To sum up the most recent meeting of the United Nations Global Compact US Network, held October 19 at PricewaterhouseCoopers offices in San Francisco (I know, this post is terribly late):
Boards need to step up and listen up.
In his opening remarks, Allen White sounded the call that became the theme, reinforced and restated during each panel and discussion that followed. Companies need activist boards, he said, and he presented the following ideas for how companies can begin to cultivate boards that to meet the calls for better governance and attention to some of our most pressing issues:
1. Create a process by which boards reflect on stakeholder management, engagement, and governance.
2. Require all board members to build competency in sustainable governance.
3. Consider sustainability competency as a criterion for selecting new board members.
4. Require directors to hold management accountable for integration of sustainability.
5. Boards should set sustainability goals.
Carolyn Y. Woo, Dean of the Cardozo College of Business at the University of Notre Dame, acknowledged many of the challenges to effective board governance and noted that external pressure is one key to better governance. She also noted that board members need to demonstrate personal ethics and a “moral backbone”.
Several directors who attended and participated in panel discussions, including Dianne Dillon-Ridgely, Rinaldo Brutoco, and Bill Conway, echoed the sentiments of both Mr. White and Dean Woo.
I moderated a panel discussion entitled “Retooling the Board for the 21st Century. Panelists Helle Bank Jorgensen of PWC; Rinaldo Brutoco, director of Men’s Wearhouse; Brian Lowry, Deputy General Counsel at Monsanto; and Dean Woo addressed, in candid and lively fashion, how boards can be better educated, increase the ranks of women and minorities, and should oversee their companies’ sustainability performance. Key takeaways:
Everyone, from management to board members themselves, is responsible for making sure boards are educated on key issues of the day.
Boards need to make sure they understand stakeholder concerns; that may require greater accessibility to stakeholders.
Boards need to be more diverse. Much of the shift and change in the boardroom is due to diversity in terms of gender, ethnicity, background. Board composition should reflect the world we live in and the reality around us. Boards need to be presented, however, with the “good” reasons and data supporting increased board diversity.
The stakeholder panel, whose participants were Stu Dalheim (Calvert), Anne Simpson (CalPERS), Susan Mac Cormac (Morrison & Foerster LLP), and Jonathan Jacoby (Oxfam) addressed the trends in stakeholder engagement with boards, including the increased focus on shareholder rights and scrutiny on issues such as executive pay. A key takeaway was that boards need to be more open and engage more with stakeholder groups in order to better represent their interests.
Cecily Joseph, Director of Corporate Responsibility at Symantec and the UNGC US Network representative, closed with this succinct summary: Boards need to step up, be trained, have expertise in sustainability, hear from stakeholders, and be reflective of society. Hear, hear.