The pandemic forced many companies to deal with a whirlwind of challenges that led to repeated pivots within their businesses. And for some executives, that experience has highlighted the importance of being upfront with their own corporate boards about difficult issues and snap decisions.
One thing executives agree is key to their relationships with their boards and within their companies broadly: transparency.
“I think that is the theme of how we all got through this period of time,” Stacey Cunningham, president of NYSE Group, home to the stock exchange, said at Fortune’s Most Powerful Women Summit conference in Washington, D.C., on Tuesday.
For Amy Weaver, president and chief financial officer at Salesforce, the “biggest challenge” regarding the board in the past year and a half was that “a board by definition has oversight ability. They’re not there with you, day to day, and…that’s fine on a usual basis when you have quarterly meetings,” she said. But during the pandemic, “suddenly you were forced to make decisions at lightning speed, and these are decisions that can truly change the entire trajectory of your company…So I think [we were] trying to figure out, ‘How do we balance that? Getting the board involved and getting them up to speed with what we’re doing?’”
At Salesforce, that meant extending an invitation to board members to join weekly all-hands calls. (Over half of the company’s board is still joining those meetings, Weaver said.)
Transparency and communication were also key at Clear, a touchless ID company. Caryn Seidman-Becker, its cofounder, chairman, and CEO, says that she and her board members started having calls “consistently.” That’s “the power of partnership that I had seen from a board perspective,” said Seidman-Becker, who is also a director at insurance fintech Lemonade. “I was just always sharing and always transparent, and I felt like they were our best advocates and allies.
“If you’re not consistently communicative with the board, then you can’t get the most out of that,” Seidman-Becker added. “Unless you’re looking for a rubber stamp, which has its own set of issues, you’d want a board to advise, you want their feedback.”
Indeed, some executives believe there’s recently been a lot more collaboration between boards and management teams.
Something as simple as picking up the phone more often could help foster a more open dynamic between the C-suite and its board. Cunningham recalled a story a fellow executive told her recently, that when the executive was CFO at her company, “the chair of the board reached out to her and said, ‘We’re going to talk every Friday. I want you to pick up the phone and call me every Friday,’ and she was surprised by the level of communication he was expecting to have. But he said, ‘I want you to call me every Friday so that when something goes wrong, picking up the phone and calling me isn’t a hard thing to do,’” Cunningham said. “You’d never want your first conversation to be a tough conversation. So communicating more often…helps with all of that, too.”
But executives say it’s not a one-way call to action.
“CEOs are under tremendous pressure for short-term profits,” Sheila Bair, board chairwoman at Fannie Mae, said. “So it’s important to have the CEO’s back and actually help make sure your CEO doesn’t fall into the trap of short-term thinking, because that can get a company longer term into trouble.
“I think at any organization, there’s a culture [where] people are tentative and fearful,” she said. “They think…‘Is the messenger going to get shot?’ I do think that that is incredibly important, for boards to have an open environment, and when you interact with your management…stay calm and ask questions.
“You need to reward transparency, good news or bad news,” Bair added. “You need to encourage it being brought to you.”
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