DAC Beachcroft recently held a round table with in-house legal leaders from a wide range of sectors. The group came together to discuss the findings of the “Board of the Future” report that DACB collaborated on with The In-House Lawyer earlier in the year, which considered how board priorities had changed throughout the period of the pandemic. Key findings included that: digital transformation had been a priority pre COVID and is even more so now; employee well-being has risen considerably in importance; environmental considerations had been low before COVID and have only slightly increased in significance. The areas below summarise the discussion and provide a view on evolving imperatives.
Ben Daniels, DACB partner and board member commented, “New legal and ethical considerations are arising from societal, regulatory and technological change. Whether as a board member, company secretary or senior leader; in-house counsel have a critical role to play in helping boards understand the legal risks of the choices they face as they respond to new and different considerations. As we emerge from the pandemic, it seems necessary for the sense of urgency that has been applied to digital transformation to now be applied to ESG concerns.”
On meeting in a virtual world
- Build in time for informal catch-ups before the start of a board meeting.
- One Chair advises that no on-screen presentations be permitted so that visual contact can be maintained throughout a meeting (papers can always be on display through a second screen).
- Virtual has meant more “stage management” of meetings, with less spontaneity.
- Useful to have a technician on call for problems with connectivity.
- Costs taken out – no food, hotels, travel.
- Interviewing new board members on-line has been a learning experience, but it has widened the pool of potential NED candidates, with travel and travelling time less of an issue.
- All attendees of board meetings being on-line has been an inclusive way to involve international members.
- Hybrid models beginning to emerge, with a need to find supportive hosting platforms.
- It seems likely that we will continue to make critical, strategic decisions in a virtual or hybrid world for some time to come.
On digital transformation
- Agreement that it was a priority pre COVID and an even greater priority now.
- COVID has accelerated the digital journey, as it has with many other issues.
- Critical for the board to support digital change and lead from the top, underling the enterprise wide nature of the activity.
- This support is probably more important than having members with an IT background.
- However, some members are playing catch up with digital discussions.
- Agreement that there had been an increase in cyber attacks over the COVID period.
- Increased regulator focus on business continuity and security.
- Scenario planning to test capability of response and recovery to attack.
Employee well being
- Agreement that this has been and will continue to be a priority.
- The importance of informal meetings and networks recognised, but they have been weakened throughout COVID.
- The third lockdown has challenged well-being, possibly more than the first two. A need to recognise that people are under pressure and perhaps not operating at their best.
- An opportunity for NEDs to become more connected with the wider firm through digital events.
- Regular “culture” surveys to take temperature of colleague sentiment and comparative data beginning to emerge.
Environmental, social, governance
- The need/desire for greater community engagement and support is writ large, as the pandemic has further exposed societal inequalities.
- Many business are more mindful that there is more they can do to support disadvantaged areas of society.
- Access to the professions has become more limited; the virtual work experience is very challenging.
- More mentoring and tutoring for schools and school leavers as a compensatory activity, with successful on-line engagement.
- An increased focus on pro bono has also proved to be a useful way to support the community.
- A need to explore what is community in a world that is less geographically focused.
- Agreement that environment, net carbon zero should have greater focus. A need for more formal policies to improve action.
- ESG reporting rising up the agenda; ESG Committees being formed.
- A rising interest in “green” investment and ESG responsible lending.
- A need to explore how reductions in carbon emissions through less travel during the pandemic can be maintained.
- Engagement beyond shareholders has considerably ramped up.
- Digital has supported the extension of more frequent engagement during COVID. A need to maintain this.
