Topics: Corporate Governance
Topics: Corporate Governance
September 15, 2021
September 15, 2021
Directors are eager to return to the boardroom. When PwC surveyed board members, executives, and governance professionals about their return-to-the-office plans in early August, 93 percent said they had either already resumed meeting in person or intended to do so by the end of the year. The recent increase in COVID-19 cases and the rise of the Delta variant may have changed some boards’ plans, but it is clear that most directors want to get back to face-to-face meetings as soon as it is safe to do so.
Whenever in-person board meetings do resume, directors will have their work cut out for them. Virtual meetings clearly had value during the pandemic, with 54 percent of those surveyed saying their board would continue to meet virtually some of the time going forward. But some of the board’s most important jobs became more difficult when everything moved online.
Directors would do well to ask themselves two questions to help frame the tasks at hand: First, what has changed in the world since our last pre-pandemic, face-to-face meeting? And second, what has changed about how we do our jobs now that we are together again?
Here are some areas that boards may wish to focus on as they resume meeting in person.
The pandemic has undoubtedly taken a toll on companies’ workers, one of their most valuable resources. Many companies are finding that the shift to flexible work arrangements for many employees has sped up the long-predicted transition to new, digitally enabled ways of working. Others are evaluating how return-to-the-workplace programs planned before the Delta variant surge are going as infection rates rise across the country.
The return to the boardroom should serve as a reminder to directors of their duty to oversee talent and human capital strategy and policy at their companies. Historically, in this area, boards have focused on executive compensation and C-suite succession planning. The pandemic should nudge them to broaden the lens. Simply put, staying on the sidelines on broader talent questions is no longer an option, especially as employees begin returning to the physical workplace, as well.
That’s not to say that C-suite succession planning is less important now. In fact, returning to in-person board meetings presents directors with an excellent opportunity to raise their game in this area.
Evaluating the depth of a company’s executive ranks is one of the most important steps the board can take as part of its duty to oversee leadership development. Getting back to in-person meetings should mean more face time with the board for the company’s rising stars. That will give directors a clearer sense of who is best equipped to step into leadership roles in the future.
Boards can facilitate this process by suggesting that the CEO, chief financial officer, and other top leaders recommend a broader range of up-and-coming executives to participate in boardroom presentations or to simply interact with directors. And if executives say no one is ready to take that step, that’s valuable information, too.
Directors who were elected in 2020 may well have served for over a year without having met any of their fellow board members in person. Many of this year’s newly elected directors are likely in the same boat. Making sure they are well integrated into the board culture should be a top concern.
What does that look like? For one, to the extent it is safe to do so, boards shouldn’t overlook the importance of resuming the social events that were a pre-pandemic staple of board meetings. Dinners and other outings have tremendous value in building camaraderie among directors and fostering relationships that make the work of governance more manageable and more effective.
It’s also important to make sure that directors who have only served while virtual meetings predominated have the chance to get to know the company’s top executives outside of video calls. Arranging opportunities for one-on-one chats with the CEO and other leaders should be a priority.
The pandemic has affected the risks companies face, as well as their opportunities for future growth. As boards reconvene in person, it’s a good time to take stock of the company’s strategic direction—and the board’s role in overseeing it. Whether the company pivoted during the pandemic or stayed the course, directors shouldn’t shy away from asking whether those decisions panned out.
Boards can also take a look at their own performance during the pandemic thus far. Did directors continue to ask challenging questions of the management team and hold them to account? Were they able to get all the data and other information they needed to provide adequate oversight? Did the board remain engaged, come prepared for meetings, and put sufficient time into their duties?
Everyone is eager to put the pandemic and all its disruption and uncertainty behind them. But directors should aim to do more than get back to business as usual. Boards have important work to do to help their companies thrive—and there’s no better time to start than now.
Paul DeNicola is a principal in PwC’s Governance Insights Center.
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