We have many labels for today’s unprecedented challenges — VUCA (volatility, uncertainty, complexity and ambiguity) and BANI (brittle, anxious, non-linear and incomprehensible) being among them.
How might boards proceed in these unprecedented times? Normally (and appropriately), we have kept politics and government policy direction out of the boardroom. But these are not normal times.
Our duty as board members is to help foretell the future and its implications for our businesses. Assuming everything will work out as it did in prior administrations and that nothing transformative will occur may reduce our stress. Nevertheless, doing so will fail the companies we serve.
It’s time for fresh and broader thinking in the boardroom. Here are five steps to consider.
Recognize that employees may need different support. If you employ lower-skill workers, immigration issues and cutbacks in Medicaid and nutritional support spending that help ill, aging parents and children will have implications for them and thus your business. Stress levels are already high, especially among young talent facing fewer post-college entry jobs and AI risks to the roles they serve.
Survey your employees to understand their emerging needs. How can your benefits help? What about training needs? Would a course on discerning truth from social media bubbles and biased media be of value to your workforce in this time of unprecedented change so they have a better view of reality?
Think through new scenarios based on different potential futures depending on what federal actions take root. Here are some ongoing or imminent changes that are likely to affect businesses and their employees.
- Climate change actions may halt at a federal level, but the impact of climate change will still be felt throughout the globe.
- There will be less regulation across all federal agencies.
- Federal research investments are falling, and some knowledge workers are leaving the nation.
- Lightly regulated AI is opening new opportunities in the sciences.
- Supply chains must become more agile. Redundancy has a cost.
- More will be demanded of local and state resources as federal resources are cut for issues such as disasters and health care.
- Changes in DEI policies create new risks and opportunities.
Thinking about these factors, it’s easy to come up with both negative and positive scenarios that a board should think through. Here are two examples.
- Negative scenario: Higher tariffs, retaliatory tariffs and greater debt because of tax cuts strangle the economy and impede growth. In a nation of lower living standards, as the United Kingdom experienced, markets change. The low-skill labor supply plummets. Natural disasters and epidemics are harder to manage following government agencies’ reduced resourcing.
- Positive scenario: Lightly regulated use of AI opens new opportunities for efficiency gains and, therefore, new investment funds. AI creates brand new industries, just as the Internet did. Less regulation makes it easier to invest, grow and do business. Today’s workforce is more digitally enabled, with generation gaps no longer creating workplace issues.
Imagine a plethora of adverse and positive changes. Then, delineate the potential significant financial risks and opportunities to your company in the worst and best cases. What can you do today to protect financial sustainability?
Decide when to speak out versus comply with specific government policies and actions. Identify the core values central to your brand that demand you speak out, lest employees and customers doubt your truthfulness about and commitment to core values.
For example, a construction company might protest OSHA cutbacks that prompt a race to the bottom in safety investments on construction sites.
A shareholder petitioned pharmaceutical giant Merck to eliminate DEI milestones in its executive compensation plan. Rather than remain silent, the board chair commented on record, saying “Our company has a long-standing commitment to diversity and inclusion. It’s at the core of who we are, our values and how we operate as a company.” The board unanimously recommended that shareholders vote against the proxy.
Speaking out can feel scary, but silence has its own cost. What do employees, customers and community want you to speak out on? What do you want your company’s reputation to be in five years?
Seek community and connection locally and in your industry association. Voices are always stronger when not deemed anecdotal. Join others to meet with your governor and representatives on state tax and spending policies as federal policy changes. Visit U.S. and state representatives and senators with peers from your district. Higher state taxes to build disaster prevention and response resources will hurt profits in the short term. But they may be wise investments for the safety of your workforce and physical assets. Recognize that long-term self-interest may demand that community interest come first and foremost in our turbulent times.
While board members have not historically been involved with industry association lobbying efforts, it may be time for that pattern to change. Consider getting involved.
Decide what your company, as a good corporate citizen, must do. PepsiCo has revised its environmental goals as the assumed support from the federal government on climate change advances will no longer exist. However, the company is holding firm to its commitment. What goals do you retain or revise? What company policies do you change as foreign corruption, Federal Election Commission and other regulatory areas change?
Five Actions for Individual Board Members
For boards to act differently, its members must prepare differently. Here are five actions you as an individual board member can take so you can contribute to agility rather than stagnation.
- Seek out new sources of information. Read an online newspaper you haven’t read before. Listen to different TV or radio channels. Connect with non-like-minded peers. Discuss to learn versus debate. Otherwise, we stay in our narrow bubbles and cannot do the envisioning and foretelling work our boards need from us.
- Step back and look at the larger picture of actions through time to better understand what is and is not happening. Otherwise, it’s easy to look at actions on a specific topic or day and not capture the scope creep of what is happening around us. Where are we headed if the pattern of the last five to six months continues?
- Pay attention to specific issues lost in the mass of announcements and changes. So much is being thrown at us that it is hard to discern what is essential. Pick a few issues that you know you want to track so you can be a more-informed contributor to board discussions. For example, the proposed “One Big Beautiful Bill Act” addresses states’ role in regulating AI for consumer and business protection. If AI and protection of intellectual property (IP) is important to your company, you should seek out news about AI policy. And, as a board member, ask to have an agenda item for discussion of how proposed regulations affect your company and its IP. What would your company need to do to protect its IP?
- Decide as an individual what it means to be a good citizen. Not speaking out to our representatives in Congress means we agree. That is wise if their votes are ones we support. But make that decision consciously.
- Build greater trust with fellow board members through social meetings and open discussions. Planning is next to impossible in highly uncertain times. Nimbleness in the moment is called for. To react quickly, boards must have high levels of trust to act decisively.
More than any time in our business careers, federal government actions are having and will continue to have profound impacts on the economy and likely our businesses in the years to come. As scary as it may feel, aren’t boards obligated to contemplate the most significant changes facing their organizations?