Behind the Scenes: HR's Role in Taking a Company Public

 

Join me, Cindy Lu, as I dive into a riveting conversation with Adrianne Court Petruska, a seasoned HR leader with over 25 years of experience across public and private sectors. Whether your company is on the brink of an IPO or simply striving for operational excellence, this discussion is packed with actionable insights that can transform your HR operations.

What We Cover:

• Regulatory Compliance: Adrianne discusses the importance of aligning HR practices with regulatory standards to enhance compliance and avoid pitfalls.
• Transparency and Accountability: Learn about strategies to increase transparency in HR operations, a key factor in building trust and accountability within your team.
• Competitive Compensation: Discover effective methods for developing compensation and benefits packages that attract and retain top talent, crucial for any growing business.
• Corporate Culture Alignment: Adrianne emphasizes the importance of a well-aligned corporate culture that supports your company’s strategic goals and enhances overall business performance.

Whether you prefer to watch, listen, or read, we’ve got you covered:

• Watch the vlog  see our discussion in full video format.
• Listen to the audio version if you’re on the go.
• Read the machine-generated transcript below for a quick overview or if you prefer text.

This discussion offers invaluable tips and strategies for HR professionals looking to elevate their operations and prepare for future challenges, ensuring your HR department not only meets but exceeds expectations.

 

Remember, enhancing your HR operations is key to your company’s success, and insights from experts like Adrianne can guide you through making impactful changes.

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Transcript: This transcript was generated by an AI system and may contain errors.

Great, great. Cindy, it's nice to see you. Thank you for inviting me. is kind of a fun topic. But first, I'm Adrian

Kourt, and I fell into HR years ago.

I now say 25 years plus, so I don't add to that anymore. just say 25 years plus in human resources.

And most recently, I'm the CHRO for Tealium, which is a consumer data platform. have, we're in about, our

employers are about 20 countries with customers in about 30, and prior to that, I was with a company called

Alchemy for nearly five years and we brought public in April of 2021.

So I know that'll probably be the most interesting element of our discussion today, but I have worked in both private

equity and public companies with majority of private equity.

But look forward to sharing more and insights into bringing in company, public, preparing for it and after, after math

of it as well.

Cindy Lu

Well, awesome. I know you guys were one of the first companies after the pandemic that ranked about live, right?

Adrianne Court

Yeah, yeah, we had our masks on, was kind of a fun story, not fun story, but it was quite remarkable to be in New

York City at the tail end of the pandemic.

Everything was still relatively shut down. We were one of the first companies. companies to actually go there and

physically not ring the bell, but hit the button.

And so we had our masks on, but it was fun. We were able to take our masks off and take some pictures.

But we were very inclusive because a lot of employees couldn't travel and it had to be very selective. was, Nasdaq is

right down at Times Square.

So we rented at the time it was very, we rented all of the billboards. And so we were able to stream alchemy and all

of our team photos.

So employees could actually see their their photos up. So they could, they were live showing their photos and we

were, you know, streaming their photos.

Cindy Lu

So they felt like they could be part of it was really fun. I love that. Wow. What a creative idea.

Adrianne Court

Yeah.

Cindy Lu

All right. So I know you as like the fast growth CHRO or CPO, right? Like all the companies that you joined have

just grown so rapidly and ensure that has to do with the people.

But I know that there's parts of going through. public that are just hairy, just crazy hairy. And so I thought if you

could walk us through a high level, I think there's five points that you wanted to share.

Let's do quick whitening around through those. And then I'd love to dig into two of them that I think, based on our

discussion, are like the sort of the biggest areas that might be surprise, if you haven't gone public, or maybe the

biggest lift from expense perspective too.

Adrianne Court

Right, that's right.

Cindy Lu

Yeah, so yeah, I did share with you kind of five areas. Let me walk through them.

Adrianne Court

And then as you mentioned, we'll kind of dig into ones that may be most interesting either to me or to you, or we

think, but as we certainly people can reach out, those who are preparing or considering it.

So I actually see as a CHRO today, as many people are probably saying like, oh, we want to be strategic CHROs

strategic people, you're certainly.

But the level of admin, compliance, and regulatory and all things in our lives are elevating and escalating so that's

becoming a much considerable element of our roles.I don't think anybody can deny that. Everything from wage transparency to I mean you could just go on and on and

and on about all the things that are transpiring not only in the US but if you're a global company touching on all the

different countries and things.

Cindy Lu

what I'm going to say and we'll is that important.

Adrianne Court

It gets completely escalated and it's an area that you have to focus on well in advance a year plus.

Then with that is disclosure and transparency. I talk a little bit about that one of my points about culture is as you

become a public company you have to disclose all these things you have to be very transparent.

You're going to see employees are going to see things like executive comp board comp all those kind of things.

So having a being prepared prepared that those things are going to be disclosed and understand what that means to

the organization, and maybe setting a culture in advance for that so people are prepared.

Talent retention is going to be a big thing. always is. Even in Dell markets, we think about how we retain and

engage our top talent.

In particular, an IPO event creates interest in your talent because others are like, well, that's a special thing. Were

you a special person that helped create that?

Or have you been part of that and you understand the heavy list it takes? So you need to think about talent retention

strategies because your talent will be targeted.

Equity compensation is a big element of an IPO or any kind of company going public. And so you're going to have

to your strategy around your equity compensation.

And then also level set.

Cindy Lu

to and we could talk a little bit more about that because just because you go public and all of a sudden it's this

doesn't mean that everybody can sell immediately.

Adrianne Court

then as I kind of mentioned governments and corporate culture right your culture is going is very important and

that's going to become micro micro watched once you're in and you've all seen you know great companies that are

out there publicly but then you've also seen supposedly great companies and then you learn about what their CEOs

or others and things are doing and that impact the stock price the value your employees the you know all that kind of

stuff.

So your culture and the governance around that is super important element so those are kind of the five I think areas

that I think are important as you prepare or consider an IPO.

Cindy Lu

Yeah for for you and what you think other HR leaders where are the two heavy lifts would you say these five topics.

Adrianne Court

compliance and regulatory. Every process you have must be documented. And then it needs to be producible,

meaning if I have a documented process that says this is how someone is incented or earns a bonus, this is how they

are paid, this is how it is approved, we have that process documented, we have all the policies related to that, and

then your internal and external audit is going to make sure you're actually following those things.

And this gets, it is a significant and onerous process of documenting all your policies and processes. Some industries

and groups are already fairly regulated like mortgage, I worked in mortgage that's already, that's fairly regulated, it's

already part of who they are, but for a lot of companies or particularly class growth, high-tech companies, that's not

necessarily first in your nature.

So they acquired a bunch of companies a long way and everybody's got their money. Yeah, everybody's doing things

differently.

And the other thing is, which I tend to be like one, like I just want to get stuff done and get it over the line, it's not

just you.

You have to get a finance, accounting, legal, compliance, information security, all these compliance and regulatory

matters touch every one of those elements, product, I mean, there's just so many.So I will not underestimate the level of tediousness, the level of importance this is. And once you become public,

then all these things are even escalated through like SEC and other regulatory things that ensure that you are meeting

within or above those standards.

And then all encompassing in that is your code of ethics and business conduct. If you don't have one of those purely

articulated, that's fine.

Probably gonna be the first thing that's going to occur. I would expect if you're preparing your legal or compliance

team has already helped do that, but that's a very important element.

There has to be a clearly articulated way that employees or others can submit concerns or complaints and both

within your company as well as anonymously how that can be done.

And then in a test station process to your policies, annual, there's a lot. So for all of us who want to see at the table

and we want to be strategic, that is a strategic element.

It's just a very tedious and administrative strategic element of your role.

Cindy Lu

So I'm not gonna estimate that in any shape or form. So can you walk us through an example of something that you

had to put in place that maybe wasn't very full.

and then like how did the auditors check to see if you were doing it right.

Adrianne Court

So let's say hiring somebody, okay, so let's say a manager likes somebody and it generally fit in the compensation

and we had a proof rec and we would just approve it.

Maybe I'd approve it. Maybe the VP would approve it or whatever, okay, know, like, okay, we hired someone. Now

you have to, one, it's a financial impact to the organization.

So anything that has a financial impact or regulatory concern, it has to be documented, have a policy, documented

policy and a documented process that is auditable.

So, for example, let's say it's a hiring practice, we're going to say how that hiring practice happens, how the

compensation is determined, who approves it and how that happens and you're going to have a process for that.

then it is going to be audited. So, and it will be, for example, your external, internal audits will do it first to make

sure you're following and then external audit, but they could randomly pick 25 people that were hired in the last six

months, any random six, any random 25, and they're going to ask you to pull all the documentation or reporting that

supports that you follow that exact process and have all those approvals in line.

And let's say you have 24 of them, and one of them did not call that process. You now show that you have a

deficiency and you're going to have to correct that efficiency.

And the next time they're going to pull it, they're going to look, have you met so you don't have that deficiency?

If you've cleared it, it's fine. If it's another deficiency, now it starts to become an area where it has to go to your

your board, I mean, and it's elevated to a very significant level. So that's to the extent that I'm trying to share that this

is not like, oh, simple.

In fact, I found like, let's say the CEO says, hey, the board approved this. Well, I need an email for the board that

said they approved that, where we can't make the compensation change or we can't make that adjustment.

Cindy Lu

Everything's got to be documented.

Adrianne Court

Everything's got to be Interesting.

Cindy Lu

So the guide, like, helped guide you through? This is a level of detail that you need to go into.

Like, did you have to hire external consultants? Did you have to hire somebody internally that had been through this

before?

Adrianne Court

How did you know what to do? Well, there's, so first thing is for us and working, so it's a cross-functional team.

usually there will be an external consultant of some sort. External auditor. or some sort of that generally give you

these are the things that are most critical in terms of all our, and by the way, I'm just touching on HR.There's like information secure. mean, each group, every group has these things. So I'm just talking on the HR

element of it.

And then when you start out, it's like, okay, we want to hiring practices, firing practices, whatever, all the things,

once you have that list of things, you then go and identify, do we have a policy?

Do we have a process? What is our practice? And you must then start documenting these or defining where you can

find these.

So people, well, I have a handbook. A handbook is generally not, that might be the beginning of the process,

beginning like, oh, we have a whatever, whatever, we have a leave administration, not policy, what you, what you're

eligible on, you know, PTO, et cetera.

But then you're going to have to have what is the process. us. How does someone get approved for a leave?

Where is that documented? And you actually have to outline those processes.

Cindy Lu

So did you find efficiencies? I mean, because you had to go through this process.

Adrianne Court

Yeah, you know, you're preparing in advance. You usually like we prepared almost two years in advance at

alchemy. You're starting to find these deficiencies and correcting them internally first.

Hey, let's look at what your policy is.

Cindy Lu

Are your processes now?

Adrianne Court

Are you following us? Hey, I see a gap or hey, okay, let's start cleaning them up. Let's start documenting.

so you know, you're kind of going through all this and then you're auditing them for accuracy to the point where

now you probably got a pretty good process.

Then to the point of, okay, now they're going to bring in internal auditors or how are we functioning, know, I mean,

external auditors.

So it's kind of a step process. You start start with the fundamentals, what do you have, build upon that, test it, worry

deficiencies, clean it up, or maybe the process you have documented doesn't actually represent the reality.

you have to change your documented process to mirror the reality.

Cindy Lu

So if you have something that says the CEO approves all director and above compensation, does that really happen?

Right.

Right. And so like you guys had about 600 employees when you went public, really lean HR team, like you said

around.

Adrianne Court

Yeah, sure. think I remember maybe 18, 20, but that would have included the whole team. So that would have been

our recruiting team, our comp and benefits team, our HR business partners, our learning and development.

I mean, that would have been the whole, the whole group.

Cindy Lu

Right.

Adrianne Court

Now we were fortunate. I mean, I will say this. Alchemy was a US based company. So that leads to a little, excuse

me, little bit easier from an HR perspective, ensuring that you actually have policies, so you got to keep in mind,

these policies of practice also have to be legally, like I can't make up some quirky thing that doesn't relate to legal

requirements too.

I mean it's that whole cross functional thing. So it does get a little bit more complex when you have operations or

employees in other countries.

Cindy LuYeah, I bet. Well, and even if like your government contractor, right, then you have to be able to all that stuff.

Yeah, yeah, Well, it's for this.

Adrianne Court

Okay. And then we're a data, dealing with data company. So we're like, you wouldn't even like people, like one of

the biggest compliance rules we have is HIPAA.

You're like HIPAA like, but all the companies. He's data and it has to comply with him. I mean, you just keep going

on and on and Yeah, so.

Cindy Lu

So even though I have worked in very entrepreneurial type of environments, I have to imagine that this kind of

discipline though around governance makes it easier for you guys to make decisions, even if you don't go public,

right?

mean, and maybe it's over time.

Adrianne Court

Certainly does. However, there's that fine balance. So, you know, and that's a real big shift. Truthfully, Cindy, is a

lot of times, you know, the companies that are considering IPO are probably somewhere between 15 to 10 years old,

right?

And so you're still not far away from your entrepreneurial spirit and heritage where everybody just kind of did

things and it just happened.

Now, we have to kind of follow these things. you kind of in this high growth, kind of maturing level experience, and

so you have to bring in people.

that balance you because you know I have to say I'm pretty much a go person too so I have to have that balance um

of you know someone like you can't be just do it you have to like do it within the framework of things you've

established lot of details too did you have to increase your team substantially or or get we didn't and I know some do

um I have to say from an internal and an external audit issue yes we did um we didn't really add team members um

for this but I did kind of assign like team members okay your role is going to be really helping to document the

policies so you spend a lot of time on that and then we're all going to help you know fill it in but we didn't add a lot

now I we also took alchemy we kind of did things in a didn't have this we're going to go in a year if we

Basically, for the moment, I joined Alchemy. We knew this was going to be something in the longer term horizon.

So we were a little bit more methodical pairing for it.

Cindy Lu

Go ahead and get set up like your one, Yeah, I remember some of our startups, our boards were like, look, we're

going to go ahead and hire an audit firm that is going to be OK.

mean, that the street will be OK with or?

Adrianne Court

Oh, yeah, I mean, audit is like the first on a board, your audit committee chair. I mean, like, all those things are like,

so important.

Cindy Lu

Yeah. So it sounds like compliance and regulatory is a big one. Yeah. one that you would say is a big, heavy lift.

Adrianne Court

Compensation, executive board comp is very important to people. know, kind of, yeah, yeah, but there are certain

things you need to follow, you know, certain regulations and guidance around comp, you, you'll need a partner with

a comp firm, like a Compensio or a PayGub and a Immersion, there's many great ones in advance of that.

You'll need to select your comparator or peer companies that you compare your compensation to. So there's a little

work around that because you'll talk to your company versus other companies that's very important in terms of

decision making.

And then all elements of base, cash and equity. Equity becomes also a significant discussion, important elements of

compensation, certainly prior to and then after.Stock options are issues, what other incentive programs stock purchase programs, all those things you need to think

about because when people are working for companies that are pre-RPO.

and have gone public, you have to think about ways where hopefully most of the team members can participate. In

many respects, you can't always just continue to give out stock options or RSU's to all team members.

So you have to think of what are ways that people feel that they're participating. So like a stock purchase plan,

which is a nice little benefit people buy, but you get it at a discounted, there's a whole process around that.

I think the other thing too is along with the compensation is once you go IPO, your team is many team members are

on the hit list for others to try to recruit.

So everyone from your, you know, your CHRO, your CFO, you know, multiple people, and even kind of the next

years, having been through that and organizations that are considering that now.

are going to target you to come to their company, particularly ones that, know, have success or known for success.

So you're going to have to think about ways of retention. Again, that most likely cash comp is important, but equity

is important.

The other thing around equity compensation, which a lot of people don't think about, is while the company goes

public and many times it could be four to six months before you would even have an opportunity to sell.

Because, you know, there's that kind of crazy bump and they want it to settle out. They don't want any kind of

insider manipulation.

And then ongoing from there, after typically there's blockouts before and after the end of the quarter, there'll be,

sorry, periods, if there's any kind of events such as, let's say you're considering an acquisition or a big change.

change with customers or let's say you have a compliance issue, all that they put you in blackout periods. So I just

want everyone to be thoughtful that it's not like everyone it goes like, you know, that doesn't happen automatically.

You have to kind of work through it a little bit and stick through it in order to actually see really, really any

significant gain from that transaction.

Cindy Lu

What's all that work look like for the HR team as you're going to, know, because you're coming back.

Adrianne Court

So the comp piece, executive board comp, equity comp, particularly I'd say six months up before and those six

months after it's a big part of your job.

It just is. It's a significant communicating how you're not only like setting these programs, but then communicating

to your team members so they understand.

um your HR team. Yeah, and then you have to work with your legal and finance counting teams on your equity met

here.

We all we all there's tools that um you manage your equity programs in and oh excuse me and yourselves and your

blackout period all that.

So there's a lot.

Cindy Lu

Yeah, absolutely. I imagine that your team is just fielding questions on stuff.

Adrianne Court

What does this mean, right? you would be surprised like you probably communicated it four different ways. Email,

slack, a couple lessons learned you know a video and then people still don't understand it.

So um and then you'll see other employees try to like oh this is how it works. No that's not how it works.

Um but yeah so and then there's lots of tax implications and then for a company we say like it's your responsibility

but you do try to help educate people on tax consequences.

consequences and things. Depending on the type of equity, how long you hold, when you sell. Yeah, there's just a lot

of communication.

I think from a CHR perspective, I said, compliance at the communication piece is really important. If you don't like,

I actually enjoy communications and think a lot about it.

And so really thought a lot about how we're to communicate these things in advance during after. But if you are not

that person, make sure you have somebody on your team who thinks about that.

Cindy LuYeah. What about the board? You mentioned board compensation too. You involved in that piece of it and every

element of it.

Yeah.

Adrianne Court

Same thing. Board comp, you have to do competitive analysis. And then a lot of times what will happen is you

might have board members who joined

As part of investment, it might have been a friend is, I mean, there's lots of ways you have to start to level that out,

determine by committee.

So typically there'll be a, what I'm saying, a general board retainer, whatever 30,000 or whatever is, and then for

each committee, they'll be a different level of retainer.

The chair will get something. So like, let's say the audit committee chair, that'll usually be the one that has the

biggest little retainer.

And then those are on the committee compensation committee. The chair will get a certain and then et cetera, et

cetera, And then our peer companies, which is just about 15 or.

are so competitive companies that you compare their comp to your comp.

Cindy Lu

How about companies? Yeah, interesting. wonder if you're in a space where you're carving out kind of a new

category, how you would do that.

Adrianne Court

Yeah, you'll work comp. You'll have to find some sort of comparators.

Cindy Lu

It's not going to be. Everybody thinks they're special, by the way.

Adrianne Court

Every company thinks they're special. Every executive, every entrepreneur particularly thinks that they're special. I

agree. But there's all these rules and regulations that say you're not.

Cindy Lu

It's actually that special and you need to compare to others. If your comp is significantly out of bounds one way or

the other, you'll just have to explain that in your filings.

So we have a few more minutes and there's something I forgot to ask you about. That is ESG. So much of the S

evolves into the human capital and HR area.

How much of the ESG if she, are you expected to sort of cover on day one? Or is it just like all this compliance stuff

is overwhelming?

Adrianne Court

I think that becomes a natural outcome of a lot of work that you're doing.

Cindy Lu

Okay.

Adrianne Court

I just truth be told, I did not think of that as a separate component or an element. But it truly is an outcome of all the

work that has been done.

Cindy Lu

Makes sense, especially on the governance side and on the side. If you're focused on the culture piece.

Adrianne Court

Yeah, yeah, yeah, but you do have to prepare like. What are all the things that relate to that? And you know, like you

will be asked to certainly help write and contribute to that.

But I think all these other things kind of just feed into it.Cindy Lu

Okay, so closing comments, you're known as sort of like the culture queen. when it comes to HR creating amazing

cultures.

so, number five on your list was governance in corporate culture. Yeah, let me a little bit about you nude coming in

day one, right?

So did that help knowing that you guys were going public to help create that culture? Or did the culture you work,

you did help with the culture piece?

Adrianne Court

Yeah, I think the culture work already it wasn't like done because we're going public. It was what we did to make a

very healthy growing company.

And then when you have a culture like that, then you don't have huge ethics concerns and behavior because there's

certainly always other, but you don't have those huge elements happening.

As I mentioned, transparency, accountability, kind of all those things within your culture are so important to all

these other elements.

We're doing it. Um, so if you're a company that has not been transparent, now you want to probably be a little bit

more transparent of things, but then as you become public, you have to manage when that transparency happens.

So, for example, you might be a very transparent company about how you're doing with deals during the quarter,

sharing, celebrating with your team members, and all that kind of stuff.

Well, when you become a public company, you have to be very careful. Like, is that public information? Is that only

you have information?

Cindy Lu

How is that going to impact the quarter?

Adrianne Court

So, um, having that grounding that you know that you're going to be transparent, but then also let them know we're

going to be accountable all these things.

So, you might not find out at everything until we're publicly allowed to share with everybody. So, there's lots of

things, but building that trust and confidence and having culture where you trust people, um, and all that too.

Cindy Lu

Yeah, that's awesome. Well, Adrian, thank you so much. We've got compliance and regulatory requirements,

disclosure, transparency, talent retention, equity, compensation, governance, and corporate culture, and so if there's

anything we didn't go deep enough into and you're interested, we're going to drop Adrian's LinkedIn into the show

notes, and she said feel free to reach out.

Adrianne Court

Yeah, great.

Cindy Lu