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Virtual board meetings offer basic benefits like no travel and potentially better attendance and a recent Harvard Business Review article says some fast-adapting companies have found virtual board meetings are better than the real thing.  Other benefits mentioned in the article include improved governance and collaboration through shorter agendas, crisper presentations and broader exposure to key executives and outside experts.

The article quotes several board members providing positive feedback and cites Spencer Stuart’s North American CEO practice leader, Jim Citrin, as saying several CEOs have told him ‘they’re not going back to the way it was.’  Citrin also predicts most companies will move to a single physical meeting and a series of online sessions throughout the year.  The article lists 8 tips to prepare for and get the most out of the next virtual board meeting, here’s a few:

– Shorten and energize the agenda – consider building the agenda in 15-minute increments to help avoid virtual meeting fatigue

– Spread sessions over a week or two – instead of holding a 3-day strategy session, one company held a 1 to 2-hour session a week for 4 weeks resulting in more engaged and productive meetings

– Use breakout rooms productively – if possible, keep the groups to no more than 3 participants and keep discussions to no more than 10 to 30 minutes then reconvene the board as a group to hear the report-outs

– Build in “candor breaks” – consider including short candor breaks on the agenda and ask what’s not being said

Investor Group Calls for Worker Protections During Covid-19

Not too long ago, I blogged about investors calling for mandated Covid-19 related disclosure requirements.  Although Corp Fin appeared to address some of the requested disclosures in its most recent Covid-19 guidance, this recent blog entry cites activist investors as saying the latest guidance falls short:

Activist investors plan to continue pushing the SEC for stronger disclosure requirements from public companies about COVID-19-related business risks and worker protection programs.

One such investor said ‘the pandemic has exposed a wide range of risks faced by businesses that are financially material to investors, including, but not limited to, employee health and safety, access to paid leave, access to health care, supply chain management, worker engagement, political lobbying, and executive compensation.  Unfortunately, the existing SEC guidance is not sufficient to ensure that investors have access to material information to properly assess whether companies are adequately confronting the risks.’

Separately, a blog post from a human rights advocacy organization says that 118 investors, representing $2.3 trillion in assets under management and led by the Interfaith Center on Corporate Responsibility, recently released a statement directed to meat processing companies calling for increased worker protections due to Covid-19.  Here’s an excerpt:

While we are acutely aware that the COVID-19 pandemic creates unprecedented economic challenges for businesses around the globe, companies have a responsibility to implement enhanced protections to protect workers fulfilling corporate operations and those in their supply chains. The pandemic exposes meat processing companies to reputational, legal and financial risks that may significantly disrupt operations if COVID-19 outbreaks in plants continue.

The letter acknowledges that several companies have implemented some enhanced safety measures, health protocols and worker benefits but they want to ensure companies implement safeguards across all facilities and operations.  The letter urges companies, for the long-term sustainability of their operations and the health and safety of their employees, to comply fully and in a manner that provides the greatest protection for workers.

The blog post says some of the targeted companies have responded and includes links to those responses.

Taking Cues from Pandemic Response to Prepare for Future Outlier Events

A recent study out of the Rock Center for Corporate Governance at Stanford University reviewed Covid-19 disclosure practices in SEC filings for the period between January 1 and May 29, 2020.  The study shows how, over time, the focus of Covid-19 disclosures shifted from supply-chain impacts in the early months to disclaimers to forward-looking statements and disclosure on cash positions as fears about liquidity and solvency increased.  Given the trajectory of the pandemic, the exponential growth in disclosures isn’t all that surprising.  Understanding the pandemic is out of the ordinary, here’s what the study suggests we can take from analyzing the related disclosure practices:

The COVID-19 pandemic provides a unique opportunity to examine disclosure practices of companies relative to peers in real time about a somewhat unprecedented shock that impacted practically every publicly listed company in the U.S. We see that decisions varied considerably about whether to make disclosure and, if so, what and how much to say about the pandemic’s impact on operations, finances, and future.

The study examines competitor companies within the beverage, apparel, airline and big box sectors where it found vast differences in frequency of disclosures.  Noting the differences in company disclosure practices, the study suggests boards might use insights from a company’s pandemic response to prepare for other possible outlier events such as climate events, terrorism, cyber-attacks and other emergencies while also considering whether to share these insights with shareholders.

– Lynn Jokela