Why boards now need to put long-term focus on employee welfare
The role of the board has changed a lot in recent times. After years of bad publicity over corporate governance, traditional supervisory boards with little external accountability have given way to new entities that set values, create standards, and are more responsible for strategic direction than they used to be.
As part of this increased remit, boards are also expected to balance the commercial needs of businesses while simultaneously ensuring they act responsibly towards employees.
The question now – in the light of recent events – is whether this focus on people is currently going far enough?
Where we are now
Even before the Covid-19 crisis hit in early 2020, the trend towards board oversight over workforce issues was already growing. EY said as much in a report on board priorities, authored in 2019:
“Boards should look to oversee the company’s strategy for workforce agility and related cultural initiatives to address broad impacts on business and the workforce, plan for change and future skills, diagnose and realize diverse workforce potential, and drive leadership development and adaptability”.
Since the Covid-19 outbreak, the focus has shifted even more in this direction. There is now a growing interest in how companies care for and safeguard people on a more personal and emotional level. It’s become about wellbeing as well as productivity and potential.
This is not surprising. More than ever, organisations need to consider the mental health and wellbeing of their staff. Many people have had to work on the front line and have experienced emotional stress. Others live in fear of losing their jobs. The long-term effects of remote working on a mass scale – with lines between home and family blurring – are not yet known.
Boards have a responsibility to take account of all these factors – not just for the sake of employees, but also for the long-term health of the organisations they oversee. Businesses simply can’t operate properly with a dysfunctional, worried workforce.
What boards need to do
These converging factors mean that boards now need to take certain actions to make people a priority. As a minimum, they need to:
- Put more focus on people by considering their emotional wellbeing, not just their productivity, and how they align with company values.
- Formalise this focus by insisting that their organisations take regular workforce pulse surveys as part of regular HR-focused performance reviews.
- Think about how they can assess current skills within the organisation, whether those skills fit current challenges, and whether different skills will be needed for the future.
- Make sure succession plans are in place to recruit replacements and new staff where necessary.
- Ensure that all measures have been taken, in conjunction with the HR team, to ensure that employees can work in an environment with a long-term plan to keep them happy and fulfilled.
- Review technology that is already in place, or will be needed in the future, to support people as they work more remotely.
Why these actions are also important for long term success
The common factor in all these points is that they are not just valid for the here and now. They represent a good practice that will put boards in a good position to keep a tight grip on employee and leadership issues as we move forward into the future.
That future – according to most predictions – is going to be characterised by permanent changes to the way we all work, prolonged period of economic uncertainty, and possible further large-scale disruptions caused by social and geopolitical upheavals.
Not so long ago, most organisations would have said that their primary concern at all times was the customer. As we move forward into the ‘new normal’, boards will need to help their organisations understand that the satisfaction and wellbeing of employees is just as important.
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