TOP OF MIND: What directors are thinking
By Directors and Boards

Advanced Disposal Services, Granite Point Mortgage Trust

“Corporate sustainability is becoming part of the boardroom dialogue. What keeps me up at night is the plodding pace — climate action requires a greater sense of urgency and prioritization if we are to stave off the worst impacts of climate change. I have been focusing on how corporate governance can be a catalyst for climate action in my roles as a public company director and as senior advisor for The B Team, a nongovernmental organization focused on mobilizing global leaders to drive a better way of doing business for the wellbeing of people and the planet.

It is increasingly clear that climate change poses both significant risks and opportunities for companies. Understanding how climate change — and the resultant transitioning economy — will impact all aspects of corporate strategy falls within the board’s duties of care, oversight and long-term value creation. Investors are keenly aware that climate change will impact corporate strategy, and expect directors to be able to answer pressing questions — this is clear by CEO letters from Vanguard, State Street Global Advisors, Fidelity and others.

What excites me is the growing acknowledgment that the disruption caused by climate change can actually bring about transformative opportunities for companies and their stakeholders to thrive in the long term. Boards should empower their management teams to design long-term strategic plans that take advantage of these opportunities; at the same time, core board committees (audit, governance and compensation) can ensure oversight of risks, succession planning and incentives to execute over the long term.”

Tanuja Dehne is a Senior Advisor for The B Team, serves on two public company boards (Advanced Disposal Services and Granite Point Mortgage Trust) and is a former C-level officer of a Fortune 250 energy company. She is active in her community serving on the Boards of four not-for-profits focusing on children, education and the environment. 

Universal Health Services, The Penn Mutual Life Insurance Company

“As a sitting CEO and a member of the board of a private company, a director of a public company, and of a nonprofit, I have the opportunity to view governance through various lenses.

Best practices are constantly challenged and new ones emerge for consideration. In theory, and sometimes under the veil of protecting shareholders/stakeholders, they filter their way into the mainstream dialog of boards and the regulators who govern them.

These theses often flirt with the fine line between governance and management, and blur fiduciary and management responsibilities, none of which is good for directors or for the companies they serve.

Centers like Drexel University’s Center for Corporate Governance provide the academic rigor, including practical exploration and vetting of unintended consequences, before taking a position on the value of new principles and practices. It is comforting to know that there is alignment in the objectives of all the entities that I serve. Each promotes an environment committed to high ethical standards, sound business practices and transparency. Members are expected to bring their diverse thoughts, skillsets and experiences to bear on strategy, risk assessment, and financial and operational performance. Each entity regularly reviews management and board performance, as well as their composition.

It may be surprising to some that I see no real difference in the role I play in each of these organizations, despite the way the external world may view them. At Penn Mutual, we focus on topics that are top of mind for all businesses today, like innovation, cybersecurity, risk management, capital allocation and talent management. Public, private or nonprofit — for me, I view the role of boards all the same.”

Eileen McDonnell is Chairman and CEO of The Penn Mutual Life Insurance Company, a director for Universal Health Services, and a member of the Advisory Board for Drexel University’s Center for Corporate Governance.

2017 Fourth Quarter

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