This September, more than 1,600 attendees gathered to attend the NACD Global Leaders’ Summit in Washington, DC, where directors heard leading scholars, thought leaders, and business minds elucidate complex topics, and provide meaningful insight into all things corporate governance. Speakers ranged from Janet Yellen, the Former Chair of the Board of Governors of the Federal Reserve System, to Dambisa Moyo, a Global Economist, Author, and Director of Barclays Bank, Chevron, and 3M. This event covered a diverse range of topics giving integral, in-depth coverage of issues directors face today, and will face in the future within all industries. Out of the extensive programming, here are some key takeaways that are applicable to boards and beyond.
Diversity is vital in companies and the boardroom.
In a fireside chat led by venture capitalist Alicia Syrett, John Rogers of Ariel Investments encouraged directors to, “ask about the diversity of the teams you work with,” when discussing work with third parties. “Boards are just more involved than ever and are making more decisions. The independence of boards is dramatically different from what it used to be,” said Rogers. He went on to describe how having a “1940s board” in terms of composition will significantly repel investors who look to a company’s future potential. This lack of socioeconomic diversity can lead to a lack of competing perspectives in boardroom decision making, which impedes progress and long-term growth.
Rogers also gave recommendations to first-time board members on how they approach the new experience. In summary, he suggested that new directors ask a lot of good questions, avoid giving monologue-esque speeches (so not to “harangue” and “opine”), prioritize being a good listener and teammate, and, finally, strive to add explicit value to board meetings by focusing on the issues that directors can be creative in and care about.
“We only want to invest in 21st century companies.”—John W. Rogers, Chairman, CEO, CIO, and Lead Portfolio Manager of Ariel Investments
“Culture is a business-critical priority.”
Human resources expert Libby Sartain touched on a range of issues, but perhaps her most salient point was how corporate culture is changing the way employees are recruited and retained, and can be an indicator of the overall health of a company. She stressed that it is essential to explicitly define board and corporate culture and have a robust talent management program. This helps companies decide who fits within the organization, who should be invested in and developed, and who doesn’t meet the criteria and standards. She also encouraged assessing the health of culture through surveys, exit interviews, and affinity groups on the outreach council. Having a solid corporate culture also serves as a marketing tool to attract top talent.
Retail is becoming even more experiential.
Brick-and-mortar retailers need more than a good (or even a great) product, especially when they’re competing with the ease of online shopping. According to a panel that consisted of leaders from retail giants Eileen Fisher, Pinkberry, and SPROCKIT, consumers are craving “experiential, authentic, personalized, and holistic,” encounters when they go shopping. Brands are starting to use different tactics in their messaging and strategy to make their one-off product look like a lifestyle brand. This strategy is implemented by multiple marketing channels through micro-influencers, targeted social media ads, and brand partnerships (i.e. Pinkberry shops featured in Macy’s stores) to get people previewing products online and then mobilizing them to purchase in-store. “Retail isn’t dead; rather, [we’re seeing] a convergence of digital and brick-and-mortar,” said a member of the panel.
Data. Data. Data.
A common theme throughout the conference was the proliferation of data points, sources, and security concerns in all industries. From a retail perspective, there are multitudes of data that can be collected on people’s shopping habits. “The experience they want is the data you need,” said a member of the Future of Retail panel. The hard part is ciphering through it all, and successfully being able to “think for the consumer” and “make the customer experience frictionless.”
In all industries it’s important to learn from data, analyze, and potentially pivot, and artificial intelligence and other predictive technologies are making that easier. This technology gives companies a major competitive edge, which FBI Director Christopher Wray says, is also a challenge. Wray warns that proprietary and advanced technology/information is constantly at risk now due to cyber-attacks orchestrated by foreign state agents. He urged to directors to not be afraid of the government and to coordinate with them if/when their companies are attacked in order to minimize damage and hold bad actors accountable.
Truth doesn’t matter in a post-truth world.
On a more societal, psychological level, the conversation on truth in a post-truth world provided insight into current human decision making and sentiment. It goes without saying that proliferated access to information has led to increased self-interest and confidence people have when looking for answers to questions—no matter the nuance, complexity, or subject. This wealth of available information sounds favorable; however, it isn’t all good. Much to the chagrin of subject matter experts, there is a now virtually no barrier to contribute to and glean information from the internet and social media—both proving to be powerful tools to spread disinformation. With the creation of new “experts” comes new social dynamics. Now, when someone’s credibility is questioned it becomes an attack on their identity. The response? Either admitting inaccuracy or doubling down on non-objective beliefs (the latter has the potential to cause major disruption). Both speakers suggested the idea of the “trusted messenger” as a way to increase transparency and accuracy of information.
Ultimately, the Summit not only provided insight into directorship trends and board oversight best practices, but also offered C-level/expert perspective on issues that any business can face: board director or not.
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