‘First Reactions Aren’t Always the Best Reactions’
By April Hall

Former Secretary of Homeland Security Jeh Johnson says corporate leaders, like government leaders, must be willing to adjust nimbly to changes in a time of crisis.

 

Fewer than a dozen people have served as Secretary of Homeland Security since the department was added to the Cabinet in 2003. Jeh Johnson is among the longest-serving, heading the department under President Barack Obama from 2013 to 2017.

During his tenure, Johnson dealt with many of the same threats facing the U.S. today: cybersecurity, surges in illegal migration at the Southern border, foreign terrorism and a deadly virus — Ebola — in the fall of 2014.

Ebola never reached the scale of the novel coronavirus that is now gripping the country, but it informs his opinion of current events.

“I have to say that, as we speak and the coronavirus is taking hold in this country at very alarming levels, it reminds me that the thing that worries the public about lethal viruses and creates the most anxiety is you don’t know where it is going to stop.

“You don’t know how far it will spread, how many people be affected before we turn the corner. So there is that great unknown that causes a lot of anxiety and fear.”

In Obama’s first term, Johnson was general counsel for the Department of Defense, and he served as general counsel for the Air Force from 1998 to 2001. From 1989 to 1991 he was an assistant U.S. Attorney and in between all of that he has practiced corporate law at Paul Weiss Rifkind, Wharton & Garrison LLP.

In addition to his work as an adviser with Paul Weiss, Johnson served on the board of PG&E and currently sits on the board of defense contractor Lockheed Martin. He is expected to be voted onto the board of U.S. Steel at the company’s annual meeting in April.

During an interview from his home in Montclair, N.J., Johnson shared his thoughts on how serving on a corporate board and serving in national security requires many of the same skill sets, giving retired military or other security officials an advantage as directors.

This interview was conducted in mid-March as many states were issuing stay-at-home orders in reaction to the COVID-19 pandemic. Johnson’s answers are in the context of the relatively early days of the pandemic so powerfully affecting American life.

Some responses have been lightly edited for length and clarity.

What would you characterize as the largest risk that you faced while serving as secretary of Homeland Security?

The greatest risk for any national security official is that, in maintaining the balance we have to maintain between preserving the physical security of the public and preserving their civil liberties and values, we go too far in one direction versus the other. Preserving that balance is so critical, particularly in times like these. Also, reminding ourselves in government and positions of authority, even in corporate America, that the first reaction to a crisis is not always the best reaction. Sometimes you have to think about longer-term implications to action taken. The constant risk that anyone in national security faces is we overreact to something and push too far.

I’m sure current affairs remind you of the threat of Ebola. What do you think of how response to the coronavirus is developing?

At this point the coronavirus has had a much more significant impact on the United States, and analogies between the two are very often poor ones. Ebola and coronavirus are two different types of viruses emanating from two different parts of the world. But the lessons learned from any lethal virus — and this one’s a pandemic— are that, again, first reactions are not always the best reactions and, in terms of government response, what is also important is messaging.

First, the American people are not stupid, and if you tell them the truth in plain, straightforward terms and explain what they must do to respond, they will generally do what you ask them to do, so I do not believe it’s appropriate to scare people for the sake of scaring people. My successor once said, “If you knew what I knew, then you’d hide under the mattress.” Well, that’s not a very helpful response because you’re striking fear in the hearts of people, but you’re not telling them what the government is doing about it, what they should do about it.

Nor do intellectualized responses like “More people will get the flu than will get the coronavirus” work. People don’t want to hear that from leaders who have the responsibility to keep them safe.

They want to know what you’re doing about it. My approach in a situation like this would be, and was, first to give people the facts, what our best estimate is of the impact of the situation. Then give them, in very straight and simple terms, the eight, 10 or 12 things comprehensively the government is doing about it, or for private business, what your employer is doing about it. Then say to them, “Here is what you, the members of the public, or the members of the employee base, can do to help protect yourselves, your family and your colleagues.” People generally respond when you ask them to step up and help with a problem. It’s the “here’s what our government is going to do for you” constantly, without asking for sacrifice, that is not productive. Very often our leaders underestimate the public’s willingness to help in a time like this.

The messaging has to have three components: Here are the facts, here is what we in positions of authority are doing about it, and here’s what you can do to help. And when you do all of that, I think the public understands that we don’t live in a risk-free society, you can’t guarantee us anything, but we recognize you’re doing the best you can. Constant visibility helps, too.

You said the first reaction to a crisis is not always the best reaction. When you have more time to think and say, “We shouldn’t have done that exactly” or “We also need to do X or Y,” how easy is it to pivot?

Let me explain what I mean when I say, “First reactions aren’t always the best.” In a situation like [a pandemic] there could be a temptation to say, “Well, let’s ban all air travel.” Well, OK, that might be my first impulse, but then I’d want to gather around the situation room conference table or the conference table at headquarters at the [Department of Homeland Security], and say “I’m thinking about doing this, what are the implications of that?”

The first response that should come from that is, well, you cannot exclude American citizens from their own country — that’s number one. Number two: You cannot impose this immediately. And number three: If you give people a notice period for, let’s say, banning all travel to the United States effective midnight on Friday, you create a rush for the lifeboats by people who may be overseas and affected by the virus.

That’s why I say first reactions are not always the best. And if you have to pivot from a prior response or reaction, then you have to do that, acknowledging that what you tried initially didn’t work. Your public will appreciate honesty.

You’ve talked about messaging. You’re serving on one public company board and joining another. What role does the board have in messaging in a crisis?

I believe, first and foremost, it’s up to the CEO to be the principal spokesperson for the corporation. Certainly, a board of directors can advise, can guide in the right direction, but it has to be up to the CEO to be the principal spokesperson both internally and externally for a corporation.

What is the board’s role at this point, then? Are you having regular calls? Are you getting documentation updates? What does that look like?

I’m speaking generally, not just about Lockheed or any other business, but in general right now. In a time of national crisis, a board’s role is to be kept advised by the CEO either through written communication or regularly convened board calls or meetings. If board action is necessary, certainly convene the board for that purpose, but from the perspective of a director, we count on the chairman and CEO to keep us informed even when board action is not required immediately.

That’s true also for not-for-profit boards. I serve on several not-for-profit boards. One is the Council for Foreign Relations, another one is a thinktank in Washington, the Center for a New American Security. I serve on the board of the 9/11 Memorial and Museum and then I serve on the board of a little radio station in Newark, N.J., called WBGO. It’s a jazz station. I love the station and the CEO of the station said to us that the employees would appreciate a message from the directors. So I took it upon myself to write the staff — I wouldn’t do this at a large public company — but I took upon myself to write to the staff to say how much the station means to me, how much it meant even when I was in Washington. “I would listen to you every Saturday and people need the continuity of your music in times of crisis, keep up the good work.” And they appreciated that coming from the former Secretary of Homeland Security, I hope.

You’ve served in both the private sector and the public sector. Have you always practiced corporate law?

For the most part; I’ve been with Paul Weiss since 1984, off and on.

I grew up as a trial lawyer and a litigator, and that has involved defending corporations in financial services, education. I’ve defended law firms, the tobacco industry — across a number of different business sectors — pharmaceuticals. This iteration of my legal career has been mostly advisory.

How does one experience influence the other? Either going private to public or public to private?

Great question. I left Paul Weiss in 1988 to become an assistant U.S. attorney. I was immediately put into a situation where I had a lot of autonomy and was trying my own cases. The prior experience at the firm taught me the virtue of attention to detail and legal research. When I left the U.S. Attorney’s office, I had become an experienced trial lawyer, which greatly aided in my private practice because I was then trying lots of cases.

When I left private practice to become general counsel of the Air Force in 1998, that was a huge, huge transition. I’d never worked at the Pentagon before, I’d not been in the military, but the legal skills I had honed in private law practice were a great virtue in 

being the senior legal official for a very large government agency — even if I had not been in a national security position before nor a public servant at that level. So that was all good.

The four times I’ve left public life to go back to private law practice, just having the perspective of making big decisions, grappling with very large, high-risk issues, adds perspective to private practice. Having been general counsel for the largest agency of our government, the Department of Defense, helped in advising private clients on big, weighty issues and in understanding how legal advice fits into a much larger picture of the business decisions that a CEO must grapple with.

I have to say there’s not a whole lot in private life that prepares you to be Secretary of Homeland Security, running a government agency of 230,000 people. A lot of it depends upon the components of very different experiences and, very often, your own good instincts about how to respond in times of a crisis or how to run a very large government agency.

Did you feel like you were at a disadvantage going into military administration and the Department of Homeland Security because you hadn’t served in the military?

I believe that in a society and a country such as ours, there is virtue in having civilian oversight of the military. Our Department of Defense is structured in a way that the leadership of the department are civilians. The secretary, the deputy secretary, the secretaries of each service, the senior legal official are civilians, and I think there is great virtue in that. It is certainly not a prerequisite for that type of experience that you served in the military. For me what was important was spending the time to understand the mission, to understand the values of military culture and military life, to understand the sacrifice. When you take the time to do that, the rank and file will appreciate the civilian leadership. When I had to give the legal signoff for various special ops, which often presented very complex legal issues, I think the clients — the rank and file in special ops — appreciated that I took the time to understand the technology, to understand the implications, to understand how they did their jobs before giving the legal signoff on an operation.

What were you looking for when considering serving on a board of directors?

Lockheed was the second [board I joined] and the one I’ve served the longest on, so that’s the one that’s most significant for me.

In this stage of my career I wanted to be part of corporate management. I spent a career advising corporations and I spent time in public service running, or helping to run, very large government agencies. In my legal career I advised boards of directors directly, and in this phase of my career I wanted [serving on boards] to be part of what I do. The nature of the mission is also important. Lockheed is a defense contractor, and I had been with the Department of Defense.

What is your overall vision of what boards have to do right now? Not just what you’re doing, but what advice would you give board members? Not only now, but in the weeks ahead?

Remain vigilant. Remain informed. Do not be afraid to ask questions. The decisions that we make now could have far-reaching implications. Do not be afraid in a rapidly involving climate to revisit tough decisions that were made a week or a month before. Be aware that the decisions we make could be very material to investors and potential investors. Be aware how previous public disclosures that have been made may need to be revised in a rapidly involving environment. And ensure that management has engaged in contingency planning to cover a rapidly changing environment.

Was it the role of corporate America to look at the contingencies before something like this happened?

It depends on the particular industry you’re in. Corporations have to have planned for a contingency where large segments of your workforce are unable to show up at the workplace and have to work remotely. Or disruptions in supply chains, or disruptions in your own operations or some sort of cybersecurity disruption. That type of contingency planning should be fundamental to any business.

As a legal adviser, do you think that once the dust settles there will be litigation claiming that boards should have been prepared for this pandemic?

I will not predict a new wave of litigation in light of the crisis we face now. History does teach, however, that there is a phenomenon called “stock drop litigation” where any dramatic decline in the market or in a particular stock price leads to a wave of litigation for a variety of different reasons, which is why it is so important for senior management to be mindful of its public disclosures — past, present and future. What I mean by that is there might be public disclosures that a corporation made previously that need to be revised or updated in light of the evolving environment.

Can you speak to the value of retired military on corporate boards?

Retired military, and specifically former national security officials, in general I think bring great value to corporate boards, (a) because of their experience running very large organizations, (b) because when you’re dealing with a retired general or admiral on the board of a defense contractor, very often they’re intimately familiar with the technology and products because they used them while they were in the military, and (c) because very often those of us who have been in national security can anticipate a crisis, can see the second,- third-, fourth-order effects on any decisions and are well-versed in international affairs.

 
 

Issue: 
2020 Second Quarter

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