It's a sobering stat for any board in 2019: only 53 companies have stayed on the Fortune 500 list from 1955 to today.
That’s a 10% survival rate. Even sectors previously thought to be safe – mattresses, oil and gas, health care – are now grappling with power players from unexpected places.
In the age of mass disruption, every company needs to be ready for the day they wake up to the news that Amazon is moving onto their turf. Just yesterday, Amazon unveiled a new credit card that’s aimed at those with bad credit, something no retailer has done before.
At the recent ICD Conference in Toronto, I had the opportunity to ask a panel of veteran board members how to get ready for your Amazon moment.
Here are 6 takeaways from my discussion with John Cassaday, who chairs the board of Manulife Financial, and is director of Irving Oil, Sysco and Sleep Country Canada; Kathleen O’Neill, who sits on the boards of Finning International, ARC Resources, Ontario Teachers’ Pension Plan; and Michael Wilson, who chairs the board of Suncor and sits on the boards of Air Canada and Celestica.
1. Set a Bold Agenda
“Too often we just accept the agenda,” Cassaday said of board meetings. Try sending out the agenda a month in advance instead – that gives the board the opportunity to review and add new items, while allowing management time to prepare
2. Create the Right Culture
The tone is set from the top – so boards need to support innovation and disruptive thinking with candid, open, transparent discussions. “If the board sets the right tone, it permeates management,” O’Neill said. “Boards need to spend time looking at themselves, creating the right culture.”
3. Bring on the Experts
Boards used to hire generalists, but now subject matter experts have arrived on the scene – and they’re invaluable. John says he encourages people to go full steam ahead with questions and insights when their area of expertise comes up. “When it’s your turn, be great. Don’t worry about taking up ice time.” O’Neill raised the idea of rotating 10-year memberships, because the skills you require on your board are always changing.
4. Disrupt the Board Itself
Having a diversity of views on the board is important, and productive. “I encourage someone who is prepared to throw a contrarian view out there, aggressively,” Wilson said. But within reason – you don’t want to create an adversarial environment, or you won’t get transparency. “There’s a line between disruptive and disrespectful,” he added.
5. Never Stop Learning
“Directors shouldn’t think about the job as just meetings, but an ongoing commitment to stay up to speed,” Cassaday said. Board-wide education should be an integral part of the calendar, with site visits and input from external experts. Wilson added that he always insists on reading all the analyst reports – not just the ones highlighted by management, but the “sell” reports too. What are the dissenting views? What can you learn from them?
6. Look Back, Not Just Ahead
Cassaday ran Corus for 15 years, during which time mass disruption hit the media landscape. He says he regrets spending “virtually no time” reflecting as the company sought a way forward, notably through acquisitions. “We were always looking ahead to the next deal instead of thinking about the deal from three years ago.” Even when change is coming at a rapid past, you need to be learning from the past.
As Senior Vice-President, Office of the CEO, John advises the executive leadership on emerging trends in Canada’s economy, providing insights grounded in his travels across the country and around the world. His work focuses on technological change and innovation, examining how to successfully navigate the new economy so more people can thrive in the age of disruption. Prior to joining RBC, John spent nearly 25 years at the Globe and Mail, where he served as editor-in-chief, editor of Report on Business, and a foreign correspondent in New Delhi, India. He is the author of three books and has a fourth underway.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.