Systems, Inc.
Compensation Committee: the annual share budget, dilution and stock compensation expense
October 2022–present
Reports gross burn, net dilution and stock compensation per employee each quarter; the committee decides awards, and I neither vote nor decide them.
Presented to the Board or a committee
Veyrholt Security, Inc.
Audit Committee: remediation before the listing, quarterly reporting and internal control
2017–2021
Presented the material-weakness remediation before the listing and the quarterly accounting papers afterwards, first as controller and then as chief accounting officer.
Served as a director
Falls Hollow Animal Rescue
Board of a not-for-profit animal shelter; treasurer and chair of its finance committee
January 2020–present
Unpaid board member overseeing an annual budget of about $3.4 million, the annual audit and the investment policy for a small endowment.
Capacity and preferences
- Time available
- 25 days per year
- Current directorships
- 1
- Sectors
- Vertical software for professional markets outside animal health · Cybersecurity and identity software · Technology-enabled business services moving to subscription revenue · Healthcare information technology for human medicine
- Company type
- US-listed software or technology-enabled services company with roughly $200 million to $1.5 billion of revenue, no commercial relationship with Brindlewood, and quarter-ends that do not coincide with ours
- Company stage
- Within five years of listing, or in the move from growth funded by investors to growth funded by its own cash
The seat I am pursuing
I am pursuing one independent directorship at a US-listed company with roughly $200 million to $1.5 billion of revenue: a vertical software business in another professional market, a cybersecurity or identity company, or a technology-enabled services business moving towards subscription revenue. The problems I know best travel well across those businesses: multi-year contracts with customers who can leave, equity compensation that has to be governed in shares, and new usage-based costs entering gross margin.
I want to serve on the Audit Committee and, after a year, chair it if the board asks. I could also contribute to a Compensation Committee on share budgets and dilution, while deferring to directors with deeper experience of executive pay design. I am not seeking a seat at a company still preparing to list unless its board already has an experienced audit chair, because I would rather learn the role beside someone who has done it. I will hold only one such seat while I remain an executive.
Governance learning and readiness
IICA Independent Directors’ Databank: Not yet registered
The IICA Independent Directors' Databank is an Indian requirement for people seeking independent directorships of Indian companies. It does not apply to US-listed companies, so I have not registered. If I were ever considered for the board of an Indian company, I would register and complete whatever the rules then required.
- Every Brindlewood Audit Committee meeting since March 2021 attended as the presenting CFO, and every Compensation Committee meeting since October 2022
- A two-day audit-committee programme for prospective directors, run by a university governance centre and completed in 2024
- Annual sessions with Brindlewood's auditors on revenue, stock compensation and changes to US accounting standards
- Six years as treasurer and finance committee chair of a not-for-profit board, including two changes of auditor and a rewrite of its endowment policy