Dambisa Moyo, "How Boards Work"

0:05 this is c-span's afterwards podcast this week Economist dambisa moyo offers an Insider's view on how Corporate boards operate her book is titled how boards work and how they can work better in a chaotic World she's interviewed by Wall Street Journal reporter Emily Glazer thank you so much for joining us Dr dmoo and congratulations on your book how boards work and and how they can work better in a chaotic world you wear a number of thank you you wear a number

0:36 of hats you're a global Economist a corporate board director and of course now and this is not your first book author um you've learned a lot in your more than a decade on different corporate boards across Industries and in many ways this book is a playbook for how boards work how they're evolving and how they can adapt in the future I actually want to go back though to when you were 39 years old that was when you

1:01 joined your first board sa B Miller and your writing on emerging markets and international issues really set you apart from others that had come up through Corporate America how did you learn how to be a good board member so thank you so much for the opportunity to be here and to talk to you about my book how boards work but also to give you a little bit of a an insight into um the challenges as well

1:24 as the opportunities for not just boards but the corporations that they lead um you know your question's interesting because I do worry sometimes that um you know writing this kind of book gives the impression that it was always meant to be it was easy and straightforward and the reality is I'd actually tried for more than um half a decade to get on boards unsuccessfully um and um as you rightly point out that the you know in terms of

1:51 global large complex um organizations my first board was indeed sa Miller and the real opportunity robes um uh you know in many ways surprisingly um because I I am not and I was not a conventional board member uh as you pointed out I was 39 I'm obviously black and a woman um I was born and raised in Africa um but also I did not come through the sea Suite which is a traditional pool um for board

2:20 candidates and you know what really did set me apart as you mentioned is uh really uh coming through a perspective of a much more Global perview um my had uh traveled uh to very fortuitously to over uh 80 countries now around the world and having that perspective of developed versus developing Democratic and versus non-democratic uh economies Etc was was particularly important but you know what have I learned um I think you know there are a number of key

2:49 takeaways that I hope are clear clearly uh outlined in the book um first of all uh you know by the time uh you're on a board the reality is these are very complex organizations the um Board of Barkley's where I served um was a company that's been around for 360 years and if you take a step back and think about the historical context of many of these corporations they've gone through Wars pandemics um you know good times

3:17 and bad but somehow manag to to stay afloat and um for me I think that requires a lot of open-mindedness um good judgment uh in the face of of complex issues in order to steady the sh and really do the job as a fiduciary but also a custodian of these very very important organizations and so listening more than speaking I think is a is a a key takeaway but also really appreciating um by the time something

3:46 appears on the board agenda it means it's extremely difficult um and to quote President Obama if it were easy somebody else would have solved it um and therefore we do need to think about these issues in in their sort of more full some uh and and and more um a sort of broad uh perspective um and not just in a sort of ideological there's only one answer kind of way um so those are some of the things that I've learned

4:11 well your book breaks down a couple of really big issues you know what boards are and how they operate the risks you know for the future and of course a lot of the big issues that are playing out now I want to First Look at uh one point that you made I'm going to read from your book you quote the changing times have made boards more indispensable than ever so how has that changed in the last

4:35 year we're we're in this Global pandemic I would love to hear what this last year and change has meant as a board member yes you know it's been uh phenomenal in in many respects but it's important to put these things I think in context so um in my book I talk about the first board really being uh established or at least recorded in the 1600s and in many ways days um if you look back in history over several

5:02 centuries the fundamental Mandate of the board hasn't really changed much um I would say that traditionally boards have had two responsibilities one is providing oversight on strategy and number two is hiring and in some instances firing uh the CEO um but really over the last half decade even more um there's been a material shift towards the need for corporations to take on a much more um social and cultural responsibilities

5:33 and be good citizens uh if you will and that obviously uh was really a counterforce to Milton fredman's 1970 article in in which he basically planted a flag in the sand uh essentially suggesting that uh the financial Primacy um shareholders and financial Primacy were really the key uh uh sort of attributes or important role that corporations play that Chang big shareholder versus stakeholder Primacy it's like you can't talk about it

6:04 without saying how Milton fredman is maybe not in the modern times that we're in right now well I you know frankly to hold another conversation I mean I do think that he has been U misquoted somewhat I mean he was very clear in that article that you know the nature of how corporations uh you know uh participate in the global economy and in society would very much be driven by social and uh and uh cultural context

6:30 and I think that that gave us enough degrees of freedom to actually uh to think more broadly about uh what the mission and role of corporations are of course in in the 140 character World we've basically uh given the short shrip and blamed him for for the financial Primacy argument um but that changed as as you know in 2019 with the Business Roundtable um essentially uh articulating a very clear uh broader or I should say widening aperture with

6:59 respect to the responsibility of Corporations to incorporate not just Financial shareholders but the whole range of shareholders such as communities employees regulators and Society r large um but you know just to come back to your specific question what does this mean about the changing role there's a whole um sort of proliferation around areas such as uh environmental social and governance uh questions ESG which according to JP Morgan now represent about $ 45 trillion dollar of assets under management so hugely

7:31 important everything from climate change to racial and gender uh justice um concerns about worker advocacy data privacy voter rights gun control I mean it's really opened up a a wide U uh sort of array of of issues um not withstanding the fact that board members are not elected um but at the same time you know I think the last year has reminded us that we don't only have a strategic role thinking about how companies will evolve over time we have

8:03 to um block and tackle in the here and now to be able to adapt to in a more tactical way to when things um go Ary whether it's a pandemic or financial crisis um so you know I you know I won't belabor the point but I I did publish an article on the Harvard Business Review um in around March or April of of 20120 um in which I I basically talk about how uh you know as a board member we were

8:30 initially incredibly concerned about operations are people safe are people able to log into their computers they have access to health care we then start to think about the financial health of the company can this company run um do they have a lot of debt or are they able to cover their you know can they use their cash flows to cover their responsibilities and then you start to think about um you know other considerations such as uh you know the

8:56 the broader Marketplace and and how uh we can step up in a world that's incredibly challenged if you remember with also very little uh information so that's how it's changed I would say from a broader strategic role to a much more tactical uh role and that that to me is part and parcel of being a good board member absolutely and you write about how many people think the buck stops with the CEO but in fact there are all

9:20 these risks that board members take on given you know strategy around the company and operations and you know not having just short-term thinking a big part of board members role as you write is CEO succession and we know now that CEOs and what's expected of them has really expanded quite a bit can you tell us a little bit about how you've been involved in CEO succession in the past and if there are different questions that you're asking these days that fit

9:49 into what's expected of business leadership yes you know the the truth is that um you know I I think it's really important that we all understand that in a sense um corporations are are living organisms they're basically a collection of human beings and human beings change context change uh you know I was reminded very recently by a board colleague um uh from a company I served on a while ago who's in his 80s and he said the only thing I can guarantee you

10:17 in his 8year life is that you're always going to be surprised it be a pandemic be a financial crisis be the rise of China it could be you know any manner of geopolitical risks brexit um you know America first strategy Etc goes on you're always going to be surprised and and I think that that's a very important uh uh frame and thinking about how organizations um run but also about the selection of the CEO traditionally uh you know boards and I I have been

10:47 involved on both hiring and in some instances I'm afraid firing um or s s certainly s all part of the job yes um you know it's it's a it's an it's an unpleasant part of job um but uh it's it's part of the job nevertheless um but you know we've traditionally looked at um a CEO candidates Financial Acumen and their operational experience have they managed teams what's their leadership style how does the their leadership style marry with where a company is if a

11:19 company needs to um you know restructure and reduce costs you know is this a CEO who can lead the charge through a difficult time how do they think about strategic uh opport o unities in an era that might be much more positive and constructive and so that's how we've traditionally approached this and I think there's frankly been a big area missing which is um about probing um the sort of ethical compass and the moral compass of of candidates now uh how do

11:46 we how have we done that we have I we relied uh very heavily on uh on references um but obviously when you're we're living in a world where in just 18 months um over 400 CEOs and Business Leaders lost their jobs because of me too it does sort of uh sort of really bring much more into Stark relief the importance of Ethics um and one of the Articles or the discussions in the book that I I really tried to emphasize is

12:16 that that's a muscle that um organizations are going to have to really strengthen not just for selecting the CEO but also for selecting board members thinking about the organization uh more generally as well the ethical question is going to move us from just thinking about opportunities as is it profitable is it legal into the realm of well wait a second is it also ethical um does this coort with how we want our brand to be seen or the organization to

12:41 be viewed absolutely and you can't just say to someone like are you ethical are you moral it's not as simple as that I believe there was a specific question that you said you like to ask which is um I think it was you know what's the worst thing you've done to someone else am I getting that right am I remembering correctly so it's the question is what's the worst thing you've done to another human being um and you know I actually

13:03 was joking with my my siblings and my friends and saying you know I think this is actually a great date question as well so people should but you know Emily the truth is that these are not um gacha questions there's not necessarily a right or wrong answer and I think that that's really really trying to get at this uh challenge of uh of the complexity of the issues that boards have to deal with we're not looking for a a box tick yes

13:28 this is the right answer it can't possibly be the case that there's a um always a right or wrong answer and in fact because we're operating in different cultures different um you know ideological um societies different jurisdictions legally and Regulatory um it means that we always have to be very open-minded and judicious with our our sort of opinions and and ideologies absolutely um well I will say when I read that question I really took a beat myself and had to think like what

13:57 is the worst thing I've done to another human being and what would I feel comfortable saying like you know is it something when you were 10 years old or what it really makes you think a lot um so another really big part of being a board member is helping to develop company strategy direction and you write a lot about assessing business units and how you need a mix of data analysis Market context and other measures um you

14:20 were cautioned by an external auditor to not fall into a trap when evaluating business units can you tell us a little bit more about that yes this was very early and my board career um it was an external auditor who said you know people tend to be very focused on businesses that that look like they might cause trouble um and he he cautioned me and said you know you should also be as Vigilant in reviewing and assessing the performance of

14:46 businesses that seem to be doing too well um you know we tend to think oh that's brilliant this company or this business unit is doing so wonderfully we don't need to worry about that but actually that's exactly when you should probe you know what kind of a market allows a business to thrive um is this a monopoly what does this mean from a regulatory perspective what does this mean from a competition perspective there are a lot of questions that should

15:10 emerge make sure that you're not doing things that are unethical or of course ille you know illegal or indeed uh sort of you know dare I say it corrupt um and so uh I thought that that's you know tremendously important advice again in a world that's incredibly complex and chaotic the sense that we have a risk of De globalization you know lots of issues with respect to technology and disruption and what that might lead to um I think that it's really important

15:40 for us to be vigilant not just on the downside but also on the on the upside opportunities when we see them indeed I want to take a few moments to talk about some specific instances and anecdotes that you mentioned about your own board experience in the book and how that helped um you learn more from those experiences you mentioned how of course there all these things that you just cannot plan for um and sometimes this you just can't anticipate it so baric

16:05 gold share price you write swung from $7 to $53 while you were on the board wow um what's that like as a director to have that kind of you know fluctuation well it for someone like myself I mean who was relatively new as a as a board member um in general and in corporate governance I mean it's quite traumatic I mean I think people people who this is why you want people who have knowledge and Savvy and have been able

16:33 to navigate companies through challenging times I mean the the thing about Barrett gold in particular is that it's a it's a price taker um you know they are a company that relies on um mining minerals such as gold and copper that are actually not priced by Barrack um they're priced by the market and so you are a price taker there many Global events that can heavily influence uh not just your performance in terms of your operations but also uh the uh the share

17:02 price as it did I mean the good news we shouldn't forget is that baric today is trading above $20 so it bounced back and very good point to to you know to a company uh company's board but also to the company to be able to turn that kind of a challenging environment around indeed and it's not just Market fluctuation you're on the board of Sab Miller going back that's your first time that you joined as a director um when it was

17:28 bought for 100 billion do in 2016 which I believe you said the largest m&a deal that year and one of the larger deals period um the board initially didn't think the company would be bought what was going on back then look you know I think this is another reason why in the book I suggest that uh hubris is a very good thing to is to to avoid um anything can happen and this is anything can happen you know um you know aside from

17:58 that transaction I've been on boards um in in over a decade now just over a 10 years of serving on boards I've had a chairman die in office I've had activists in the stock I've had expropriated assets I've had regulatory fines that were into the billions um a company that was trading a negative retained earnings I mean which is really if you think about it quite um shocking already about a share price that's as high as 53 as low as seven

18:24 bucks and what that might mean um but you know I do think that um in terms of that transaction in particular you know the board had made a number of assumptions we were the second largest uh beverage company but um you know obviously a large beer prod in the world and we just thought gosh the notion that the number one company would swallow the number two company um seemed so distant partly because um we were work we were

18:49 competing in the same areas and there was obvious going to be regulatory antitrust issues that we thought would be hard to work through um we also were we we we totally misjudged the fact that in order to buy us this company number one company aneisa bush had to basically do the largest Bond transaction ever um $40 billion do um and we just thought it's just so implausible they wouldn't surely wouldn't do that um and again boy

19:13 were we wrong but to add to that you know I was the chairman of the risk committee at that time and not only had we assumed that the brexit vote would not happen in 2016 but we if it were to happen there's no way people would vote brexit again um that had material consequences for the valuation of the company and really the the sort of increasing the uh or altering the probabilities of the trans transaction getting done but you know the

19:40 transaction did get done um and you know I think that that's a lesson there that you know anything can happen and I you know I also write in the book that there's no company that's too big too regulated too powerful that will not or could not be visited upon by an activist and it's the same kind of attitude um I've been in a number of boards where the an activist a share share shareholder comes into the stock and you

20:06 think how is this possible but anything can happen anything it's fascinating to hear about it in retrospect and all those things that needed to happen all the stars to a line and sometimes they do um you mentioned brexit obviously geopolitical um changes is something that's so big we're going to get more onto that a little bit later but just one more quick um anecdote from your experiences on board it was fascinating to read about um you were on the bar

20:31 Clays board as it considered withdrawing from Africa yes what was that like so you know it's um it it's for me personally quite traumatic I was born and raised in Africa um you know my first bank account was in an African branch of Barkley's Bank um wow at the time I was serving on the board had been in Africa for a hundred years um and you know in many ways I had to separate the sort of emotional personal me uh you

20:58 know someone born in Africa someone who's very committed to Africa's progress uh ongoing progress in society and in the world um from the sort of the job of being a fiduciary and a custodian of an organization to make sure that it can uh survive and and Thrive over the long term um it was a very hard decision I wanted B Bar Barkleys to stay uh in Africa but at the same time the regulatory environment if you recall was

21:24 post 2008 financial crisis and Barkley is is what called the GFI globally significant um and systemically important uh uh um company and in on that basis uh you know The Regulators had increased some of the capital requirements and and that made it very very challenging indeed to stay um in in the countries and that we were inv invested in in the manner that we were and so very tough but I think it sort of again underlines underscores this

21:53 challenge of having to do um you know things that are perhaps antithetical to what you would like to see happen in the interest of making sure that you're doing your fiduciary duty but also making sure that um over time as a custodian this company continues to to Survive and Thrive and I'm happy to say Barkley is also very much alive and kicking you mentioned gfy and as a former banking reporter for five years that just kind of shook me a little bit

22:20 I haven't heard that one in a while um so I want to go I want to go a little broader for a moment you write a lot about board makeup how someone even gets to be on a board and then the whole kind of uh Power structure within a board to go really high level for a moment um board makeup has been a topic of debate recently and I'm curious should employees sit on a corporate board something that Senator Elizabeth

22:44 Warren has called for and as you right exists in Germany yes you know um let me just um take a step back and say the following because I've had the privilege of serving on corporate boards in different jurisdictions the US the UK um Canada uh and uh also in Continental Europe um you know I'm constantly thinking about ways for what what is best practice what can we do to enhance board um activity and and I do address

23:12 the specific question around employees but also as you know in the book I talk about ways to really upgrade uh boards and I'm sure we'll get to that at some point um but to the question about employees it's a really interesting one and the the the board structure in Germany in particular is slightly different as you know it's a two-tiered system um and so there is a sense that boards is with a managerial board as well as the supervisory one and so it is

23:36 slightly different from what you might see um El elsewhere I will just say um before again I address the specific question that there is a low a lot of overlap in terms of the governance responsibility all these boards have audit committees they all have compensation committees and in that respect I think that there's very um small margins of differences and of course this one about about employees is an important one um I recently wrote an article about uh the fact that I do

24:04 believe that uh you know two things one uh we are more and more in the boardroom able to get the Viewpoint of the employee base into the boardroom um in a way that I think uh is really important and technology is allowing us now to go beyond the sort of company uh sort of managed you know ugv survey Sur you write about um you know like glass door blind so you're so board members are following that to try to get that true

24:36 absolutely we want to hear from our clients we want to hear from stakeholders our employees absolutely it's the only way we can make the best decisions so I think that that's really important we are getting that message loud and clear and there'll always be scope for improvements as technology continues to evolve um but on the other hand you know I do argue and I've written a number of articles I wrote something for Bloomberg um opinion a few

24:57 weeks ago um talking about how it's really important I think um for us to to make sure that that there still is um some responsibilities that are uh and decision make decision points that are made at the boardroom or at the managerial level because um the organizational leaders tend to have a much broader purview so if you are in one aspect or one business unit in a company you might have a very different risk tolerance from the way the company

25:28 uh in its entirety or the Enterprise in its entirety should be viewed if we wanted to think about something like Risk um and so I do sometimes um and I generally made the point that I think we have to be careful about bringing um people uh or you know employees or uh um certain uh viewpoints into the boardroom powerful shareholders we have to be careful about that um you know which I talk about uh large uh um

25:54 non-independent board strategic Stakes uh activist onto the board because you don't want them to to bring a view that might be very narrow um and maybe doesn't take into consideration the sort of more fome picture um but these are evolving debates and discussions that boards I think the best boards have all the time because things are changing um but we do want to make sure that we get that message in from the employees uh in particular but also more generally from

26:22 society r large and in terms of the the makeup of the board it isn't just a question about you know should employees be part of it or not it really is also about what kind of diversity exists on boards you write about how of course major institutional shareholders there's legislation in California NASDAQ proposal recently um what data do you seek out to track and monitor when it comes to diversity and inclusion either on boards in general or the employee

26:50 base which is again something that is definitely at the Forefront for many many major companies yes absolutely absolutely and look let's just take a a minute here to to fully appreciate that uh you know as my my very good friend Melody Hopson who's now the chairman of Starbucks uh often says the numbers don't lie um and we know that the numbers tell us very clearly that more diverse boards corporations um and sea Suites just do better their return on

27:21 Equity is far superior to the cost of capital their ability to as I usually say not just survive but to thrive and compete is enhanced by having more diversity and in the book I cite some specific data from McKenzie reports Harvard business's done a lot of work in this area so it's it's not a matter of window dressing it's a matter of if you want to compete in the 21st century you need to be um really hyper sensitive uh

27:48 to the issue of of diversity diversity of views diversity of race gender um backgrounds I think is absolutely Salient for long-term success now having say said that boards have some levers to influence this um and we you know fortunately we we we've talked already about our ability to hire the CEO um that is a real opportunity for us not just to hire diverse candidates but also to think about whether whoever is taking that seat can be a standard Bearer for

28:19 understanding and really pushing the agenda around a more diverse uh um society and more diverse company um but also we do that through compensation and not just diversity issues but issues around ESG broadly um are absolutely now part and parcel on a percentage basis a considerable part of of how we determine compensation um certainly for the CEO as well as the top management and Business Leaders and I think it will continue to be that but you know that said and not

28:48 withstanding what I've just said um we don't want to be in a world where we're fighting discrimination with discrimination so high- performing white guys are absolutely welcome in companies and they should be encouraged um to compete and succeed um as much as any other group um but there are clearly gaps and we have been uh we've been uh certainly uh lagging behind in terms of uh remedying the the shortfall in in diversity and I'm I'm pleased to say

29:15 that you know certainly the companies I'm involved with but more generally um there's a real sense that this is not just about employees and Boards Etc it's also about subcontractors people who are advising Us in terms of uh uh the the inter the external Auditors the people who are managing the P pension fund money um you know there's much more that corporations can do and of course many of these companies have large uh events and uh Gatherings across the United

29:44 States across the world there's a lot of scope for um for companies to say you know what we want to know more information about what these towns and these cities record is in terms of Education in terms of employment in terms of of Criminal Justice and in terms of healthare to their populations I mean there's a lot more we can do and I I think that it's an exciting period um to think about to think about

30:08 diversity Beyond just sort of the a narrative which uh you know sometimes people um just push it's almost someone has described it to me as like a spoken wheel model it's not just the company itself like you said it's all these other pieces that come together despite even talking about this right now and how much progress has been made and the thought that goes into the future there was a moment that you wrote about in your book that frankly made my jaw drop

30:34 um going back to May 2010 you were at an annual shareholder meeting and a shareholder stood up and said um something quite shocking and I I would love to hear you tell this story yeah sure so basically the context was um I was on the board of Barkley's bank and we had an annual general meeting um we had certainly over a thousand shareholders show up uh it was you know post financial crisis so obviously a lot of enthusiasm in a

31:02 massive Hall and I was the only visible minority meaning I was the only woman on the board um and I was the only uh black person um and so in that respect uh already standing out and you're right the shareholder stood up during Q&A and uh pointed very aggressively at me and said I want to know what the credentials are of that statutory woman that she could serve on this board and you know thankfully uh I had spent uh almost 10

31:29 years working at Goldman Sachs and I had I have a PhD in economics so I felt pretty confident that I could justify my existence on the board oh yes but um you know I I often say to uh to minority candidates and to you know people who are interested in boards that we we should not be in a position where we have to lead with our race or gender um we should be leading the conversation in

31:53 our abilities um we work we try to work extremely hard we want to learn we want to grow we want to contribute um and it's not about getting any breaks or any favors um we want a fair a fair shot at these opportunities and and I think that is uh really was my big takeaway from that experience I will tell you that when we came off the podium uh three of my my white male colleagues said oh gosh

32:18 thank God they didn't ask me about that um because I don't know what I would have answered I don't think I'd be able to have answered anything credible at the time so but you know the good news is that the world's changing uh you know we now in the UK for example you've got about 34% um of women represented on the uh on the on the footsie um most important footsie companies you know more generally I think we all find it a

32:41 little bit odd and peculiar when you look at a board and you don't see um diversity or women and and racially I think it's just odd um thank and certainly the boards I'm on I mean it was just it's an antha to to anything that they would see now I we all are very much attuned to to to more diversity and it's value ad most importantly it is value ad for for competition thank you for sharing that

33:05 story and I think it ties into what you were talking about were company culture you know do people want to be a part of these companies do they feel included do they want to stay even when you bring people in do people want to stay um you write about how company culture is so important it's a really big part of being a board member can you describe a little bit more about how boards get involved in crafting a company's

33:27 cultural message it feels very abstract so what is that like uh you know when you're in the weeds yeah you know it's it's a wonderful question because it's incredibly complex and will vary from business to business I recall on at least one occasion um where a board uh we had a visitor someone who was a cultural uh sort of champion and I was really struck by something he said he said look you know it's actually in a

33:54 way easier to influence and change and pivot culture of organizations where there's a risk that an employee can die by being on the job and he was talking about um having advised the National Health Service in the in Britain advised an energy company where they had an accident um he talked about being an adviser for culture to an army um again you know people will not go home if they don't ascribe or follow certain cultural norms uh the challenge is much more when

34:24 you think about how to drive culture in places is where you know you can work in a bank for example and the the the risks are perhaps mitigated considerably mitigated um of of dying on the job um and I think that it's in the the way that the board engages whether they think more about process versus outcome and I love something that Hastings has talked about Visa Netflix you know if you um are trying to produce penicillin

34:52 I talk about this in the book as well you want as few degrees as as possible um degrees of freedom as possible the the penicillin tablet or the vaccine that I get should be pretty much identical to the one that you get um and in that respect that you could argue that the process is really critical and everything needs to be you know to the nth degree the same um that's a very very different cultural uh setting for

35:16 Netflix for example where people are need to be creative they need to come up with their you know ideas as as far-fetched or crazy as they may seem and they want them to throw it on the wall and see what could come out of it and so the degrees of freedom are much broader um and of course in that respect the uh the role of the board and how they set um the the sort of the the

35:36 check and challenge the culture of the C uh company will be be quite different but you know I will just uh say really how we do it it's it and check this and and make sure it's working is is is an evolving uh it's much more of an art than a science I mean we we are interested in uh thinking about things like nudge you know the cast susin type of agenda should we just nudge employees

36:01 to change their behaviors should we penalize people um literally dock them of their bonus if they behave badly should we incentivize people with for bonuses um there's so many different tools um and we're we're constantly uh looking at how these types of uh of tools and efforts um with within the levers that we have and powers that we have um can be actually impactful for changing culture but it's it's a it's definitely you know school's not out on

36:29 this one this is something that we'll continue to deal with and you know thankfully I don't think that there's an equilibria point where we say okay that's the end nothing more to be discussed it will always no more work on culture I don't think that's gonna can you just imagine um and I think it became even more relevant during this Global pandemic many workforces went remote um question about employee well-being um and employee loyalty and at the same time we've seen this whole

36:57 employee activist movement or at least increasingly more vocal employees I just want to go back to this one point that we flicked at briefly earlier where as a board member you're saying you know you're not just having whatever management is presenting on how employees are feeling you're going out to seek it and try to get information um to really get the full breath of how employees are doing what was that like for you as a board member during the

37:20 pandemic and how are you trying to figure that out you know it's it's incredibly um challenging ing because you're straddling a line of thinking about the here and now but also recognizing that at some point these companies are going to have to stand up um and and continue to operate um and what does that new world look like so yes absolutely you're in the here and now you're blocking and tackling you're trying to make sure that the company is

37:47 in a position to compete and to also make sure people are healthy and safe and that it can operate and pay salaries um and it can do that in a safe way but at the same time you want to make sure that when the company comes out um any learnings any changes we're all talking about what does work uh work life balance but also what does a work or an office look like um postco we are

38:11 already trying to Telegraph that F those future scenarios um clearly the deployment of digitization you know thinking about both downside risks but upside opportunities yes people are now at home what does that mean for cyber risk but also what does that mean for productivity so there's a lot of work um in these areas and and certainly uh I think the best boards and I'm I'm very proud of the work that we've done um you know in our family office but also more

38:37 generally in the boards in which I serve um to really steer that course and say we can't get sort of Naval gazing in the here and now only because at some point we've got to figure out how to to get back to um a postco uh environment and I think that that's really Bal that Balancing Act is really critical absolutely and you talk so much and write so much about not just having short-term thinking but being able to

39:02 think about you know long-term what happens and also what risks might come in the future one more quick question then I want to get to some of these broader points that you bring up um investors and employees and other stakeholders have really been demanding companies do more and environmental social and governance factors I don't even think we were speaking for five minutes before you brought up ESG which is at the Forefront of a lot right now

39:25 um you know it's climate change pay Equity you even write a lot about how companies have to consider obesity what role does the board serve on thing you know ranging from mental health gun control can you just walk us through these are Big topics and I think many people may not realize where corporate boards come into play on those look again this is one of those areas which is very quickly evolving um you know if I look back on my board career the first

39:53 five years this was always somewhat of a ring fenced um afterthought we thought about community service or things we called CSR you know Corporate social responsibility were things we did out of the foundation there were things that you know and you know maybe we'd have an employee run I you know love running marathons and thinking about how we would raise money for the communities in which we operate but that's changed so dramatically now we're much we've gone

40:18 through the whole Narrative of thinking about risk mitigation oh gosh you know greenhouse gases issues around CO2 which continue to be critically important but we're now moving into worldwi wait a minute this is just good business this is about integrated and integrating all of these aspects into how we operate on a regular basis I mentioned to you already 10 years ago I was the only um woman on on my boards and only black person I mean that would be insane in

40:46 2021 I mean I I just can't even imagine now that I even lived in that uh type of an environment but there's no doubt about it these things are are very complicated and that there is no answer you know six months ago I didn't think or certainly before um the tragic death of uh uh murder of of George Floyd I I didn't think that boards would have to aine on on racial Dynamics to the extent that we've had to do we didn't I didn't

41:12 expect to have to think about voting rights but guess what we did and we do and we have to and there is no sort of a uh Compass to say Well when this happens this is what you need to do and very much the environment that we're in now I have to think about what what in six month what might it be um and so I'm very interested and in the book I I really try to push for uh the thinking

41:35 and the efforts around these issues um to make sure that we're very transparent so that we don't end up with a situation where Asian employees say wait a second we've got violence against Asian employees but you were so enthusiastic and outwardly spoken when you were talking about black lives matter why are you not doing that for agents we want to be transparent at what's what we're thinking about we want it to be sustainable so whatever it is we want it

41:58 to be able to have teeth longer term we want it to be I think uh Innovative um I think looking for solutions that work in the here and now um but are not really Innovative um in terms of changing the mold I don't really think um gel and then there's so many other aspects they have to be considerate of different cultures I mean I was just asked not too long ago um by a gentleman who said he

42:23 identified himself as being very conservative religious and said you know what is the board doing for me I don't hear any consideration of My Views and I I was very struck by that so it is about all these things and bringing all those voices in um but I think also most of all um really understanding that we try really hard to reduce the amount of the degree of the of the trade-offs we don't want to leave anybody behind um and so

42:51 thinking about things you know I talked about racial discrimination not fighting discrimination with discrimination and making sure everybody feels like they have an opportunity in the organization but also in things like climate change making sure that um we're not we're not just racing towards um solutions that ignore the fact that 1.5 billion people around the world have no access to sustainable cost effective uh and and and uh and reliable energy uh we've got to come up with scalable

43:22 Solutions um that make sure that people are not ending up uh with uh you know in more Dire Straits and I maybe just one last thing I would just say about this um is that you know I think also boards have to be highly attuned to second order effects um and so when people uh for example put pressure on on the investors to defund an energy company um we need to really understand what that means a knock on effects for

43:49 not just impoverishing people around the world but really um changing and altering the trajectory of people's ability especially people like myself who come from the developing world to to to actually get educated to get access to health care and to live a decent life so there are second order effects um you look at the southern border of the United States all those types of challenges um must be thought about in a sensible um and considered way and this

44:16 is not at all to uh dismiss the urgency and importance of of getting to a real solutions in all of these areas um but I think there is this Nuance that need needs to be appreciated as we as we delve through and CH go through these challenges absolutely and you know we mentioned before some of your time on uh the prior boards you served on and I should just note you're now on the boards of Chevron and 3M so just wanted

44:40 to note that since we talked about some prior stories I want to take a piece of your book where you really took talk about forward-looking challenges and in particular deglobalization what you wrote blew my mind I hadn't even connected these dots um and you write about how companies really have to weigh questions around supply chain data privacy immigration regulation so much more can you set the stage for what deglobalization could mean for companies and how you're thinking about that yes

45:11 you know um absolutely so I think one of the challenges is that U we have had a phenomenal uh period of economic growth and success so certainly the period between 1950 and 2008 in many ways is the Gilded Age in the United States of 1870 to 1900 there was a lot of economic growth globalization in terms of trade in terms of the movement of people in terms of capital uh in terms of global cooperation with institutions um but

45:43 also you know we saw that there was the emergence of a lot of large important corporations um that were really driving a lot of the um the agenda in terms of growth in partnership with government but that is is a world um if you take a step back um and I think Freedom House um their data shows that we've only had liberal democracy um and market capitalism for 1% of human history um so if I go back to and start

46:12 to think about one of the key responsibilities of a board on a regular basis is to mitigate for risks we need to start thinking about well wait a second so odds are that we might be in a world that's much more challenged from this this more ideal at least certain in my mind this idealized global environment and we've seen that we've seen with respect to trade um we've seen the emergence of more bilateral Regional um agreements TPP uh NAFTA which

46:42 obviously turned to usmca brexit I mean this is really uh affecting not just trade in goods and services but also Supply chains um you know as you mentioned I happen to serve on the board of 3M we make the masks so we've been making a lot of the masks um real issues with the DPA the Deferred prosecution agreement that uh oh excuse me the it was actually not it wasn't a prosecution agreement it was a DPA um

47:06 which uh the president former president Trump put in place um basically restricting the sale of masks outside of the uh uh the United States during Co so there are real geopolitical issues that emerge but it's also about Capital flows um you know people who like yourself who worked them in finance you're familiar with the uh the carry trade you borrow cheaply in New York and London and you invest in high risk adjusted returning uh environments like Brazil and

47:34 Argentina and South Africa Etc um but that world is very fractured Now with uh with home biases and in investors but also uh Capital controls you start to think about immigration and how much that is a top topical issue and people you know across the world resisting uh immigration creating pockets of disorderly immigr ation we've seen it in Europe we're seeing it in the southern border of the US that has a lot of implications for how companies hire how

48:03 are you going to hire you don't have that Global Talent pool and then of course you think about the splinternet and the real risk of fracturing um around uh uh technology and intellectual platforms where there could be one Chinese Le one US Le what that might mean for how do you run a global business and you know dare I say it um finally the breakdown of cooperation we've known it from the Breton Woods in 1944 um you know where we actually had a

48:32 liberal order the World Trade Organization World Bank IMF are now being challenged by um Chinese the Chinese in uh initiatives such as the ARP as well as uh um belt and road but also within European and America um sort of the Allies there're real tensions and we've seen that with the the roll out of vaccines and covid response um and the World Health organiz a so I I've sort of have gone through a whole portfolio of

49:00 issues but the bottom line is that we have to mitigate for those risks um we could wake up in a world where which is much more fractured much more bulcan ised um you know how do you think about running your business in a world that's much more siloed I think is an important question that companies and Boards need to think about given absolutely odds on um and so that that is a very much important thing I will just also say if

49:24 I may that it's also not just about again thinking about the risks and the downside it's also thinking about where the opportunities May lie um because as as you know you know as I mentioned you can't shrink your way to growth you've got to think about expanding um the company for for longer periods the glasses have Phil even though those are very weighty questions lastly we talked about this a little bit and I'm sure you've been waiting for us to go back to

49:49 it because investor and the investor base is dramatically changing uh when a new director joins a board I'm really curious about the advice that you give them with dealing with investors and I'm thinking institutional investors demanding more passive investors and how they align themselves and of course activist investors becoming the norm how do you even advise on that front well you know I think the most important thing is to read up on the motivations and the the the angles that

50:21 uh the investors may take I think that we tend to think about large powerful investors whether they're an activist or a passive investor as being sort of out there to cause trouble um and I think that that sometimes people uh take that approach and I think that's not an ideal approach I mean I think they are we're actually all on the same side um but perhaps there is a delta or a gulf of information that we might have as board

50:47 members um and in sort of insiders that they might not have and so I think there's a lot of utility in talking to and engaging with um these uh the shareholders but it's really important for them to also understand that as a fiduciary it's not my just my responsibility to cater to the big and the powerful we need to think about Mom and Pop who bought a few shares uh you know and have have kept them from

51:11 generation to gener ret investors exactly and Retail investors matter a lot and they should matter equally to the more powerful investors um but you know it's also really important to think about the end asset owner not just asset managers the ass owner because very often they have um very aligned goals for the long- term um they're not just looking for shorter term returns or the next quarter um they are also interested and many of the we're talking about

51:39 Pension funds we're talking about uh pensioners um and people who invest in these uh large organizations to manage and whose money is being managed um they want to see investments in education and infrastructure I would Hazard a guess that they'd like us to look through this quarterly uh sort of um machinations and think more strategically about what what are we doing for society how are we helping Society to progress um and and not just thinking about what their

52:07 returns are in the short term so it's not I think it's a it's a complex web because there are many different types of uh shareholders now we have to think about those stakeholders and thinking about whether we need to prioritize is there a ranking system what metrics matter to them um you know there a lot of work that I think the best institutional investors are doing because before what used to happen is we would have two people show up from the

52:29 same organization one of them would be box checking in terms of whether we meeting ESG requirements another one we'll be thinking about traditional Financial returns that message needs to be married as well so there's a lot of work going on I'm optimistic I think we all are on the same side for human progress and society and and really um Economic Development and and uh you know a functioning global economy um and and world and uh and in that respect I think

52:56 we've got more in common than than we we might want to believe I think that's an optimistic note to wrap up on Dr danisa moo thank you so much this book really lays out what a board member does how they operate the focus areas and all the really broad topics that you need to think about and getting into the nitty-gritty it was a fascinating read and I really appreciate the discussion thank you so much thanks for listening to afterwards

53:25 one of nine c span podcasts available on our website you can find them all by going to c-span.org podcasts or on our C-SPAN radio [Music] app