city national bank, providing loans and lines of credit to help california businesses grow. this week, we get the score on fico. with the company's ceo. advice on how you can get yourself on to a board of directors. from deloitte's theresa briggs, and inside genetic testing labs with eric evans, chief science officer at counsel. our reporters, fast company mark sullivan and lara mandara, managing editor of "u.s.a. today," this week on "press: here." good morning, i'm skod

scott mcgrew, this week i learned two things, one, fico, the company famous for the fico score, does not decide your credit rating. who knew? and also fico is headquartered in silicon valley, about two blocks from this studio. again, who knew? will lansing is ceo of fico, i assume he walked over here from his office, he's past ceo of fingerhut, info space, joined by mark sullivan and laura mondaro of "u.s.a. today." let's start with this idea that fico doesn't -- my fico score is so important. but somehow you're not the credit rating? >> the way it works is we're an analytics company and we produce the algorithm and the score. but we don't have any data. so the data is held by a credit bureau, by someone else. and they use our algorithm to produce the score, which they then share with banks, that's

how the credit determination is made. >> i have a macy's bill, i don't pay the macy's bill. it's ex-peerian or others who know i depart pay the bill and they tell you? >> exactly. we're, a bank is trying to figure out whether you're likely to repay a loan if they give you a loan. so the best predictor for that turns out that if you have to pick a single data set, the best you could look at is whether you're good at paying things in the past. >> sure. >> so a data set that provides that information is what we call tradeline data. whether you paid your credit card bill on time. that turns out to be highly predictive of your propensity to pay debt and the fico score predicts your propensity to pay off debt. it's on top of this line data. >> why dot credit bureaus tell you? in a sense the credit bureaus know -- >> they don't tell us, we take

their data. we figure out a score for how likely it is that a consumer will repay debt in the future. and then they take their data and our score that they've computed on top of their data and they share that with the bank and then the bank uses it to make a credit determination for you in the future. >> this calculation, i imagine it's gotten more intense and more complicated over the years. i mean when you look up a fico score, it's like what's your income, what's your payment history. what your debt or your credit ceiling. are there more pieces of it now? is it a more complicated algorithm? >> there are a lot of pieces. the most important thing in predicting consumer payment behavior is your past payment behavior. if you've been pretty good in the past, you're more likely to be good in the future. it's actually not really income-driven. it turns out that there's wealthy people who are bad credits and there's poor people who are very good credits, it has everything to do with responsibility and payment behavior and not a lot to do with your wealth.

>> so that sort of seems to have been the what you've done for years. decades, right? the whole field, we hear a lot about this over the past couple of months seems to be anticipating what you're going to do. on your smartphone, what you're going to ask google and then after that, what google is going to tell you is predictive and artificial intelligence plays a big part of that. are you, do you have a lot of a.i. engineers trying to figure out what you're, what borrower is going to do in a year? >> our greatest skill is predicting consumer behavior. we are all about understanding what a consumer is likely to do in the future. historically, the people who are most interested in that were big-six decisions like money decisions, should we give you a mortgage, a credit card? increasingly, we made up lower costs to figure out how a consumer is going to behave. now it's interesting for marketing. it's interesting, what should we offer? how likely is a consumer to click on this link? for upsell, for cross-sell. >> you're not using my fico

score, whether i'll click on that link. you're saying you're good at gathering data. >> good point we have our scores business, where we predict consumer pre-pennsylvaniaty to repay demt and then our analytic software business, all about predicting all different kinds of things about consumer behavior. we look at past behavior and predict future behavior. we're with the analytics. >> you're good at that. >> we're good at that, that's our main thing. >> is it a lot more crowded market. it used to be most of this information was from payments, but now google or facebook or anybody who has the consumer basing websites have so much information and that's how they're predicting everything. where do you stack in. >> we don't have any of our own data, we're just the math company that sits on top. what we're really good at is taking whatever the data is, your customer data, third-party data, and figuring out what kind of decision you want to make with that data. we think of ourselves as a decisioning company. and it's all about what decision

you trying to make, what's the best data to predict that, the decision. and where the analytics that help you get from the data to the decision. and then we incorporate the decisioning into the work flows of the company. scores are one way of doing that. that's one small way of doing it. but we're in all kinds of places. we have a big fraud detection business. so when your credit card gets evaluated for is it really you or not, that's typically us behind the scenes. we have a 90% market share in credit card fraud transaction, fraud detection. >> so in your, in your analytics business, can you name a real-life say a fortune 500 company that you work with to help them make some decision with your data science? >> sure, i would say ten of the top ten banks in north america use our predictive analytic software extensively to make those decisions. >> lending decisions, you mean? >> to make lending decisions. and some we have big retailers that use us for making marketing

decisions. >> i see. >> if you are that good at, i mean if past behavior predicts future action, can you get any better at predicting whether or not i'll pay that loan? i mean you've got more powerful computers, you've got a.i., but it sounds like your system works pretty well now. >> great point. our system does work really well now, we're proud of the fico score, which is the industry standa standard. it's all about fairness and transparency and access to credit and all of those great things have happened. yet there's still people on the margin who are underbanked, who aren't being recognized. maybe you don't have your credit card. you pay your rent on time, but you don't have a credit card. we're developing new scores to solve for that. the other thing is you know i said we focus on the tradeline data. this credit card data. but if you mix in other data sets, you're going to get more information. maybe a data set that's not as predictive as the credit card payment data. but still has some kind of caloric value.

>> and a frequent guest on this show is doing something with a firm. where he says i'm taking although he uses your fico data, too, doesn't he? >> yes. >> but kind of what you're talking about this revolutionizing finding other ways of predicting how somebody who maybe doesn't have a great score, but there may be evidence that they would pay back that loan? >> yes, very much so. in the old days you would look for a single data set that had the most predictive data. >> and it worked well. >> and we still use it. today it's much easier to mix and match additional data in. rental data, utility payment data. telephone payment data. >> laura i interrupted you, let's take you with the last question there. >> this is all personal data. how do you incorporate sort of external events which can disrupt everything like the housing crisis? there's a ton of data that allowed for the rise of option a.r.m.s and the explanation was we have all the technology to do that. and then there were many, many other factors which made all of those go under water or --

>> we do, we do revise and improve the score. and we're, we're on you know fico 8, fico score 8 is kind of the industry standard today. we have new fico score xt and 9, so we're constantly improving and there's new data that comes into the picture. >> but there's like, is there like a black swan ability to you know -- you can predict say mark's ability to pay. but if this external event, like the asteroid hits, he may not be able to pay that. how do you factor that in? >> that you got to get another way. >> fair enough, will lansing is the ceo of fico, who knew, is a silicon valley company. will, thanks for joining us. >> thank you. up next, inside one of silicon valley's most promising dna labs when "press: here" continues.

every barracuda appliance, every barracuda piece of software is constantly being update. as new threats occur, we're going to update our customers and allow them to be protected against those new threats. >> to learn more about barracuda networks, visit them at barracuda.com. welcome back to "press: here." there are amazing things happening in genetic research right here in silicon valley. researchers and scientists working nearly around the clock. beaten in their industriousness only by the technicians in the lab. because the lab workers can work all day every day around the clock counsyl's workforce works around the lab.

eric evans is one of the founders of. >> robots lend themselves to this thing, because your requirements, you've got to be exact. you've got to be, you've got to repeat the thing the same way every time, et cetera. so robots in medicine make a heck of a lot of sense to me. >> that's absolutely right. so at counsyl we're focused on providing dna information that can be used to make important health choices. and the advantage of having a robotic process is that you can have very high precision, and high reliability in the process. but it really goes far beyond that and we could get into that discussion. >> i'd like to get into that discussion. you have x numb of robots now, where could robots work that you actually still have people working currently? >> i think it's good to understand sort of how the lab is composed and what it can do. we have 36 people who work in the lab. it's not absent of people.

but what robots help to do is to take a problem that requires a lot of road work and a lot of precision and then free people to supervise, to see what has been identified by say the robot in the software stack as an area needing troubleshooting and the humans can come in and look at those areas. basically it frees scientists to focus on the area where they're problem-solving and troubleshooting abilities can be best deployed. >> so the scientists are developing the tasks and the robots are going and doing them? >> at counsyl we have a number of different groups that are contributing to making this testing possible. one group is focused on really building the products, so we have software engineers, we have mechanical engineers, scientists. they build the products. and then in our laboratory, the clinical laboratory that serves patients and physicians across the country, they have specialized staff that have licenses that are required by the state of california to perform laboratory testing. laboratory directors who are

physicians who are experts in how to interpret the results, they work with the robots to perform the tests. what that permits is the division of labor between the robots performing tasks that require or are only possible with patients. so the ability to monitor every action that's performed to log it, to track it, to see if there's drift in the process. and then that leads the scientists to be able to lock at the data, to analyze the test results and deliver those test results to physicians. >> i have a question about just the genesis. i know several years ago we were excited about the human genome project and all the dna testing and some consumer face iing dna testing, 23 and me and some others. we've seen the regulatory hurdles just be so steep. when you know, look back, was selling direct to consumers the right way? and what makes you confident that you're not going to have some of these same setbacks. >> one thing i want to correct, we don't sell any of our tests

directly to consumers. our customers are physicians who are treating their patients and want to have dna testing information to help them make choices that are going to direct their care. so for example, a woman who may have a positive family history for cancer, could get a test to tell her whether she's a carrier for a gene like brca-1. >> so we're embedded in the traditional medical infrastructure. very different from say 23 and me or other companies that are direct to consumer. our physicians are sort of directly interfacing with us and ordering tests for their patients, we interface with the health plans that health insurers, so we have extensive health insurance coverage and we are doing all of these things to really supplement and expand the capability of physicians to offer these tests. >> were there other more expensive, like more bureaucratic ways that they would have gotten these same tests? >> so what's changed is the

number of things in the technology. ten years ago we didn't have the ability to do next-generation sequencing and these other things that permit you to generate huge amounts of data from dna and now that these new tests are available, what has to change is the ability for physicians to offer these tests in the context of a 15-minute appointment with the patient and for the patient to then be able to understand the test results. so we do a number of things, we provide genetic counseling services to every patient so after a test is done they can contact one of our genetic counselors at no cost and talk about the test result and understand what their choices are. at the end of the day the test is all about making a choice available to a patient. >> are there any medical ethicists involved when it gets time for the counseling discussion? >> so genetic counseling is a relatively well-established area in medicine. so they have their own guidelines about how to practice this area. and it's really just a routine

part of clinical medicine that folks only experience at particular times in their lives. so if you have a particular indication, that means you need testing, if you're planning a pregnancy, if you're already pregnant, then you're going to interact with this area of medicine. >> eric, i want to ask you a question a little off-subject. but you got your p.h.d. at stanford, you founded this genetics company. you got funding. elizabeth holmes, of theranos. i know it's not exactly the same sort of thing, but it's laboratories and funding. got scads more funding than you did. when you looked at that did you think, wait a minute, i've got a ph.d. in genetics from stanford. did you look at that and say how did this go her way and not my way? >> i think that we're very different from theranos. >> you are. i admit from a layman's point of view. but you both have lab company. >> i think what it highlights is the importance of having sound science behind health tech,

biotech, all of these areas. need to be predicated on well-established science. you need transparency. that's something that myself and my team is focused on. how we publish, putting it in venues where there's open access to the data. being very transparent about what things we do and how we do them. i think at the end of the day, that's the right way for medicine to be practiced, the right way for science to be practiced. >> has there been any after-shock from what's happened with theranos? i mean it looked like venture capital had a record year for biotech. but just the stigma perhaps attached to the general feel for start-ups? >> i think that if anything, it's a lesson to everyone needs to pay attention to the details. and that it's been an opportunity to contrast some of the hype with what's really very concrete, sound clinical medicine. and that's been sort of an opportunity. >> eric, i'm going to jump in, i've got a couple of seconds left. you have a website in which you show some of the things you can do. but i don't get that stuff from you.

i get it from my doctor. but is it as simple as talking to my physician about hey i saw something on counsyl.com and i'm interested in getting this test. >> if you talk to your doctor, what they're going to want to understand is do you have a family history? are you at the right time of your life where this is the right test for you? and doctors are going to talk to you about it. >> and then she can go from there and take it from there. >> eric evans with counsyl, chief science officer, thank you. good news in the battle to get women on corporate boards when "press: here" continues.

19.9%. maybe the number went up because theresa briggs was apointed to the board of directors at deloitte. she's made a point of helping other women find board seats in companies worldwide. thanks for being with us. though your research, i looked at that, too, says women on boards in tech is more like 18%. so even lower. >> right. a little bit lower. >> what do you do to help people in general, and women specifically, get on boards?

how, if i say to myself, you know i'd like to be on a board of directors, how do i go about doing that? >> you know so the first thing i would tell you is, you need to clearly define why you want to be on a board. what are the skill sets? what are the experiences you have that are going to make you valuable to a board. the second thing i'm going to tell you is, network like crazy. so some people think that board placements are similar to executive placements where executive recruiters play a big role. but in this field. only about 25% of board placements come through executive recruiters. and 75% through the networks, of ceos and board members themselves. so networking becomes particularly important if you're trying to line yourself up for a board opportunity. >> i'm curious, i talked to one of the founders of the board list, which is basically like a linkedin for just this purpose and interesting feature was that, men and women would endorse. so put forward somebody.

and that whole interface was zised to service more women. can tech sort of solve the problem? >> i think it's a really interesting model. what i'm seeing be more effective today is more person-to-person relationships. i had an experience in the last year where i introduced women if my network to a handful of ceos in the valley. and three successful board placements came out of that. i don't think that those ceos would have ever met those amazing women if they hadn't been networked together. >> do you start small? i assume. i mean charity board. is that even comparable? i mean is a charity board in a fortune 500 board, are those doing the same things that i might want to start on a charity board and work my way up? >> it's always a great idea to get board experience, you learn how to be in governance mode versus management mode. from a skill set development it's good. it doesn't make a huge difference when you interview

for board seats, what matters more is your experience from your corporate career. but some people do start with private companies or smaller public companies. and then work their way on to a larger public company board. >> do you, i'm curious as to how you really accelerate. it seems like there's a lot of countries that are around one-fifth of the boards that are women. and it may have been the catalyst, the uk had a big jump between like from 13% to 23%. and if you had more of that kind of growth then you could get to 50% sooner. i mean what's, are we going to grow by 1 percentage point a year? >> supercharge it in. >> yes. >> well some of the european countries you have mandates. you can spike your percentage up quickly. >> do you support a mandate? >> i don't support a mandate what i support is more kind of voluntarieeary ceo commitment t

diversify boards. i'm starting to see a real shift where ceos are talking more and more about wanting to have diversity of thought in the board room that can come of a lot of different elements of diversity, one of which can be women. >> i think we're at point where there's no longer part of the discussion that women have valuable on boards. i suppose the networking will begin to have a tipping point, more women on boards will bring more women on boards. et cetera. >> you mentioned 20% of board members are women and only 5% of ceos are women in the fortune 1,000. so if most board placements come from the networks of people who were already there, women have to network into that network. you know, the large majority of whom are men. so what i'm trying to do is run programs that accelerate networking. so i bring together corporate executives who are looking for their first board and board members who are looking for board members, and help them kind of force them to do speed-dating and networking.

and you're right about women who are on boards, are feeling much more secure in their role as a board member and they're starting to pull other really qualified women on to their boards. and i think between the two of those things, increased networking and more women on boards, results in more women on boards. >> i think that's interesting. about the networking part of this. and is it just that not enough women are in the mix? or do women and men just kind of network in a different way? >> i think it's both. if you talk to a ceo and you say what are you looking for if you're going to add a woman to their board? they'll say i want a sitting female ceo. and you say okay, there aren't very many of those. what's your second choice? and they'll say i already like someone who sits on a board. okay, if you were willing to take someone who wasn't on a board yet what would that look like? and you'll hear, i would like someone with operating experience, so they're becoming more and more women who are running divisions or business units. and so the fsupply of women is

becoming greater. and the access and connection with those women isn't really there yet. >> the friends of mine that have been asked on to boards, were asked because the person asking them had business experience with them. they had seen them in the trenches and could see their judgment and things like that. >> exactly so one of the things women can do is to reach out to into their network of maybe someone in senior leadership in their own organization, their own ceo, one on their company's boards. a mentor, sponsor and ask them to open up their network. >> tresseresa, i see you, say y want to be on a board do i reach out in my own company, my own leadership and say is there some place where i can find a different board? >> i would say a couple of things. one, put together a board bio, like a resumé but instead a listing of your job experiences, it's a, articulation of your values. >> and now my clock is killing

me. >> and two is tell everyone you know who is in a position of management. teresa, right back.

that's our show for this week. my thanks to mire guests and thank you for making us part of your sunday morning. >> announcer: "press: here" is sponsored in part by barracuda networks, cloud-connected security and storage solutions that simplify i.t. city national bank, providing loans and lines of credit to help northern california businesses grow. damian trujillo: hello, and welcome to "comunidad

del valle." i'm damian trujillo, and merry christmas. we hope you're enjoying your christmas morning here on "comunidad del valle." we have a very spectacular show on your "comunidad del valle." male announcer: nbc bay area presents "comunidad del valle" with damian trujillo. damian: we begin today with dr. hilaria bauer. she's the superintendent of the alum rock school district in san jose. she's joined us here to talk about some very specific topics and important issues on "comunidad del valle." welcome to the show, merry christmas. hilaria bauer: merry christmas to you, damian. damian: it's so great for you to be here. so, you've been on holiday vacation over at alum rock for about a week now. but you haven't sat at home and done nothing, like a lot of us do on vacation. you're doing something. tell us what you've been doing as the superintendent of alum rock here over the holidays. hilaria: well, my primary goal, whatever it is,