A new company seems to get caught in the culture wars crossfire every week. (This week, it was Target’s turn.)
Fortunately, CEOs have boards to consult when their companies drift into troubled waters. The not-so-great news? Boards themselves are dealing with growing pains and internal conflicts that come with recruiting first-time directors from a range of backgrounds.
To be sure, boards are diversifying slowly, but the winds of change are still disruptive, ushering in a new generation of executives. As a result, board members might not only disagree on particular issues but sometimes do not speak a common language and value different communication styles. Meanwhile, new and veteran directors alike face an ever-growing list of complicated and politically fraught issues, from abortion and gun rights to digital privacy.
Seeing this, the National Association of Corporate Directors commissioned a report to shine a light on board culture. A select group of public and private directors is reviewing the cultural landscape of boards, intending to publish guidelines to help boards become more inclusive and effective.
Mary Winston, who sits on the boards of Chipotle, Northrop Grumman, TD Bank Group, and Acuity Brands, is cochair of the commission. Members are still deciding which governance subtopics to cover, but she imagines examining the onboarding process, for example, and exploring how boards can cultivate genuinely welcoming spaces for incoming directors, so they feel encouraged to provide input as soon as they arrive.
Winston recalls joining her first board 18 years ago. Though she arrived full of confidence about her abilities, she says, “All of a sudden, you’re the new person on the block, and you’re trying to understand the dynamics.” How much can you say? Where are the lines? “I was younger than everybody else. I was the only person of color, and it was an interesting environment,” she says.
Oscar Munoz, Winston’s cochair and a director at CBRE, Salesforce, TelevisaUnivision, and other companies, says he wants the report to help broaden board members’ perspectives and give them concrete tools to “develop their own philosophy on how they want to broach [divisive] issues in a safe environment.” It’s a skill that boards will have to perfect now that virtually any topic can trigger boycotts and other forms of activism.
On generational differences, Munoz says: “It’s important for all of us who may be part of the more senior cohort on boards to remember that we were once that younger cohort.” That wave of directors, too, arrived full of vim and vigor and can recall “how it felt to be pushed to the side and told, ‘You need to learn a little bit more.’”
“I think both sides can reflect upon their own journey and how important it is to get the viewpoints of this new group because it is a contemporary viewpoint,” says Munoz, also the former CEO of United Airlines. ESG, he points out, didn’t exist when he first became a director; now, it’s a driver of consumer behavior and employee sentiment.
The Blue Ribbon Commission report will be out in September. See a full list of commission members here.
“Anti-LGBTQ violence and hate should not be winning in America, but it will continue to until corporate leaders step up as heroes for their LGBTQ employees and consumers and do not cave to fringe activists calling for censorship.”
—Sarah Kate Ellis, president and CEO of GLAAD, addressing Target’s decision to pull products from its Pride Month display following a backlash from right-wing consumers.
On the Agenda
👓 The forthcoming all-white, all-male succession battle at Morgan Stanley can’t be too vicious. Candidates who partake in Machiavellian politicking will be disqualified, writes the Financial Times in this feature about the top contenders to replace CEO James Gorman.
🎧 Tax audits are a drag, but only in specific ways, according to research by a University of Texas at Austin professor.
📖 Nearly 90% of Ethisphere’s “most ethical companies” provide standalone training for board members. See other top takeaways from this year's ranking.
- Peloton’s failed attempts to ditch its reputation as a fitness bike maker will one day make a great business school case study. The Verge has the latest.
- California’s bill mandating board diversity faced another legal setback when a federal district court ruled it violated the Constitution’s equal protection clause. Bloomberg Law spoke to experts about what this means for boards.
- Another tsunami of COVID cases is about to flood China. Fortune looks at the possible global consequences.
- Monomodal ChatGPT is so last month. Multimodal is the new buzz term in A.I. apps.
Boards who grill their CEOs over the company’s share price and little else may one day find their chief executives facing a very different interrogation. Sen. Bernie Sanders (I-Vt.) has been using his political celebrity and position as chair of the Health, Education, Labor and Pensions Committee to call powerful corporate leaders to Washington where he can ask them—on the record—about their plans to share profits with employees or lower prices for consumers. The famously grumpy senator clearly relishes his current role, the Washington Post writes.
Here’s a snippet from his conversation with journalist Kara Voght:
“‘We’re having a very interesting hearing—pay attention to it!’ Sanders says from across the table. The CEOs of three major insulin manufacturers were scheduled to appear alongside the CEOs of three companies that manage prescription drug prices for health insurers. ‘All on one panel’ Sanders yelps with punchline-like emphasis.
‘These are two industries, both very profitable—both, in my view, are responsible for the outrageously high prices that we pay,’ he says, jamming his index finger into the table for emphasis. ‘Each is very critical of the other one. So I want to hear what they’re going to say about each other.’
So, he was planning to hold, like, a debate?
‘Thaaaaaat’s right!’ he roars, gripping the table as he leans forward. ‘We’re not supplying the whipped cream pie—that, we’re not supplying!’ He chuckles at his own joke.”
Read the full report here and have a laugh this weekend.
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