Happy Friday. Some changes can only happen from the top.
As the pressures on businesses to respond to a rapidly changing world become more extreme, the role of the corporate board is shifting. It needed to, says Fortune’s Lila MacLellan.
“Today, the best boards operate as an advisory team, almost player-coaches, who manage multiple pressures, including traditional expectations around increasing revenues and building strong leadership succession plans, but also newer requirements, such as shrinking a firm’s carbon footprint, boosting social equity, and complying with increased regulations,” she says.
This is why Fortune’s second-annual Modern Board 25 list has become such a vital snapshot of future business success. It’s a tangible sign that companies are taking shareholder needs seriously through a stakeholder approach to managing opportunity and risk. And that means drawing from a wide range of expertise and asking directors to work differently.
This year’s ranking, published this week, looks for governance innovation within S&P 500 companies by measuring board independence, financial performance, sustainability, diversity, and range of expertise.
Every company on the list has an important lesson to share, but I was particularly delighted to see Seattle-based cybersecurity company F5 atop the list. Its CEO, François Locoh-Donou, inherited a homogeneous board when he joined the firm in 2017. Locoh-Donou, one of the few Black leaders of a major tech firm, immediately sought to balance the board and his executive team by drawing expertise from underrepresented populations. “I felt strongly that the technology industry at large had been apathetic to the issue of creating more diverse and inclusive environments,” he says.
I got to know Locoh-Donou in 2021 while moderating F5’s Real Talk in Tech event, which convened Black business superstars and racial bias experts to offer candid career advice to Black tech professionals at every stage of their careers. It got very real. (You can watch it here.) It was apparent then that he was working with a different playbook, which is now reflected in the firm’s continued success. Despite economic headwinds, the company saw revenue rise 11% year over year in the second quarter of 2023.
But if change is to come from the top, the people in those spots need to be prepared to do the work.
“I think the stakes are higher for directors today,” Locoh-Donou tells Fortune. “The bar for governance, which includes regularly assessing the performance of members, ensuring the right representation of board members, the practice of succession planning for directors, issues related to ESG—all of these things have moved up a notch year after year. Being a director today requires being quite an athlete on all these topics.”
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
This edition of raceAhead was edited by Ruth Umoh.
On Point
How to address DEI resisters in your organization
When it comes to inclusion skeptics, Y-Vonne Hutchinson, the CEO and founder of inclusion training firm ReadySet, has heard it all. She outlines the five most common ways internal resistance prevents progress from happening inside companies. One stands out as the most pervasive and annoying. “Detractors often hide their resistance in an endless string of requests for more information 'proving' that employees will be happier, or the business will profit more if a DEI program is added or deepened,” she writes. It’s a stall tactic that threatens overall success.
Fortune
A book about George Floyd wins Pulitzer Prize
His Name Is George Floyd, by former Washington Post reporters Robert Samuels and Toluse Olorunnipa, is based in part on the paper’s October 2020 series, George Floyd’s America. The two joined Poynter’s Kelly McBride to discuss their reporting and why this work matters. "The simple story is we’re talking about George Floyd’s life. But the deeper story is that when you pull apart everything that happened in George Floyd’s life, so much of it was fueled, tainted, powered by these larger structures that existed that George Floyd didn’t necessarily know about,” says Samuels.
Poynter
FDA eases restrictions on gay and bisexual blood donors
The longstanding policy, widely denounced as discriminatory, will be replaced by new guidance that will ask all potential donors questions about their recent sexual activity and preclude blood donations from people taking oral PrEP to avoid false negatives during blood testing. Canada and the U.K. have recently made similar adjustments to their policies.
New York Times
Writers strike is also about diversity
Some 11,500 Writers Guild of America members went on strike earlier this month, asking for adjustments to pay, transparency in streaming numbers, and minimum staffing guarantees, among other things. But by squeezing writer pay and opportunity—smaller writing rooms and shorter engagements—the industry is also squeezing out the Black and Latinx talent who don’t have the contacts or financial means to stick it out until they find more stable work.
In These Times
On Background
The racist history of prom
We’ve already explored the racist history of swimming, square dancing, and even tomatoes. But college proms, once short for promenade, were highly segregated affairs, designed initially to be a lower-rent version of the debutante balls for the elites and an opportunity to introduce middle-class young women to society (and potentially eligible husbands). By the 1920s, the concept was extended to high school and, with it, the rigid social norms of gender-based behavior and white supremacy. After Brown v. Board of Education, proms became a battleground for integration. Spoiler alert: It didn’t always work. Plenty of single-race proms still exist, and Wilcox County High School in Abbeville, Ga., held its first-ever integrated prom in 2013.
History
Parting Words
“When I got home, my Dad reminded me that we don't do things for awards and recognition. He's right. We do it for the children in our country who deserve to inherit a better world. We do it for the hope that the world [will] give us more grace when they deem us suspicious. We do it because journalism is an exercise of optimism. And we believed that people, when armed with information that's nuanced and honest, make better decisions. That said, I'm going back to make some phone calls for my next story. I can't wait for someone to pick up.”
—Robert Samuels, on winning the Pulitzer Prize for His Name is George Floyd