Post-pandemic corporate boards are ripping up old playbooks and updating ‘stale definitions of leadership’

What does a post-pandemic corporate board look like?

That was the central question at a panel discussion that helped kick off Fortune’s Most Powerful Women conference in Laguna Niguel, California, this week. During an hour-long discussion moderated by Ruth Umoh, leadership editor, some clear themes emerged. 

The post-pandemic board is more aware of the demand for diversity, and looking for directors who have a wide range of inherent (gender, race, age) and acquired (professional skills) qualities. It is also awake to the major forces that are constantly reshaping the world and not beholden to the traditions of the past.

Here are some of the key takeaways from the panelists. (These comments have been lightly edited.)

—Recruitment is key to diversity strategy. As boards continue to grapple with diversifying their ranks, it’s a mistake to overemphasize recruiting members with CEO and CFO experience—that often narrows the field to mostly white men, while excluding key skills like cyber expertise and talent management. “Doesn’t a great CEO build a great team of people who have subject matter expertise that complements yours?” said Lanaya Irvin, CEO of Coqual, a nonprofit think tank and advisory group focused on equity in the workplace. “It’s odd that corporate America is plagued by stale definitions of leadership.”

—The pandemic raised board expectations. “Customers saw that necessity is the mother of invention. They saw new things. They saw how quickly it could happen. They saw the innovation, the art of the possible. And that expectation continues,” said Pam Fletcher, board member at Lumentum and a former executive at General Motors. “Boards need to be articulate in talking about enabling technologies that companies need to have so that they know they’re playing forward, and they’re not investing on the back end of trends.”

—Boards should not run away from AI, nor should they underestimate its impact. “Think about it much the way you think about other very challenging topics, where it’s eating the elephant one bite at a time,” said Jameeka Green Aaron, chief information security officer, customer identity at Okta, a data security company. She warned that it was crucial companies take care of details like making sure their data and intellectual property are not on the internet to be used by existing AI models. But she added it’s important to think big picture about the transformative technology. “The cardinal sin that I would not want any of us to commit is to kind of think ‘Oh, this will be in some ways like the cloud on steroids,’ and that it will disrupt the way we think about our tech stack, rather than disrupt the way we think about the world,” she said.

—The most dangerous risks to companies are hiding in plain sight. Citing a classic Monty Python joke, Liza Landsman, CEO of Stash, a fintech company, and a board member at Squarespace, Choice Hotels, and Applause, said “No one expects the Spanish Inquisition.” 

“I did not expect the pandemic,” she said, “but now we all have to constantly be challenging ourselves, our executives, and our boards to think about the risks that have become so much of the fabric of our daily lives that we ignore them. Those are the big risks that get you.”

The Most Powerful Women Summit continues today and tomorrow. If you’re not attending in person, you can still follow the rest of the event on Fortune.com, on social media, and on our livestream of the event here.

Lila MacLellan
lila.maclellan@fortune.com
@lilamaclellan

Noted

“Institutional investors may turn their attention to voting against corporate board members who consistently vote to increase compensation for top executives but fail to compensate employees fairly...Firing workers in what many say is a climate of worker shortages might wind up getting some directors fired.”

—Matthew Scott, columnist at the trade publication Corporate Board Member, argues that recent worker strikes in the U.S. may prompt investors to examine the way corporate directors manage labor concerns.

In Brief

—The conflict in Israel reinforces why most CEOs believe geopolitics is the factor most likely to disrupt their business in the near term, writes Fortune’s Alan Murray. For instance, it could spike oil prices once again, and pressure the U.S. to decrease funding for Ukraine. 

— In its just-published State of Ethics and Trust in Technology report, Deloitte found that 74% of companies are testing generative AI. But more than half of executives say they weren’t sure if their company created guidelines for using the technology ethically.

—Last month, New York State Comptroller Thomas DiNapoli sent a letter to Microsoft, Coca-Cola, Procter & Gamble, and nine other major portfolio companies asking them to consider prioritizing candidates with disabilities as they continue to diversify their corporate boards. "The talents of individuals with disabilities are woefully underrepresented at all levels of corporate America. We need to change that,” he wrote. 

—Retailers will be watching the FTC’s case against Amazon, in which the agency alleges that the tech giant not only undercuts its competitors on its platform but coerces companies into using Amazon’s logistics services. The New Yorker has summed up the government’s 200-page complaint and what may happen next.  

— Jill Penrose, chief people and administrative officer at J.M. Smucker, described her company’s approach to implementing new flex-work guidelines in a conversation with Fortune. “We’re not keeping score and hope they aren’t either,” she said.

The Long Read

Corporate boards across the U.S. will want to study events surrounding the recent workers’ strikes in Hollywood and Detroit, where companies have needlessly lost time avoiding inevitable concessions to workers’ demands. 

As Noam Scheiber reports for the New York Times, the entire labor landscape has shifted in the last few decades. In today’s economy, workers feel they have “nothing to lose” with aggressive strikes, and they will no longer allow companies to own decisions over issues like how AI technology is used. What’s more, union organizers do not feel beholden to old-school closed-doors negotiations, and instead are leveraging public support for their cause. “Psychologically, it’s a big shift: [Corporate leaders] have been in control. They have been able to tell their representatives to go and get concessions on X and Y, to make sure the wage increase is modest,” Thomas Kochan, an emeritus management professor at the Massachusetts Institute of Technology, told the Times. “Now, they have to change their expectations internally.”