It should go without saying that governance in today’s complex business environment is no walk in the park. But are there lessons to be learned from a run in the Sahara? At the recent 2014 NACD Board Leadership Conference, documentary filmmaker Jennifer Steinman aimed to provide the answer to that question in a session titled “Going Beyond: Stories of Pushing Past Personal Limits.”
In the session, Steinman told the story of the creation of her latest film, “Desert Runners,” which follows people who take on the formidable challenge of competing in the 4 Deserts Race Series (4 Deserts). 4 Deserts includes a series of four ultra-marathons: races involving distances greater than the 26.2 miles that compose a typical marathon. The races take place in some of the most inhospitable environments on earth, including the Sahara, Gobi, and Atacama deserts, and Antarctica.
Steinman began the film project with a series of questions, including “what are these perceived limitations that we put on ourselves?” and “are these crazy people?” She arrived at the first race expecting to find a group of elite, superhuman athletes, and was surprised to find that, for the most part, the runners were what you might call “everyday” people; people with day jobs, mortgages, and families. Steinman’s film follows four people who decided to take on this challenge. In the course of the conference session, attendees were introduced—through video clips—to three of them: a student named Samantha, age 25; an American consultant named Ricky, age 33; and Dave, a 56-year-old marketing director and friend of Steinman’s who introduced her to the competition. Dave was one of 13 runners attempting to complete all four grueling races of 4 Deserts in one year, a feat known as the “Grand Slam.”
Steinman shared a series of her favorite clips from the documentary, and as might be imagined, Samantha, Ricky, and Dave confronted a wide variety of physical challenges, including dehydration, illness, exhaustion, and a great deal of pain.
So how did all of that tie into directorship? The challenges and struggles of the runners echoed many of the themes emphasized elsewhere at conference.
An injury suffered by Ricky provides an example. Given the long distances and extreme conditions involved in the races of 4 Deserts, some degree of pain is unavoidable. However, as Steinman pointed out, racers must constantly ask themselves, “is this real pain, pain I need to deal with, pain that can do real damage?” If the answer is “yes” to those questions, as it was in Ricky’s case, a runner needs to recognize this and give it the attention it requires. However, if the answer is “no,” any runner who intends to finish the race must recognize this, and avoid attaching more meaning to the pain than is merited.
As part of risk oversight, directors also receive an overwhelming amount of urgent information from a variety of sources, and must contextualize it on the basis of their own experience so they can ask the right questions of management. The board should ensure that the risk oversight processes in place have the capability to differentiate between a real threat and the intermittent challenges that occur in the normal course of business. When a real threat is detected, a director must not let pride get in the way of taking the appropriate actions, as the consequences could become progressively worse.
Another of Steinman’s film clips showed a series of gruesome injuries suffered by runners. Watching the clips quite naturally might cause one to wonder why anyone would willingly participate in such a competition. Steinman found that part of the answer to that stemmed from the camaraderie of being marooned in the desert with a common goal. While a small contingent of elite runners are in the race to win, the vast majority have the simple goal of finishing. Even a relatively competitive person would likely concede that running consecutive marathons across the Sahara or Antarctica is hardly your typical “participation medal,” and many runners rely on each other at times to accomplish this remarkable feat.
In a particularly poignant clip, a professional runner holds Samantha by the hand and they help each other to the next check point. Though they may be significantly different in kind, corporate directors certainly face their own challenges. The reasons directors take on the responsibilities and liabilities inherent in the role are many, but by concentrating on the reasons they are there, and augmenting their own expertise with the expertise of others around the table, each director, board, and company can reach their goals.
The Securities and Exchange Commission (SEC) is charged with maintaining fair and efficient markets, facilitating capital formation, and, like directors, protecting investor interests. This regulatory arm of the federal government has a significant impact on businesses, but many may not effectively understand the commission’s inner workings. Providing directors with an insider look at the SEC was a panel comprised of: Mark D. Cahn, former general counsel of the SEC’s Office of the General Counsel, and partner at WilmerHale; Thomas J. Kim, partner at Sidley Austin and former chief counsel and associate director of the SEC’s Division of Corporation Finance; Troy Paredes, senior strategy and policy advisor at PwC and former SEC commissioner; and moderator Kendra Decker, partner in Grant Thornton’s National Professional Standards Group.
The SEC has five commissioners, each of whom is selected by the president of the United States, and no more than three of them can be from the same political party. The president also selects one commissioner to serve as chair. The chair sets the agenda and makes senior hiring decisions; however, this does not create a hierarchy as that professional title might imply. The commissioners are like a board of directors, with each person maintaining their own, independent voice as they vote on the issues set before them.
“No one commissioner has the power to do anything,” Kim said. “They only have power by acting as a commission, just like a board must act as a collective body.” Although the SEC is generally thought of as a rulemaking entity, Cahn pointed out that it’s a relatively infrequent occurrence that commissioners actually cast a vote. The organization’s day-to-day workings are processed at the staff level—and, in turn, the division heads engage with the commissioners.
The panel also drew attention to challenges within the commission. For Cahn, the biggest challenge with regard to rulemaking is the Government in the Sunshine Act of 1976, which requires all commission deliberations to be carried out in public. “You end up with meetings of two commissioners with staff members to discuss issues when they could be much more productive to work out matters as a group.”
In addition, trying to pass a rule through a multi-member commission can turn into a game of chess, with each member making suggestions for changes up until the last minute. If a rule passes with a split vote, those dissenting opinions serve as a roadmap to potential litigants who want to challenge the rule—a factor that emphasizes the importance of unanimity within the commission. “I think it [speaks] well for the agency overall when there’s consensus,” Parades said. “But sometimes you can’t bridge those differences. Another aspect is, from time to time, chairs have had a norm where they wouldn’t go forward unless there was a norm of four. What that does, it forces people to compromise and it doesn’t allow those in the majority to say that ‘this is what we’re going to do, regardless.’”
Despite these complexities, Paredes stressed the critical importance of third-party engagement. “The SEC is able to better evaluate the consequences of their rulemaking if they are able to hear from the people their rules are going to impact,” he said. “If [SEC] folks aren’t hearing that through one mechanism or another, there are going to be serious blind spots.”
In Buddhism, mindfulness is a facet of meditation in which an individual focuses their attention on the thoughts, feelings, or sensations happening in the moment. In psychology, studies suggests that mindfulness improves an individual’s quality of life, boosting memory and reducing stress and anxiety, among other benefits. In business, the adoption of these techniques has shown to improve productivity—so much so, that even Fortune 50 companies and the U.S. military are integrating mindfulness practices into the workday. Mindfulness expert Janet Nima Taylor—an American Buddhist nun, author, and co-founder of meditation resource organization Serenity Pause—gave directors attending the 2014 NACD Board Leadership Conference a crash course in effective techniques and how to integrate meditation into a company’s daily operations.
Meditation has been an integral part of wellness for millennia, but it’s a practice that is just now finding wide acceptance in corporate culture—and it’s also a proven means of improving business. According to Taylor, there’s plenty of research that attests to how meditation induces physiological and mental changes that influence how you interact with yourself and the world around you. The key to mindfulness, she said, is to create a gap between stimulus and response. Research says that 90 percent of our day involves responding in habitual ways, but creating this gap allows people to consider alternatives and discover new ways of resolving problems. During her session, Taylor offered three practices that directors can easily integrate into their everyday lives, even while they’re on the go. “If you’re breathing, you have time,” Taylor said.
1. Concentration. Mindfulness is not about stopping thinking, but rather shifts in how we interact with our thoughts. Momentarily forget those top-of-mind concerns and be completely still. Breathe in and count to four. Breathe out, count to six. Physiologically, this exercise lowers blood pressure. Conversely, when people are stressed, they tend to take shallow breaths and their bodies become oxygen deprived. Taking a moment to get the oxygen flowing can impact how you’re able to make decisions because doing so calms the body’s “fight or flight” response along with its associated stress hormones. Concentration also affords an individual heightened awareness of oneself, which allows them to be more present in the moment. By extension, when board meetings get contentious, directors should take a moment to breathe and write down the words that describe how they’re feeling. This exercise forces people to better articulate themselves and moves them away from the desire to be competitive toward wanting to be cooperative despite differences in perspective and opinion.
2. Natural Awareness. In our technology-centric culture, Taylor observed, people tend to live in their heads, making it easy to lose track of what is happening in one’s body below the neck. A person needs to permit himself or herself to do absolutely nothing for five minutes and use their senses to become completely aware of what is happening throughout their body in that given moment. Culturally, people are wired to be continuously active, but research shows that people who set aside time to momentarily do nothing are far more productive than those who are always engaged.
3. Positive Imagery. The human mind has a highly active imagination. This capacity for flights of fancy can be used to an effective end. If faced with a source of stress, create a positive spin on that disruptive force and focus on that self-generated positive imagery. That focus will help neutralize the negative situation.
A study published in the Journal of Occupational Health Psychology showed that employees who participated in a free 12-week mindfulness program showed a significant reduction in stress. Integrating these practices into a business environment starts with the tone at the top. From the boardroom down through the employee level, people can look to leaders’ involvement to signal that these practices are acceptable in the workplace.
“Using the power of your mind is a teachable skill,” Taylor said. For a business, these tools help people to become better empowered to work together. And with company leadership on board, the positive benefits of mindfulness can transcend the organization.