A significant number of firms are keeping board meetings virtual. The pros and cons.
Companies are struggling to figure out whether their thousands of rank-and-file employees should work together in the office, work remotely, or do a mixture of both. But some boards have already made their decision, at least for the time being, with a significant number staying virtual.
According to a recent survey, 22% of firms are letting directors decide whether to attend meetings in person. Some smaller firms have taken it a step further: 45% of them say their board meetings have gone fully remote. Experts say the flexibility can be critical for these top-of-the-firm leaders, allowing for more efficient decision-making at a time when companies need it. But others worry that directors are missing out on a chance to build the deeper relationships that the most effective boards often have. “When you come into high-stress situations, knowing those people, and the values they bring, is essential,” says Jane Stevenson, vice chair of Korn Ferry’s Board & CEO practice.
Some experts say the optics of staying virtual could become an issue. Firms are still struggling to convince workers to give up their virtual work lives for the office at least part of the time. In the top ten US cities, only about 40% have returned, despite strong urging from corporate leaders.
On the surface, companies haven’t altered the expectations of board meetups. Fifty-nine percent of firms say there’s been no change in the frequency of meetings while 61% aren’t making any changes to board agendas. Some directors believe that the number of remote board meetings will decline soon. “Unless we see a resurgence of COVID similar to what China is experiencing, in-person meetings will continue to be more of the norm and will increase in frequency,” says Joe Griesedieck, a Korn Ferry vice chairman and managing director of its Board & CEO Services practice.
But the board-meeting experience has certainly changed. The pandemic chased directors out of workplaces two years ago, just as it did employees. During those first harrowing weeks and months, many board directors spoke with each other and their management teams more frequently than usual, providing guidance and getting updates about the health of the business and its employees. According to the survey, 32% of firms say their directors are doing a mix of in-person and remote for their meetups.
To some degree, Stevenson says, directors have found the virtual setups more productive, at least in a strict work sense. In a traditional meeting, all the board’s committee work has to be jammed into a single day when all the directors are physically present. Today, governance, compensation, and other committee work can be done remotely a few days before the official meeting. Indeed, 61% of firms say their board’s post-pandemic way of working is more efficient. Some directors are fine with the remote meetings. “The idea of traveling to meet for one or two hours isn’t appealing,” says Juan Pablo Gonzalez, sector leader for Korn Ferry’s Professional Services practice.
But experts worry that boards—and their organizations—will miss out if they significantly reduce face time. Directors build relationships not only during in-person meetings, but also during the associated dinners and other activities. Boards haven’t had those for two years. “Right now, I deal with some board members who don’t even know how their other board members are doing,” says David Vied, global sector leader of Korn Ferry’s Medical Devices and Diagnostics practice.
That face time is often a selling point for new directors, too. Executives want to learn about the skills and experiences of board directors, and they do that much more effectively in-person. “I have never heard a potential board member say that virtual meetings are an attraction,” Griesedieck says.