How corporations handle COVID-19 isn’t over after the health crisis.
What an interesting time to be a leader, to say the least. I hope beyond hope that the curve of COVID-19 infections has flattened by the time you read this. But we really don’t know when that will happen, and such uncertainty makes leadership particularly difficult.
By the beginning of April, we’ve already seen trading on the New York Stock Exchange halted three times in two weeks as stocks swooned, recovered and swooned again. We’ve seen record unemployment claims and heard mayors and governors call for banks, landlords and public utilities to work with their customers in order to avoid evictions and shut-offs. Supply chains have been tested and stockpiles depleted. Hundreds of billions of dollars are being set aside to keep corporations and Americans working through the Paycheck Protection Program. None of this accounts for the human cost — the seriously ill, the dead.
I’ve been a leader in different ways over the years: at newspapers, in my family, in my community. Most recently I’ve taken on the title of managing editor and digital director at Directors & Boards. It’s a leadership role that comes at a surreal time, but is welcomed nonetheless.
I got the good news in mid-March. When it became official, the promotion was announced on a video all-hands meeting, since we were all working from home by then. I would produce this, my first issue, from my dining room table with my colleagues supporting me from afar.
It’s been intimidating. In addition to working longer hours to accomodate time spent handling same-day digital content about the pandemic’s impact while producing this issue, I’ve also balanced my children’s needs, and wrestle with remote technology for both their educations and my job.
As I acclimate to this new role, I look to you, our readers, for guidance on what it means to be a leader in what feels like a new world. In particular, I’m anxious to learn from those who are not just meeting their fiduciary duties, but who are also doing the right thing.
What “doing the right thing” means runs through our coverage of the ESG debate, and the COVID-19 crisis will be no different.
We will look for those directors and those boards whose decisions not only build and save shareholder investment, but also those who managed risk effectively before the crisis occurred, and those who are considering the interests of their stakeholders — employees and customers particularly — in response to the crisis.
Examples will guide our own actions and I applaud the board members and those in the C-suite at some of the biggest companies in the country who are stepping up to help those impacted by this seismic shift.
At General Electric, David Joyce, vice chairman of GE and president and CEO of GE Aviation, is giving up half his salary. GE chairman and CEO Lawrence Culp said he will forgo his full salary for the remainder of 2020.
Fiat Chrysler’s entire board relinquished their salaries until year’s end. CEO Mike Manley said, effective April 1, he will take a 50% pay cut for three months. Other executives and employees will also see cuts with a plan to see that full-time employees’ wages will be made whole by March 2021.
Manley referred to the cuts as a “shared sacrifice” employees across the company will experience in order to avoid layoffs of permanent employees in the first quarter.
Time will tell if these moves will save jobs, but the attempts are well worth making.
The car company has also retooled some factories to manufacture parts for life-saving ventilators that are in short supply around the world and masks that are crucial for not only health care providers, but are now suggested for the general public here in the U.S.
Rounding out these examples of responsible corporate action, Comcast Corporation took a step to bridge the digital divide that separates poor urban and rural communities by offering free wifi across the country. In addition to everyday contact, many communities are counting on internet access to continue the education of children whose school days were cut short; in Pennsylvania we just learned school buildings will not reopen this academic year.
This, once again, ties into an ongoing theme we cover at Directors & Boards: corporate responsibility.
I’ll be watching over the next several months, to see what boards do next. We talk often about long-termism and this will be a chance to see if we can all become more long-term in our outlooks.
Profits are going to fall, there’s no doubt. But this is a marathon, not a sprint, and we will recover. Boards will have to show leadership that is thoughtful and strategic — and a little empathetic — as the lights come back on.