At Corporate Board Member‘s recent Boardroom Summit, three veteran directors—DaVita Chair Pamela Arway, Xcel Energy Executive Chair and former CEO Ben Fowke, and Anne Mulcahy, Lead Director for Johnson & Johnson and former Chair and CEO of Xerox—were asked to weigh in on the complex challenges facing boards, and the lessons directors can learn from the past two years of tumult. Key takeaways follow.
On Leading During Crisis:
Ben Fowke: Communication is the key. There’s always a temptation not to communicate if you don’t have all the answers. But if you wait for the answers, that void will get filled with rumors and other things that are counterproductive.
Pamela Arway: Lesson number one for me is never discount that a Black Swan event can happen, because it can, and you want to be prepared. The second lesson is that in an environment like the Covid crisis, what really comes to the fore is the mission and values of your company. That’s when it’s really going to be tested. A strong culture, strong mission, strong values is what will get you through a crisis.
On Director-Shareholder Engagement:
Anne Mulcahy: As a board member, it’s not my goal to replace investor relations. It’s my goal to supplement investor relations as needed. I think you do that on both a proactive and reactive basis. So you think about it proactively if there’s something that you need support for, such as a compensation plan. Investors are often very interested in that. That’s a great time to have a meeting with them. But also reactively, if they want to talk about anything that’s going on in the company, then my goal as the board chair is to listen.
On the Role of Boards on Social Issues:
Mulcahy: Boards have to look at those issues through the lens of their values, not a political lens, not even a constituency lens; it’s got to be a values lens. [Incidents like what happened to] George Floyd are times when silence is not an option. Racial inequity or Charlottesville, voter rights or pay equity—there are a lot of issues you can put through that lens and say, “Hey, companies have to have the courage to speak out on those issues and have a voice,” and be clear about how they evaluate what’s worthy of taking a position. I think this is where silence becomes its own statement, right? Silence often can become support for something that stands in the way of a company’s values. So, having the courage to take a position and express that is something that is an important part of leadership. That’s a big expectation from employees these days—that companies take a role and have a voice externally in their communities about significant issues. It’s not easy. It’s one of those things we discuss in the boardroom quite a bit in terms of where and how do you use that voice to make sure that we’re doing the right thing.
Fowke: Being visible and engaged at the CEO level and on the board level really makes a difference. George Floyd happened literally right in our backyard, and it had a profound impact on our community, our employees and, quite frankly, myself. The way we approached that, with the board’s support, was to get out there and have a lot of conversations, starting with myself, our most senior African-American C-Suite leader and with our industry urging us to adopt more best practices, making a difference, establishing goals and measuring those goals with our annual performance scorecard. All of these things really helped. So I’ve learned that if CEOs and their boards are committed and passionately making positive actions, then the workforce and others will respond.
On Silver Linings From the Covid Crisis:
Fowke: We learned we could make decisions quickly and without all the information, and obviously there’ll be a new work paradigm going forward. We’ll have some sort of hybrid, work flexibility program. We also really advanced the digital platforms, probably by five years in the last year, by necessity, in a lot of different ways, how we interface with our customers, how we integrate renewables. And I think it’s going to pay a lot of dividends in the years to come.
Mulcahy: The move to remote work or some blended characteristics of work made us all more aware of work-family challenges, and I hope that sticks with us. That’s hugely important, and it should not be the silent challenge. It should actually be part of the work plan. So I hope that sticks, the importance of human capital and engagement. I mean, it was extraordinary what people did, and it was very adaptive and not rules-based. With people empowered to actually get the work done, a lot of new ways of being productive emerged. Those will be gifts going forward in the future.
Arway: Another thing that’s come out of this is the focus on family and mental health. People are tired, burnt out, and mental health became really, really important, not just in the healthcare industry, but across all of our companies at all times. That was something that really wasn’t focused on or talked about very much before. I see that as a silver lining as well.
For more takeaways from the Boardroom Summit, see “Strengthening Your Board’s Role in Strategy.”