After an arduous 2020, many boards have been able to turn their focus from crisis management to recovery. Governance questions now involve worker safety; whether employees need to be on site to be productive; how to strengthen supply chains; and what diversity, equity and inclusion mean for the enterprise.
At the Private Company Governance Summit 2021 (PCGS), Carey Oven, national managing partner of Deloitte LLP’s Center for Board Effectiveness, outlined seven categories that call for deep consideration as the world acclimates to the “next normal.”
- Strategy. Defining the transformation journey and ambition
- Growth. Driving customer focus, product innovation, and revenue growth
- Operations. Transforming and modernizing operations
- Technology. Accelerating digital transformation
- Workforce. Transforming the work, workforce and workplace
- Capital. Optimizing working capital, capital structure and business portfolio
- Society. Stewarding environmental and social resources
These are the qualities of a resilient company, and with them boards can deal with cybersecurity, human capital, workplace transformation and more. A focus on the seven categories — and how risk management fits into every one of them — were front and center at PCGS 2021.
“Private companies, frankly, have the ability to lead the way on all of these themes,” Oven says. “And these themes are going to be important, not only now, but in the future. The challenge will be to maintain focus on these elements of resiliency and accelerate momentum as we embrace the next normal.”
In addition to lessons on how good governance can guide companies through crisis, another theme surfaced among nearly all of the PCGS sessions: Directors need to ask questions, even “dumb ones.” Jeh Johnson, former Secretary of the Department of Homeland Security and an experienced director, and Christie Hefner, chair of Hatchbeauty Brands and former chair of Playboy Enterprises, are just two who say that challenging questions lead to board success.
“Challenging but respectful questions are exactly what leads to robust discussion and best decision making,” Hefner says.
Hefner is a rare woman in the chairman’s seat at a private company. Meghan Juday, chair of her family’s business, IDEAL Industries, led a panel discussion with two other board chairs on the fresh perspective women bring into the boardroom. Juday has founded a peer organization of women board chairs, and while she expected just a handful of members, the group is now 31 strong.
Other sessions included those on risk management, the CEO/board relationship, assessing board needs and the future of board service. What follows are key takeaways from these sessions.