Seymour Burchman and Blair Jones are Managing Directors at Semler Brossy Consulting Group. This post is based on their Semler Brossy memorandum.
Boards have a lot on their plate right now. Even before Covid-19, institutional investors were challenging directors to consider stakeholders beyond investors. Now, even as directors are busy with the pandemic, investors want boards to promote a more agile, mission-driven executive team. They want leaders ready to handle the expanding complexities of corporate life with distributed decision-making, to respond to a rapidly changing business environment.
Of course, companies have always been complex entities requiring talented leadership. But success in the past depended first and foremost on financial metrics—and boosting total shareholder returns. Corporate governance reflected this priority, shown most clearly in the performance-based compensation programs for executives. Now success increasingly involves multiple dimensions.
Three Trends Shaking Up Corporate Leadership
First, more and more industries are threatened with disruption through digital technology, a challenge to be met only with strategic investments over several years. In most industries, especially with digital technology, the pandemic has now intensified the disruption. Traditional three-year planning horizons aren’t enough to meet this challenge.