At the start of the pandemic, Debra Everitt McCormack was fielding calls from desperate board members about joining their video conference calls.
“One of them texted me right away and said, ‘Debbie, I need your help with this Zoom thing,’ because they’ve never used it before,” says Everitt McCormack, global lead for effectiveness and sustainability at Accenture. “Traditionally, they used a phone, so when they had a meeting that wasn’t in person, that meant it was through a conference call, not through a video call. And so the transition to video calls was not easy.”
Two years later, we still forget to silence ourselves. But the board members have at least largely moved away from their camera shots into the phase of perfectly staged video backgrounds without the mishaps of stuck cat-face filters.
In many ways, the pandemic accelerated the adoption of technology for many modern boards, but it’s an issue that has been in play long before “COVID” entered the vernacular, and it’s a space many boards are still tackling.
Everitt McCormack co-wrote an article in 2019 on how boards needed to implement technology. These days, she says, there are three things a board needs to consider: whether board members have the necessary skills to use that technology; how are they addressing risks like cyber risks with that technology; and how board members are being educated on new technologies.
“It’s imperative that organizations … are demystifying the technology that’s being used and the challenges associated with that,” she says.
Manage meetings better
Before there was Zoom, there were software companies like OnBoard. Launched in 2003, the platform was intended to help boards run more effective meetings. Since the pandemic began, business has been booming.
“While the world was upside down in 2020, we were seeing the exact opposite,” says OnBoard CEO Paroon Chadha. “While it was difficult to hire the right people and expand quickly, we nearly tripled the size of the company in the last two and a half years.”
Chadha explains that the software helps board members coordinate outside meetings for a more efficient meeting when the time comes.
“There is a board meeting that I often have in mind before the meeting; there’s the board meeting I ended up having; and then a week later I realize there’s a meeting I should have had,” she says. “Our goal is to help committees have the meetings they should have had the first time.”
The platform allows users to share meeting agendas and minutes and even has ways to track time spent on each item to prevent meetings from running out. The technology is relatively easy to use, says Chadha, and most companies have internal systems to train their board members. Those who use the software report receiving their planners three days earlier than in the past, on average.
“Because of COVID, people are more comfortable sharing information digitally, and because information is easier to share, board books have grown in size,” he says. Chadha believes that the pandemic has spurred this technology adoption.
“That will be the lasting legacy of COVID,” he said. “And because we are digital, this will, in a very significant way, give us the opportunity to be more diverse and inclusive.”
A level playing field
Everitt McCormack points to two statistics from Spencer Stuart in her Board Governance Trends report, showing how board members are using technology today. The first showed that as of 2021, the average age of an independent director was 63.
“People that age didn’t start their careers using a lot of technology,” says Everitt McCormack. The same report showed that only 15% of new independent directors had a tech background. “If the other 85% weren’t on video conference calls in the past and had to be now, it would be like those board members calling and saying, ‘I need help with this.'”
As more boards embrace technology, there could be an opportunity for others with inherent tech skills, perhaps younger employees in general, to step up and fill the void.
But as both Everitt McCormack and Chadha point out, board turnover is low and slow. Somehow, perhaps indirectly, software like OnBoard can level the playing field for emerging board leaders to step into the ring. According to Spencer Stuart, board turnover sits at a rate of just 8% per year as of 2021.
Chadha notes that platforms like hers remove some of the barriers for board members who might otherwise be easily overlooked and interrupted. It doesn’t matter if you’re sitting at the head of the table or in a corner with only room to stand.
“That’s not a problem anymore because on Zoom, three people can’t talk because then no one can listen,” he says. “No matter where you sit, we are all in the same digital and virtual room now.”
Chadha says this aspect of her platform can help, as boards looking to increase diversity consider a candidate’s skills more than their C-level experience.
“First of all, you’re tapping on a very undiverse group, when you’re really bringing people up from C level,” he says. “You’re going to have to get out or you’re going to have to get something out of this talent.”
Technology has helped boards themselves map out their goals in more meaningful ways, which has been especially helpful as Fortune 500 companies focus on their environmental, social, and governance (ESG) milestones.
When American Electric Power (AEP) leaders learned about software called Datamaran, they saw it as a way to gain a broader view of the ESG landscape as they made better-informed decisions about their own goals.
“Datamaran gave us the worldview we needed to understand emerging issues and trends, including new regulations in the works that could directly or indirectly affect AEP,” said Sandy Nessing, AEP’s vice president and chief sustainability officer.
Nessing said the platform helps AEP monitor its ESG goals in real time and helps predict how national politics, consumer habits, natural disasters and the like will play a role in its results. Since it began using the platform, AEP has developed a human rights policy.
“Before, it was thought that human rights were a problem that only occurred in distant underdeveloped countries. So why did it show up as an emerging issue for AEP? Nessing says that adding AEP’s ESG social scores and risk ratings improved after implementation. “A combination of data, benchmarking and other research, including our own policies, showed us why it was worth addressing human rights directly. Ultimately, we developed a human rights policy that builds on the practices, policies and legal obligations that we already had.”
Marjella Lecourt-Alma, CEO and co-founder of Datamaran, says the platform helps companies anticipate how global events will affect them.
“The software doesn’t replace the act of making the decision, but it helps them have the information they need to confidently move in a certain direction,” he says. “And that is what our clients like, that they have that foresight and can anticipate what is becoming increasingly relevant; that they can review [where] your competitors are in “.
Datamaran also analyzes publicly available sources to provide clients with a look at competitors and how they are tracking and meeting ESG goals. While many companies were quick to set ESG goals and metrics, they did not take the time to comprehensively track and monitor the data. That’s where Datamaran can help, by eliminating the need for every customer to be a data scientist, says Lecourt-Alma.
“They’re hitting the gas while hitting the brakes,” she says. “They know they need to do something, but they need to understand it better.”
In short, Everitt McCormack says the most successful boards will be able to leverage technology on offense.
“When technology-driven disruptions happen, like the pandemic, companies need board members who understand the challenge and can see around the corner to be proactive, not reactive,” she says. “That’s what’s going to help companies with regards to their technology, cyber, sustainability and ESG going forward.”