Being a public company director ain’t what it used to be, says Anne Chow, former CEO of AT&T Business and lead director at Franklin Covey. “In the past right, boards perhaps had one or two tracks of uncertainty and other tracks of great certainty. Now, because the market is moving so quickly and because we sit in a time in the country and the world that no one can predict outcomes, it requires a board that is extremely agile, extremely resilient and open-minded, and a very tight relationship with the management team,” she says. “There are just so many different vectors of uncertainty.”
Those vectors include the looming recession, inflation, ongoing supply chain issues and geopolitical risk—”and that’s not just Russia and Ukraine, but China and Taiwan and what’s happening in the U.K.,” Chow adds. In addition to those broader, tectonic shifts, boards have ongoing cybersecurity concerns, digital transformation, environmental and diversity goals, war for talent issues, demographics and workforce shifts and related retention issues. “And that goes far beyond what traditionally boards have focused on with CEO succession—there’s much more interest now on the entire C-suite, and the mix of that C-suite.”
In the following Q&A, Chow shares a bit about how her board is navigating the current, constantly shifting climate.
What are some of the things your board is doing to deal with these myriad challenges?
Something we’ve actively done on the Franklin Covey board is to get much more exposure to the full executive team. Not that we’re crossing that line of operational engagement vs. strategic governance, but there are so many issues that span different functional areas, having that governance interlock and those relationships beyond just the CEO, that is something that more and more boards are doing. And these are all things, by the way, that I think require metric-ing and dashboarding in a way that boards can be kept up to date and not get in the weeds, but get a feel for how progress is quantitatively being made.
In the area of ESG, I would say top of mind is having the right sort of metrics such that you’re not just episodically talking about status, but you’re looking at trends on how the business is evolving and making progress in any given area, whether it’s greenhouse gas emissions or the gender mix or ethnic mix of the upper management team or other.
What does your board spend the most time on?
As a board, we spend an immense amount of time on growth and innovation. We are a business that enables other businesses in the way that we support them in their transformation of culture and change, and helping their leaders execute behavioral change at scale. So this notion of growth, of innovation, of what does the market need and where are our clients going and what do they need as far as leadership development or improvement in execution or what do they need as it relates to developing trust-based cultures that are inspiring—that’s where we spend time.
At Franklin Covey, we have gone through a very significant business model change over the last several years in positioning ourselves as a SaaS provider of services to enterprises, educational organizations and school systems. That shift has required us to be very forward looking as we think about technology and platforms and as we think about our customer experience and the user experience.
We spend time considering the broader competitive landscape, more in a long-term way than what’s immediate. The company has been performing well through this transformation and pivot, so we want to make sure that the organization is well positioned as it relates to meeting and anticipating market demand.
As an enabler to that, we have been spending an increasing amount of time on platform and technology because to capture growth in a different way requires different technology strategies. It also requires different talent. So talent is also an area that we’ve gotten even more proactive around in terms of our support of the management team, whether it’s in succession planning of critical roles, or in helping to support the scoping and lens of certain key positions and making sure that we’re hiring for our aspiration as a business as opposed to our immediate need. Every business is a people business and while we have terrific retention of our talent at Covey, you never know, right? I mean, you want to stay on top of that and make sure that the right people don’t go anywhere, and that you’re filling that pipeline of next generation leaders.
On the digital transformation front, what are some of the key ways that you’ve found a board can be most helpful to management?
If you’ve got a diverse board with people who hail from different experiences and different industries, and even different eras, different disciplines, then the board can offer those different lenses of their own experiences with technology and with adoption as well as their own experiences and perspectives in connecting the dots with a forward-looking view—whether it’s a longer term plan on your return on invested capital or a big bet that you’re making because you’re completely transforming or your efforts to completely re-engineer your CRM, we’re looking at what it means for your customer base and your efficacy of your sales force, your ability to generate a higher level of productivity and improve net promoter score and improve customer loyalty through that aspect of your digital transformation. I’ve always viewed that one of the key roles of a board member—and I think it’s particularly true in the area of digital transformation and business transformation—is the ability to connect those dots from what is a strategic investment or an element of the strategy and tie that to other aspects of the market and tie it to business models’ potential shifts or to discussions about potential process re-engineering, potential talent needs and skills needs as the company evolves and takes shape in their pursuit of growth and a creation of greater value for the shareholders and investors as well. Boards can help immensely there.
Right now, you’re not going to have in many cases, pervasive deep domain expertise in any particular given technology, or any particular given platform, but if you’ve built your board right, you will have a plethora of experience from different functional lenses, whether they’re a CFO or a CEO or head of an operating unit or a functional lead, what the consumption of certain technologies may mean. Ultimately, I do feel that a board must have good command over their client set, over the customer base, of how this business and the purpose of the business is evolving. That’s a great area of partnership that I see in our board—management’s openness and willingness to help expose us to areas that we all need a baseline education on or exposure to, because not all of us have the same perspectives coming in.
Does that increased exposure help you get a better handle on what’s happening with culture?
In my view, the only way that boards can really get a good beat on that is to get more exposure to the management team and also to experience the company through its employee lens and its customer lens. One of the things that we’ve done on the Franklin Covey board is made available to our board members an opportunity to go to a learning session or to one of our marketing events or to spend time with a particular client partner.
Just as an example, Franklin Covey serves two key markets, the education market and the enterprise market. My experience is on the enterprise side, so I know that market extremely well and have been actually a user of Franklin services. I know less about the education marketplace. So one of the things that I’m wanting to do over the next couple of months is work with the head of our education unit to get out to a school and to spend time with an administrator to really understand how Franklin is adding value. And that is welcomed, it’s open. I think this is how boards can really get a feel for culture. You’ve gotta be among the people. And it’s not just the CEO—of course we love the CEO, the CFO, the board secretary, our executive chairman, but it’s actually the people who are out there doing the work. It is the breadth of the management team. And as you go from meeting to meeting, whether it’s a board meeting or committee meetings or otherwise, you really do get a sense of the culture and how the organization operates and where there are opportunities and where things are really moving along well. This is very, very critical because one of the key roles of the board is CEO succession, so in order for boards to ensure that they’re doing their part in CEO succession, culture should absolutely be part of the board’s responsibility to provide strategic oversight and support to the CEO.