Happy New Year readers and welcome to 2022’s first edition of The Modern Board, its first as a weekly newsletter! Stick with us for weekly updates on what matters most to corporate leaders and how boards are steering their companies through today’s choppy climate.
As we continue in the early stages for this new era of work, two years after the outbreak of COVID-19 changed everything, a lot of new terminology is taking hold in the workplace.
In addition to precautions for safely bringing employees back to the office (mask and vaccination policies, social distancing, hybrid work), people are using more technology and also adjusting to new standards for success, leading to new conversations in boardrooms and the C-suite.
Environment, social, governance (ESG) and diversity, equity, and inclusion (DEI) strategies are top of mind for corporate leaders today. Many leaders focused on this space feel that these considerations should be ingrained throughout all parts of the business, the same way the concepts of profit margin or efficiency are. You can’t silo DEI or social responsibility.
On top of that, talent is overwhelmingly a priority as the labor force reaches the conclusion that climbing the career ladder isn’t all it’s cut out to be. People are still leaving their jobs at record high rates.
Ultimately, the foundations of people management have changed, and failure has steeper consequences. As a result, new words and terms are emerging in boardrooms and executive suites across the world, such as fairness, psychological safety, and purpose.
In order to succeed in attracting, hiring, and retaining top talent, the skillset commonly referred to as “soft skills” is more important than ever. Even for technical roles, interpersonal skills are becoming more important, as HackerRank CEO Vivek Ravisankar previously told Fortune.
While leaders may decry having to emphasize ethics or interpersonal behavior, believing the quality of the work is the only thing that matters, the “no asshole rule” has widespread benefits, and may see an expansion in the future.
Gartner’s HR research practice (full disclosure: of which I am a former employee) highlighted fairness as a key priority for business leaders going forward. They define fairness as an environment “where employees perceive that their manager and organization treat them fairly.” Chief of research Brian Kropp said fairness is going to be “the most important initiative for HR executives in 2022.”
Psychological safety is another topic that has come up in my interviews with a wide range of people, including Claire Schmidt, founder and CEO of AllVoices, an anonymous feedback platform that allows employees to raise issues with management, and Jesus Mantas, a senior managing partner at IBM who oversees M&A strategy for the company’s consulting division.
These are two very different types of work, but psychological safety is the goal of Schmidt’s company and a key component of Mantas’ integration efforts.
Purpose is also becoming a topic of interest for companies looking to engage their employees on a deeper level. Earning the highest salary at the most prominent company possible is no longer the default goal, as multiple professors have noticed. At the corporate level, companies like Unilever run extensive training around purpose to nurture employees in their career journey and others have also recently formalized this missive by hiring a chief purpose officer.
Ultimately, discussing equity, social responsibility, fairness, respect, and psychological safety allow us to bring much more nuance into the culture strategy conversation. Understanding these emerging concepts can help with retention, engagement, and meeting the growing need people are feeling to find meaning at work.
Aman Kidwai
aman.kidwai@fortune.com
Headlines
Tech startup adds staff engineer to board of directors
This is a common practice globally but virtually unheard of in the United States. Paul Osman, an engineer who has been with the company for two years, is joining the Honeycomb board as a voting member for a one-year term. Anna Kramer of Protocol reports that the Osman was chosen by a ranked-choice vote and all employees had the chance to earn the position.
“This isn’t about trying to attract people with ping pong in the office, and free beer. This hits the different level of attracting certain employees,” Osman said.
Charity Majors, Honeycomb’s chief technology officer, said the move is “part of who we are as a company.”
“People are demanding more of their employers,” Majors said. “When you look at labor relations in the Valley, there’s a need for innovation right now.”
AngelList launching a fund that values startups based on hiring velocity
A nod to the rising value of talent strategy and acknowledgement of its importance, AngelList is looking to make quantitative assessments of a company’s hiring popularity as a means of determining their long-term potential.
According to Natasha Mascarenhas from TechCrunch, this metric includes the number of job applications a company receives, while stripping out external factors that may inflate a company’s valuation.
This is an interesting consideration for major corporations as they think about the workforce metrics that matter most to them and how they can use them to drive success via the people metrics disclosures now required by the SEC.
Commentary: GE has tried everything, except investing in American workers
As the representative of the largest workers union for US-based GE employees, Chris Shelton felt compelled to share some thoughts, criticizing a business model he said is too reliant on offshoring.
“In 1989, GE employed 277,000 workers in the U.S. In 2019, that number was only 70,000… GE has benefited mightily from taxpayer bailouts and government contracts, yet it has continued to move jobs, shutter plants, break promises to retirees, downsize domestic manufacturing, and implement other cuts that have irreparably harmed American workers. The company has slashed its U.S. workforce by 47% in just the past three years. … Rather than innovate and invest here in America, GE and its suppliers have closed plants in recent years in Virginia, Ohio, Georgia, Arkansas, South Dakota, and Texas, decimating blue-collar communities and leaving loyal employees scrambling for survival.”
The persistence of corporate America’s racial gap
A Washington Post study of the 50 largest public companies found that only eight percent of C-suite executives are Black, and that 16% do not list any Black members of their leadership team as of December. Five companies had more than 20% Black representation while 14 companies declined to share the demographic information of their leadership with the Post.
The main reason for the lack of progress on this front, people say, is the dissonance of rising awareness of structural racism going up against “diversity fatigue” or backlash from people who are resistant to change.
“It became a battle between how far do we want to lean into this and not wanting to turn folks off," Lee Jourdan, the former chief diversity officer at Chevron, said in an interview with the Post.
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MORE FROM THE MODERN BOARD
The Modern Board is not just a newsletter, it’s a section of the Fortune site that is producing regular coverage of corporate leadership. Here is some of our latest:
How and why workplace tech is becoming more inclusive
Shake Shack’s CEO-chair relationship is a big reason why it survived COVID-19
CMO of Airtable on bringing the customer voice to the board
How to find and hire the best tech talent in 2022
Tech leaders continue to grow their presence on corporate boards
Numbers that matter
27%
Gartner’s aforementioned research found that employees at companies with high-fairness environments perform at a higher level and are 27% less likely to quit. In this era of The Great Resignation, can you afford to ignore fairness in your people strategy?
In an interview with Fortune, Brian Kropp, chief of research for Gartner HR, said some of the factors that will come up in fairness include salary for remote employees, vaccination mandates, support for parents and non-parents alike, and equitable treatment for Black and female colleagues.
“Not only is it the right thing to do, and the morally and ethically responsible thing to do. It's the right business thing to do when you're running your company, because when you treat employees fairly and more equitably, they’re higher performing and less likely to quit.”
