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Pandemic Lessons and Tips for Boardroom Success in the New Normal
June 24, 2021
Recently, The Directors College Alumni were joined by Coro Strandberg, President, Strandberg Consulting, Brian Gallant, CEO, Canadian Centre for Corporate Purpose, Lloyd Komori, C.Dir., Professional Board Director and Cyber Risk Authority, Christopher Chen, Managing Director, Compensation Governance Partners, Michelle Richard, Senior Partner, Boyden Global Executive Search for a discussion moderated by Michael Hartmann, Principal of The Directors College for insights into their areas of expertise for today’s board agenda and predictions on post-pandemic governance trends.
Some key insights and takeaways included:
Coro Strandberg on Environmental Social Governance (ESG)
There has been an explosion of investor and shareholder interest and pressure around ESG and the G7 have committed to making climate reporting mandatory. There have been more shifts around ESG in the last year than in the last 30 years, including a greater awareness of stakeholder relationships and adopting social purpose.
Boards should plan to:
Educate themselves on the boards role in the oversight of ESG
Recruit directors with ESG competency
Assess and address climate exposure
Ensure an ESG strategy that includes tangible targets and metrics
Lay the foundation for the board to model social justice and inclusion within the organization
Include Indigenous relations training for all Canadian boards
Set the tone at the top for ESG imperatives and priorities
Brian Gallant on Corporate Purpose
The biggest surprise since 2020 is the anger and frustration of employees. 42% of employees in Canada are considering changing their jobs this year, because they believe that their employers prioritize revenue and profit over stakeholder care. Employees will lead the charge to force organizations to focus on purpose and stakeholder care and are looking for employers who hold the same priorities in values, including work/life balance and diversity, equity and inclusion.
Boards should plan to:
Make human capital a focus in the boardroom
Become purpose driven
Mitigate the risk of the government intervention potential of not supporting a purpose driven agenda
Lloyd Komori on Innovation and Cyber Risk
Boards no longer have culpable deniability around cyber risks given the increasing broad based and weaponized attacks on major sectors. The hybridization of how and where people work will continue to create risk cases. Ransomware and data theft have become industrialized.
Boards should plan to:
Deeply understand the supply chain interconnections
Cyber strategy, hygiene and response need to be updated regularly
Recruit directors with core competencies in innovation and cybersecurity
Christopher Chen on Executive Compensation
Organizations that were negatively impacted by the pandemic scrambled to update executive compensation and incentive programs. The acceptance of virtual board meetings was swift and successful for most organizations. ESG-based incentives are still focused in short-term, but not long-term compensation.
Boards should plan to:
Factor ESG into short and long-term executive incentive metrics
Define and communicate the standards and metrics expected
Align metrics to overall organizational ESG goals
Michelle Richard on Director Recruitment
Organizations adapted quickly to recruiting and onboarding virtually, despite the challenges and additional time required to feel comfortable with the right candidate. A hybrid recruiting and meeting model will likely continue. Balancing the seasoned business-based board members with directors who have deep subject matter expertise is what boards are seeking. Diversity has become the primary imperative in director recruitment and boards are looking for education around unconscious bias and other barriers to diversity.
Boards should plan to:
Challenge turnover and succession policies
Clarify functional expertise requirements
Continue being educated: educational designations are becoming more valued in the recruitment process
Michael Hartmann on Boardroom Best Practices
Boards were required to improvise meeting practices as things became suddenly virtual. Pre-pandemic many boards had already accepted meetings with virtual attendees. In survey results, most directors are hoping for a return to in-person meetings. Meeting effectiveness has suffered in the virtual environment, despite being more frequent and better attended.
Boards should plan to:
Design meetings with intention
Emphasize pre-work beyond reading
Replicate the in-person experience as much as possible, like a dinner break
Build in candor breaks
Energize the meeting by varying the format
Train on the use of virtual tools
Our thanks to the Alumni and Faculty in attendance for adding some interesting insights from their own experiences in the break out rooms, and to additional room moderators David Kunsch and Bob Willard.
Click here to watch highlights from the event.