Responsible Corporate Board Building – 3 Big Trends in 2021

With so many unknowns in the Colorado business environment, many investors are looking for assurance that company culture is prioritized and can withstand change in 2021. The challenge of board building is enormous, and most companies are unsure of where to start.  

A board is only as good as its members, and high-quality members are surprisingly hard to find. A study conducted by the Harvard Business Review found that 81 percent of survey respondents reported that it has become increasingly challenging to engage qualified directors. Close to 40 percent reported their boards  did not have efficient means for picking new members. 

Boards need to have policies in place for how new board members will be recruited and what their requirements will be. A business lawyer is a valuable resource in creating and implementing these policies. When creating them, boards should focus on these three big trends for responsible corporate board building for 2021: transparency and accountability, diversity, and productivity.  

Transparency and Accountability

Corporate boards must have accountability and transparency. Not only do they need to be accountable for their decisions, but they also must have adequate systems in place to ensure adherence to every applicable law, regulation, and standard. Effective leaders will also be accountable and welcome input from their stakeholders. 

Boards must have clearly defined roles, responsibilities, and policies in place for making decisions. They can show transparency and accountability by: 

• Reviewing and sharing financials: Today‘s companies are placing a direct link to their financial statements on their websites. This way, their financial information is easily accessible to stakeholders, treasurers, and other parties who have a need for this information.
• Conducting annual evaluations: There should be a committee that annually evaluates the CEO or executive director. Additionally, their yearly duties should include self-evaluations on each director and the board as a whole.
• Training board members in their roles and responsibilities: The board should let their stakeholders know that board members go through orientation and receive ongoing training in their responsibilities. It‘s imperative that training includes current and developing industry regulations.
• Having a reputation for addressing issues head-on: When it comes to transparency, policies are the board‘s best friend. Both for-profit and nonprofit entities should have written policies for whistleblowers, conflicts of interest, sexual harassment, complaints, board-approved compensation for an executive director or CEO, and media.

Diversity in Hiring and Retention Strategies

For optimum impact on the individual experience, creative output, corporate culture, and bottom lines, diversity of thought must be supported at the executive level and demonstrated through inclusive strategies. Diversity and inclusion training should be a requirement of the board as well as company wide. Companies should also: 

• Be aware of and reduce any unconscious biases in creating barriers for underrepresented groups.
• Use diversity statements in job postings.
• Use social media platforms to reach out to underrepresented groups.
• Participate in school or community job fairs in locations that have diverse representation.
• Distinguish critical attributes that reflect your redefined corporate culture.
• Establish a blind application system that concentrates on skills sets.

“If you do not intentionally include, you unintentionally exclude.“
—Ekaterina Walter, Forbes

Productivity Monitoring

Even before the COVID-19 pandemic forced employees to set up home offices, many companies were already beginning to monitor productivity. With so many people working from home now, productivity monitoring is on a fast track. However, suppose a business determines that it should monitor its employees for any reason. In that case,  it is crucial to do it in a way that maximally respects its employees. When considering productivity monitoring, companies should: 

• Choose metrics meticulously by involving all appropriate stakeholders.
• Be transparent with its employees about what will be monitored and why.
• Consider monitoring as a tool to help employees increase their productivity and reward them.
• Understand that even dedicated workers will not always be dedicated to working all the time — especially under current circumstances.
• Monitor its systems, ensuring that people of color and other vulnerable groups are not disproportionately affected.
• Reduce monitoring when and where it can.

How a Business Attorney Can Help with Board Building

Every business leader must prioritize these three elements for board building in 2021. They must be accountable and transparent to the entire board, themselves, the corporation, and the public. Diversity and inclusion need to be prioritized when it comes to company culture, hiring and retention practices. Productivity monitoring should be done selectively, with transparency and only when necessary.  

For some corporate boards, each one of these goals can feel like a significant or even impossible task. Creating the internal policies for guiding the corporate board into these areas can be time-consuming and burdensome. A business attorney can help draft policies and set standards for accountability from the top down. By working with an experienced business lawyer from Hackstaff, Snow, Atkinson & Griess, LLC LLC, you can ensure that you are setting your board up for success in 2021.