Nathaniel Bullard: Boardrooms face climate culture shock
Companies must prepare for a cohort of fresh faces at meetings behind closed doors
My newsfeed — and probably yours too — is chockablock with stories about professional workers returning to their offices. What the pandemic’s grand, unwitting experiment has shown is that the structure of work isn’t just habit, it’s culture.
Work culture varies not by industry, but also by company, and sometimes even by worker. Citigroup and Goldman Sachs, for instance, have their global headquarters a few blocks from each other in Manhattan but are miles apart on their workplace policies — hybrid and report-to-your desk, respectively. Meanwhile, younger professionals are anxious about missing out on skills development and relationship-building, while working parents — having experienced flexibility of time and location — may be less eager to re-engage with their pre-pandemic commutes and intricate schedules.
Just as the work-from-home shock of Covid-19 is forcing companies to reckon with company culture, so too are they increasingly reckoning with how they’ll address climate change. The pandemic could have set climate back on the agenda, but instead, 2020 set records for clean energy deployment, electric vehicle sales, corporate net-zero commitments, and sustainable finance. The global climate is certainly not antifragile, but apparently the business world’s commitments to improve it were.
That said, I think companies are in many ways quite far from being able to engage with the impact their businesses have on the climate — and the impact the climate has on their businesses. Earlier this year, my colleague Tim Quinson highlighted research from Tensie Whelan, a professor at New York University’s Stern School of Business, on how few corporate board members have a background in environmental, social, and/or governance subjects. I read Whelan’s paper again this week specifically for environmental expertise, and the data is pretty grim.
As of April 2018, 5% of the nearly 1,200 board members of Fortune 100 companies had experience with workplace diversity, and 2.6% had experience with accounting oversight. Barely 1% had any experience with energy or conservation, the two highest-ranked categories in Whelan’s study. Three-tenths of a percent of the Fortune 100’s board members had experience with ESG investing; 0.2% had experience with climate.
The recent shake-up of ExxonMobil’s board involving the appointment of two members with climate expertise will change those numbers quite a bit. Then again, the fact that appointing two board members to one company measurably changes the number of climate-qualified board members is a sign of paucity in and of itself.
If it happens, the arrival of climate fluency at the board level will be another culture shift for the world’s corporate giants. That’s a big if, though, because it will almost certainly mean bringing in new board members. They will most likely wind up being younger, more academic, more entrepreneurial, and more experienced with what did and did not work in the last wave of early-stage climate technology than the grandees, semi-retired business leaders, or otherwise noteworthy senior figures that pack today’s boardrooms. That’s going to be a challenge. Boards don’t generally include 40-year-old climate scientists because they don’t generally include many 40 year-olds, period — or many scientists, for that matter.
But if companies are going to make climate a priority, they’ll need to be bold about it. Changing to meet new imperatives — whether driven by the pandemic, technology or climate — starts with changing leadership. Steven Sinofsky, a veteran technology executive and thoughtful observer of its biggest companies, wrote about this last week in the context of the post-pandemic workplace, but the same goes for climate-engaged company. “This is what disruption looks like,” he said. “It happens slowly at first, then very quickly. It seems impossible to imagine a different way to do things, then we’re doing things in a different way. Stay tuned for a whole new way to work.”
If addressing climate change is an imperative, then so too is incorporating it into the highest levels of global business. That means the boardroom. Boards should be ready not just for a whole new way to work, but a whole new cohort to join them at the table.
Bloomberg News. More stories like this are available on bloomberg.com
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