Paradigm Capital Chairman Peter Dey and Professor Sarah Kaplan published “360˚ Governance: Where Are the Directors in a World in Crisis?” Though the study was about Canada’s board governance, the analyses can be applied across all organizations’ corporate governance. So, what were those insights? In this article at Forbes, Robert G. Eccles shares the post-COVID corporate governance changes the authors have recommended.
New Corporate Governance Policies
Kaplan observed, “It’s one thing to say that a company will pursue value creation for all stakeholders, it’s another thing to make that reality.” When WHO declared the COVID-19 outbreak as a pandemic, company board members had to prioritize things overnight. Implementation was not easy. So, the authors have a 13-point guideline to streamline corporate governance shifts:
Regularly Revisit the Purpose
Your company vision will frequently change because of the volatile market conditions. Derive value by including the changing demands.
Define Duty
The first and foremost duty of any board member of your corporate governance committee must be towards the betterment of your organization. So, all the decisions should be for the company’s growth.
Manage Stakeholders
Every organization will have stakeholders with unique interests that differentiate your organizational culture from competitors. Therefore, you must acknowledge and align your corporate governance policies based on that.
Honor the Indigenous
When you are setting up a business in a country, you must honor the legacies of the land, i.e., the culture of the indigenous people. Their interests should be an essential asset to the long-term growth of your business.
Issue Annual Stakeholder Reports
To understand if the corporate governance team is making a better future for the company, you must issue a report regarding stakeholder influences.
Engage with Stakeholders
Not only should you analyze the tangible benefits of the stakeholder inputs but also encourage top influencers to engage with them.
Mitigate Differences
You cannot ignore differences in opinion among stakeholders. However, the trade-offs should be more of a win-win for both parties if you want the business to thrive.
Have a Good Compensation Policy
Perks are encouragements that top management needs to stay aligned with corporate governance policies. You must make sure that their efforts are paid for.
Upgrade the Board
You should have room for diversity and make it more inclusive and forward-thinking as the years pass. This will enable your company to be a market leader.
Diversify the Organization
Diversity should be implemented across the corporate hierarchy. The more inclusive you become, the more ideas you get, which further broadens your capacity to cater to various customers.
Think About the Climate
“Every corporation should have and disclose its policy for addressing climate change,” recommend the authors. You should follow through with your plan of action to stay relevant for future stakeholders.
Take a Stand
Now is not the time to stay passive. Remember to consult your board before issuing a statement on social or political issues.
To view the original article in full, visit the following link: https://www.forbes.com/sites/bobeccles/2021/03/29/lessons-from-covid-19-for-company-board-directors-heres-how-to-upgrade-your-corporate-governance/?sh=24b724c216c9
