The first half of 2020 has been marked by massive upheaval and disruption. The COVID-19 pandemic and America’s reckoning on racial justice and equity have amplified demands for companies to do more to solve deep systemic problems. In the face of remarkable financial, social, and political uncertainty, business is tasked with creating a “new normal” for the economy in real-time through its decisions and actions.
Many of the vulnerabilities that the pandemic and protests have exposed are familiar. Alarms have sounded for years about the incredible financial precarity of millions of frontline and low wage workers, the importance of diversity, equity, and inclusion to build the best teams, the fragility of global supply chains, and the imperative for companies to better strengthen and serve stakeholders. The new normal for business is being defined by the urgency to change rather than by previously undiscovered challenges.
The urgency for business to innovate and evolve to meet this moment is the inspiration for Aspen Business & Society Program’s new series, The Next Move. In June, The Next Move focused on the future of corporate boards. We engaged directors, corporate advisors and governance experts in private off-the-record dialogue and a public webinar on a simple question, “What moves should corporate boards make now to prepare themselves for the new normal?” The full scope of responses is impossible to capture in a blog post but we’ve noted below some of the insights that stood out to us on how boards can create a better normal for business and society.
Become better at innovation.
- Boards need to reconcile the urgent need for innovation in this remarkable moment of upheaval with the traditional boardroom responsibility for risk management and oversight.
- Board diversity, particularly across age, gender, and racial dimensions will be a defining feature of great, innovative boards in the new normal.
- Create better conditions for creativity and agility by encouraging different ideas and viewpoints among directors and with management. This includes better time utilization between board meetings, dedicating company funds to experimentation, and allowing for failure in pursuit of bold new opportunities.
Take bigger steps on stakeholder capitalism.
- In order to truly understand the pressing issues facing company stakeholders, boards cannot rely solely on the same old data, inputs, or expertise of the past, but instead must actively seek new perspectives.
- Prioritize, engage, and listen to employees for key operational and strategic insights into the on-the-ground issues that are impacting the company.
- Get more comfortable with issues, not just stakeholders. One good practice that surfaced in our recent seminar was dedicating board time to learning about critical issues directly from the people affected by them.
Prepare to be held to a higher standard of accountability.
- Boards need to shift their behavior, understanding that board reputation, not just company reputation, could move into the spotlight.
- Boards should look for new ways to hold themselves accountable and to embrace stakeholders’ efforts to engage with boards.
The first six months of 2020 have flooded boardrooms with calls for change and placed a premium on courage, empathy, engagement, diversity, and creativity. Board cultures that already cultivate these traits have a leg up, but boards that are committed and ready to act can also catch up. COVID-19 and America’s reckoning on race are pivotal moments for building a more resilient, inclusive, and sustainable economy and boards are a linchpin for making the change happen.
Of course, the widespread anti-racism protests throughout June 2020 also reminded us that a big change in business and society doesn’t always come from the top-down. It can also originate with social movements and people on the frontlines. That’s why The Next Move will be exploring the future of worker voice in our July webinar with Jim Keane, CEO of Steelcase; Dr. Carmen Rojas, President and CEO of Marguerite Casey Foundation; and Ellen McGirt, Senior Editor, Fortune. Register here to join us.
Aspen BSP’s new Modern Principles for Sensible and Effective Executive Pay are coming in early September. Stay tuned for more information!