People in a New Paradigm

The summer months lend themselves well for time for reflection and perhaps this summer more than ever. While many of us are looking at the pandemic through the rear-view mirror, boards are bringing key reflections forward to the road ahead of them. And many of those, with no surprise, focus on who is most deeply affected and creates vital value to an organization: its people.

Pre-pandemic, the board’s role was already in a state of evolution. There was increased awareness of people-related risks (e.g., workplace culture, ethics, attracting talent), and more attention to diversity, equity, and inclusion (DEI). There were evolving HR committee mandates to better reflect consideration of human capital, people, and culture. We saw an increased demand for HR skills in director searches and board skills matrices. And boards were looking for increased reporting on people dashboards and strategies.

With an almost overnight change to the workplace and a universal pandemic-spurred strain, the spotlight veered decidedly to the people. We see increased worry about retention, talent shortages, and now economic disruption. Leadership and employee fatigue are ongoing concerns, coupled with higher scrutiny on how employers support workers’ health, livelihoods, and dignity.

We’ve witnessed resilience, adaptability, innovation and, in equal doses, strain on relationships, fatigue, and the struggle for work/life balance with blurred lines between the office and living room. What we now know is, the board’s role in the oversight of human capital and organizational culture has never been more critical.

There is organizational impact by and on people at every level. And while some solutions are simpler to tackle, boards need to be attuned to them all. Consider these:

• Shifts in business models and an increased emphasis on the link between people, leadership and culture, and an organization’s ability to compete and succeed
• Exposure and amplification of stories such as unsafe workplaces, sexual harassment, modern slavery, poor labour practices, inequitable workplace policies, etc.
• Shifting priorities in some demographics, with talented workers prioritizing and demanding healthy culture, growth experiences, wellness, and balance; perhaps more than in the past
• Increased expectations for CEOs and organizations to make public their views on issues of social justice, with potential backlash if coming across as inauthentic
• Investor, funder, and other support expectations in terms of ESG, purpose, and DEI
• Global demographic forecasts that predict skills and talent shortages, and intense competition to address them

And the worker-employer relationship has been put to the test, too. We are seeing a relationship that is fundamentally changed, and still evolving.

So, what should boards be doing to keep pace?

• Keep your eyes open. Build your board’s awareness and increase directors’ understanding of the workforce challenges executives/management teams face in a post-pandemic world, as well as the longer-term trends requiring increased attention.
• Stock your toolkit. Ensure the board and management have the skills, practices and focus to navigate these people-related shifts, challenges, risks, and opportunities.
• Ask the right questions. Be a sounding board for management and support management to think strategically (short, medium, and longer-term) about people, culture, and leadership.
• Get (and use) the data. People issues can feel difficult to quantify, but you must establish metrics to measure progress on people-related initiatives and monitor risks.
• Seek out new voices. Recruit board members with diverse lived experience and fresh perspectives. This might involve looking beyond your usual networks – a search firm can help.

If you’re unsure where your organization stands on people-related issues impacting businesses, consider taking dedicated time for your board to answer these thought-starter questions:

1. Are we skilled, organized, resourced, and prepared as a board to address these complex short, medium, and long-term people and culture issues?
2. How are labour market developments impacting our organization? How do they intersect with evolving technology and other forces?
3. What are our retention risks? And more importantly, which roles and talent are mission-critical and need additional focus? What succession plans do we have in place, and which succession processes do we use?
4. Are people burned out and disengaged? And what implications does this have (e.g., productivity, strain on management, fracturing of culture)?
5. How will we meet expectations as a workplace over the next couple of years, assuming we will continue to face disruption?
   • Flexible work hours? Flexible work locations? Work from anywhere?
   • How do we show appreciation?
   • How will we reinforce culture and values?
   • How do we ensure standards and practices are being followed?
   • What do health, safety and wellness look like in a hybrid work model?
   • Are we evolving workplace policies?
   • What do we offer as total compensation, including non-monetary compensation?
6. Do we have our house in order with respect to DEI? Have we assessed ourselves and identified where and how we can strengthen?
7. Are we taking care of leaders? Are our expectations of them evolving? Do we have a plan and process for how we will ensure leadership resilience and succession?

If the pandemic has highlighted anything, it’s that when it comes down to it, we’re all just people, in this together, navigating our way through changing and tumultuous times. These issues are here now, and they’re not going anywhere.

We know it’s a lot to tackle and if a trusted advisor in your corner is what you need, WATSON is here to help.