This terse message came in the wee hours of the morning from a seasoned strategist and business advisor:
“This mess reinforces the need for incredibly engaged governance.”
Amen.
Chaos, volatility, and challenges to both business and our democracy are mounting. What does incredible engagement look like? Companies need highly experienced directors to navigate these waters—with clear protocols for frank exchange, understanding of the workforce and capabilities that may be under stress, and networks that reach well beyond the firm and even into competitors with aligned interests.
Partnerships, like law firms, may have expansive networks, but decisions are made by partners financially wired into the enterprise. That is increasingly true of corporate directors as well. Whether this is an advantage at this moment is a matter of debate.
But regardless of firm structure, the challenges for governance are only mounting. The pandemic—during which corporate board meetings increased in number and length—is beginning to look like a cake walk.
So-called ESG has always been about the “G”.
In the spirit of “not wasting a crisis,” we see some governance norms come under the microscope—like the habit of providing short-term “guidance” to the market, the gateway drug of short-termism. After all, the stock market is dominated by investors selling to one another, a trading platform, not used as much today for capital-raising.
Death to quarterly earnings guidance!
What else is possible now?
Here’s the playbook for Boards that we landed in 2023 as notes from the “pushback” began to reverberate. How do directors prepare for the future? The agenda lays out seven key considerations for boards, along with aspirational, even provocative questions that challenge how directors spend their time, and where to engage to lean into the long-term health of the enterprise. We worked closely with BCG on the framework and question design. We titled it “Planning for a New Reality: Agenda for the Prepared Board.”
Planning for a New Reality?
Little did we know.
We need the problem-solving capabilities and connections of business to address worthy and enduring problems that rebound to the health of our nation, and the resources and relationships on which we depend.
It’s good to remember that We-the-People grant corporations the license to operate, and that the fiduciary duty of the Board is to the long-term health of the enterprise. Long-term shareholders will benefit.
The ideas laid out by the Agenda may seem radical—but ALL are rooted in common sense—and make sense for the commons.
This blog post was originally published on LinkedIn. Follow Judy Samuelson for more insights on business and society.