Maintaining the ‘Softer Side of Governance’ in a Socially Distant World
By Dottie Schindlinger

How can we build relationships when we can’t even shake hands?


As the COVID-19 pandemic began to surge in March and forced a global shift to remote work, there was a widespread assumption that the changes to corporate life would be temporary. It now seems more reasonable to assume our work lives have changed forever and working remotely will remain a common practice well after the pandemic subsides. But what is the net effect on corporate governance of long-term remote work?

The increased reliance on digital communication and virtual collaboration impacted everyone, including executives and boards of directors — whether or not they were ready to adopt a “digital first” style of governance. The result has been the acceleration of modern governance — the blend of technology, insights and processes — and an increase in both the number and the efficiency of virtual meetings. Many directors have expressed that with the uptick in meetings, they feel better informed on their companies’ status and trajectory than ever before, and they see this as a positive development.

At the same time, directors have expressed concern that this new, highly efficient form of governance might have lost the critical — but somewhat hard to define — “softer side of governance” during the rapid transition to an all-digital format. For example, how might newly elected directors build trust and rapport with the board and executive team if they cannot share a meal or an outing? Is it even practical to host a strategic board retreat without the benefit of reading one another’s “body language”? How can the board make tough decisions without chatting during meal breaks, where the thorniest issues often get resolved?

In order to learn more about how executives and directors are coping with these changes, the Diligent Institute — the research arm of Diligent Corporation — launched its “Ask a Director Series,” which compiles directors’ thoughts and experiences on board service, governance practices and the most challenging boardroom situations. Beginning in March, we asked directors, “What changes about corporate governance in a crisis?” Below is a snapshot of some of the lessons learned from these ongoing conversations.

Board and management in close contact while socially distant

Conducted in the months following the onset of the pandemic, these conversations and surveys surprisingly revealed that directors feel more connected in the era of social distancing than they did pre-coronavirus. This is largely because, today, directors are communicating with management much more frequently, sometimes even weekly, making them more knowledgeable and aligned on what’s happening at the company on a daily basis. Additionally, the kinds of communication have changed. In the past, management updates with the board were typically limited to reviewing quarterly performance and progress against annual goals; now it’s common for boards to know the details of decisions about when and how to reopen offices, the procedures for keeping the workforce healthy and safe, and the plans for supporting working parents if schools are unable to remain open during the school year.

The increase in communication is in part due to the way directors and management were adapting and iterating plans in response to the crisis, which called for “all hands on deck” and an intense focus on the immediate challenges. In times of crisis, the line between directors and management blurs, and directors were often asked to contribute in ways that ordinarily wouldn’t be expected of them. For example, a director may have been tapped to leverage his or her connections in a particular field in order to help with workplace operations or business continuity.

Good governance goes virtual

Also due to the shifting priorities that stemmed from the crisis — in combination with social distancing requirements and travel bans — many board initiatives, such as annual general meetings (AGMs) and bonding retreats, were put on hold. Since AGMs and retreats are traditionally held in-person, boards across the country made the initial decision to postpone them until post-COVID.

As the pandemic stretched on without an end in sight, it became increasingly clear that both boards and management had to move forward with meetings and conversations that were initially postponed. This year saw the greatest number of virtual AGMs on record, and more boards are now also holding online strategic planning retreats, as well as onboarding new directors and executives remotely.

The thought of conducting these interactive activities — the “softer side of governance” — while staying socially distant might seem impossible. And yet, as necessity is the mother of invention, many boards have found successful strategies to adapt their processes around onboarding new directors and building strong relationships between directors and executives.

Onboarding new directors without the handshake

With the 2020 proxy season behind us, many companies find themselves facing a dilemma — how can we onboard new directors when we cannot safely meet in person? An increasing number of boards have been forced to either adapt to a fully digital onboarding process, or postpone the onboarding process all together. As time continues to pass and COVID-19 infection rates remain high, postponement is no longer a realistic option.

In conversations with new directors, we learned that some found the virtual onboarding process to be the best onboarding experience they’ve yet had. Why? Because when everything is conducted virtually, each step in the onboarding process must be intentional and purposeful.

Directors mentioned that their past onboarding experiences had involved only a few select meetings with key executives to discuss the company and its long-term goals. Immediately after, they were expected to be completely up to speed and ready to participate fully in governance. This was never a sufficient onboarding process.

Now, because every meeting and interaction is virtual, each one must be scheduled with a specific purpose. New directors are participating in hyper-focused, one-on-one meetings with relevant executives. Before these meetings, they are being sent substantial briefing materials and pre-reads so they are well-equipped. Many are given access to the company’s board portal and other secure sites where the incoming director can explore and get briefed on recent issues in a self-paced fact-finding journey. Rather than just passively listening, new directors are better prepared to probe and ask questions out of the gate, making the onboarding process both more efficient and more robust.

In addition, some of the incoming directors we spoke with mentioned they felt they’d received special attention during their virtual onboarding — perhaps partly owing to the high level of concern incumbent directors and executives felt about having to conduct the onboarding virtually, and their fears that the process would not be as effective. During a one-on-one video conference, those involved have mentioned feeling more connected to one another and focused on the conversation at hand. This is, at least in part, because it’s quite obvious to everyone viewing the videoconference when one of the participants is distracted.

Building trust and social cohesion, remotely

While the virtual onboarding process might have some advantages, it remains a challenge for new directors and executives to cultivate meaningful personal relationships when face-to-face meetings are nonexistent. Before the pandemic, directors and executive teams routinely bonded over meals, golf outings, excursions to special destinations, group research trips and site visits. Even amid social distancing regulations and travel bans, it remains just as important for board members to connect socially.

In order to achieve this, companies are organizing virtual social events for their boards. For example, some have held virtual wine tastings, which entails sending wine and food pairings to each director’s home and scheduling a group happy hour with a knowledgeable sommelier. Others have arranged for virtual cooking lessons with chefs, online painting classes, special virtual performances by talented musicians, trivia games and fitness classes.

While these events might not have the same panache as a group excursion, they can still provide valuable shared experiences that promote social bonding. Directors appreciated these efforts and encouraged companies not to be afraid to invest in online experiences just because they are different.

Avoiding “Zoom fatigue” and online burnout

While there are benefits to remote working, it can also be exhausting. Many directors and executives are logging longer hours than ever before and managing a full calendar of meetings each day. Often these meetings come with an increased demand in reading materials and a heightened expectation to be available around the clock.

For directors, burnout is often correlated to how many company boards they are sitting on at a given time — even pre-COVID, the consensus was that directors should limit themselves to serving on four or five public company boards at one time. Now, as directors take on additional responsibility and find themselves working longer hours, it could become impractical to keep up with the workload of five boards at one time.

Overextension leaves too much room for human error and, in our current corporate climate, it’s more important than ever to be mindful of potential burnout. As a director, you’ll need to recognize your workload and make adjustments, as necessary, in order to maintain your personal health.

Looking ahead

While the situation we find ourselves in now is not permanent, it’s clear that things will never go back to the way they were pre-COVID. While most of us prefer to be together in person — the desire to gather is a human characteristic — it’s likely that virtual meetings have become the new rule, rather than the exception. As directors remarked to us, as boards continue to adapt, having the mindset that the changes are not simply temporary can be helpful to fully embracing modern governance — and the new “virtual” normal.


Dottie Schindlinger is the executive director of the Diligent Institute.

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