How The Pandemic Is Shaking Up Board Meetings For Ever

Amid all the talk of the pandemic setting organizations of all sorts on a crash course in digital transformation, there has been little discussion of how corporate boards have operated in the past 18 months. The truth is that, while some non-executive directors — especially those no longer in the corporate world with all the technological back-up available — might have struggled to master Zoom calls and the like, boardroom behavior seems to have pretty much mirrored what has gone on elsewhere.

According to a paper produced by the Harvard Law School’s Forum on Corporate Governance, the shift to virtual working, at least some of the time and for some activities, just as in the world in general, is likely to be permanent. “This increased adoption could show up first in committee meetings in the near term, but long term, it has the potential for increasing adoption for full-board meetings as directors become more comfortable with the technology,” it says.

Meanwhile, an article in the Harvard Business Review last year highlighted the benefits of a shift to virtual board meetings. Authors Keith Ferrazzi and Sarah Zapp, who are both involved in the selection and coaching of board members, point out that, aside from the obvious benefits of reducing the need for travel and a resulting increased likelihood of better attendance, shifting to virtual has allowed boards to improve governance and collaboration through shorter agendas, crisper presentations, more inclusive and bolder conversations and broader exposure to key executives and outside experts. 

This certainly seems to have been the experience of Carol Chesney, a U.K.-based non-executive director on the boards of a number of companies. While saying that most of her colleagues were embracing the new way of working because they could see the benefits, there was initial concern about how the hiring of new directors would work, given that face-to-face meetings had normally helped to ensure that they were right for the role through — as she put it — “seeing the whites of their eyes.” However, confidence grew as chairmen met the candidates in person where possible and reported back to board members, who then were able to talk to them online. “We’re making strong appointments,” she said.

The practicalities of recruiting new board members have obviously been at the forefront of the mind of Andy Davies, senior partner at global executive search firm Kingsley Gate. Davies, who leads the UK board practice, agreed that the hiring process had “stood up pretty well” and that “the right people were getting the job.” But he cautioned that it was a more of a challenge helping people once hired to settle into their roles. The three to six-month induction periods that enabled new hires to visit executives and learn about the business were obviously not able to operate as before. 

Both Chesney and Davies stress that a lot will depend on the type of company. Davies, for example, points out that in a manufacturing company, where it is more difficult even for executives to work from home, there will be pressure for in-person board meetings to resume. On the other hand, companies that operate internationally may — as Chesney says — have already been holding some meetings virtually. And both agree that the possibility of not having to attend all meetings in person might make it easier to attract people to the role who might otherwise be pressed for time or not want to travel so much.

Other benefits include being able to invite star guests who might normally be prepared to travel, particularly if the organisation is relatively small, and also involving presentations from executives who might not normally attend board meetings.

Because of the perception that people who join in-person meetings remotely appear as “second-class citizens” there is a general consensus that it is better for either everybody to attend in person or nobody. This might then lead to board meetings being split between virtual and face-to-face over the course of the year. As is always the case, much will depend on the person chairing the board, who must ensure that all have a say and that nuances are picked up. In particular, efforts must be made to replicate the relationship building that is fostered by the dinners that generally precede in-person board meetings and the informal chats between sessions.

Ferrazzi and Zapp offer a series of recommendations of best practice for virtual board meetings. The policies include emphasizing that directors prepare well for the meetings, shortening the agendas and making them more lively, spreading sessions over a week or two, building trust, making productive use of break-out rooms and building in breaks where directors can discuss matters candidly.