Company boards and senior leadership are having to pay much more attention to external developments – social and political, local, and global. Driven by employees, investors, customers, interest groups, and other stakeholders, as well as their own corporate values, companies are increasingly at the intersection of politics, business, and culture. Expectations are rising for companies to take positions on or respond to these issues. How should companies respond? How do companies reconcile differing viewpoints? How do companies respond to a senior executive’s divisive statement or action unrelated to the company’s business? What are the Board’s fiduciary duties?
The discussion of this evolving governance challenge will focus on the respective roles of the Board, the CEO and senior management as they navigate the complex political and social environment. The panel will:
- provide historical context
- offer recommendations for appropriate Board oversight of company preparation and activities
- suggest questions that directors and management should ask as they assess the pros/cons of taking positions
- suggest ways to handle situations where the company’s position, or a director’s or executive’s personal views do not align with company values, statements, or disclosures
- suggest potential disclosure implications of company activities\
- examine Boards’ and Directors’ fiduciary duties under Delaware law
- examine other legal obligations which might come into play.
This Weinberg Center panel provided participants with useful insights and practical takeaways, including approaches to policies and processes that Boards and management can employ when addressing these issues.
The participants were:
- Leslie Seidman, an independent corporate director; member of the board and chair of the audit committees of General Electric Company and Moody’s Corporation; former Chair of Financial Accounting Standards Board (FASB) and Public Governor, Financial Industry Regulatory Authority (FINRA), Moderator
- Michael Pittenger, Partner, Potter Anderson & Corroon LLP
- Hillary Sale, Associate Dean for Strategy, Agnes Williams Sesquicentennial Professor of Leadership and Corporate Governance, Professor of Management, Georgetown University; member of the boards of directors of Cboe U.S. Securities Exchanges, Cboe Futures Exchange, and Cboe SEF; and former Public Governor, Financial Industry Regulatory Authority (FINRA)Associate Dean for Strategy, Agnes Williams Sesquicentennial Professor of Leadership and Corporate Governance, Professor of Management, Georgetown University; former Public Governor, Financial Industry Regulatory Authority (FINRA)
- Paul Washington, Executive Director, Environmental, Social and Governance Center, The Conference Board