The world has changed but many boards ‘have not moved on’

Good morning.

Fortune pulled together a group of prominent members of corporate boards yesterday, in partnership with Diligent, to discuss the boards’ role in dealing what Walgreens CEO Rosalind Brewer referred to in yesterday’s newsletter as “the Great Rephrasing” of the corporation—a massive change in business attitudes and actions brought about by the confluence of a technological revolution, a pandemic, a mental health crisis, a racial and social justice crisis, a climate crisis and a rethinking of where and when work occurs. Former Unilever CEO Paul Polman posed the challenge for the group in particularly stark terms:

“This is going very, very fast… When you have this enormous scale of change—bigger than the Industrial Revolution—boards struggle with that. They’re just not equipped to deal with today’s challenges. It might sound harsh but that is the reality. They don’t reflect the real world anymore. They grew up at a different time and did an outstanding job, but then the world has moved on.

“And, frankly, many of the boards have not moved onbe it in digital knowledge, in ESG [environmental, social, and governance] knowledge, in fair representation of the population… We do have a problem that, frankly, with the urgency that we need to act right now, that boards might become a bottleneck.”

Gabrielle Sulzberger, who sits on the boards of Eli Lilly and Mastercard, among other companies, put it this way:

“It’s almost been a perfect storm of, you know, factors that have made us as board members focus on ESG. Between the pandemic, social justice issues, climate, conversations around recruitment and retention, salary inflation…the pace at which we are having to make these decisions and really look in a fundamental way at how we are approaching and engaging with our employees…It is really very challenging.”

And Amy Chang, board member at Disney and Procter & Gamble, offered this:

“The thing that I am so excited about, and that kind of lights me up, is the fact that we have employees pushing so hard on CEOs. If we look at it in the U.S., we’re already at 25% of the population is Gen Z, and they have $150 billion dollars in purchasing power. So, you can’t really afford to ignore them…I can’t even think of a CEO I work with that doesn’t think about that on an almost weekly or monthly basis.”

Brian Stafford, CEO of Diligent added this insight:

“ESG is the single most frequently asked question we get from our 750,000 board member users. Literally the single most frequently asked question. But it’s still super high level.”

For more on the rapidly evolving role of the corporate board, sign up for The Modern Board newsletter here. Other news below.

Alan Murray


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Electric cars

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Non-crypto constitution

The cryptocurrency collective ConstitutionDAO was outbid on its quest to buy one of the 13 surviving copies of the U.S. Constitution. The group's final bid was $40 million; the unidentified winner bid $41 million. ConstitutionDAO has promised to refund those who contributed to the fund. Fortune

Crypto froth

A survey shows a whopping 59% of Generation Z people in the U.S. think cryptocurrencies can make them millionaires. And Commonwealth Bank of Australia CEO Matt Comyn think financial institutions face "bigger risks in not participating" in the digital-asset boom than they do from the scene's volatility and speculative nature. Fortune

This edition of CEO Daily was edited by David Meyer.

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