Boards Must Lead Companies Through Today’s Political Turbulence

In the wake of current political volatility, corporate boards should continually exercise the full scope of their leadership role, in order to sustain the organizational mission and respond to stakeholder interests they serve.

Every incoming administration has the unquestioned right to seek to shape the government in support of its platform. Yet the headlines make clear that the current transition process is having an impact on the public discourse, the economy and, potentially indirectly, on corporate stability. Further uncertainty could arise as additional appointments are made, policies introduced, executive orders prepared and pardon powers are projected.

It’s anyone’s guess how long this controversy may continue. But there’s no guess as to the potential economic and social implications for corporate stakeholders of all stripes.

A company’s response to unpredictable circumstances requires board ownership. Volatility doesn’t serve to excuse corporate directors from their established duties. They don’t get to “opt out”; in fact, they’re expected to “lean in”. The board must engage “with ten toes on the ground,” as a full partner with executive management, to help guide the company through the uncertainty.

What does that mean in particular? Most importantly, it means a tone at the top that projects traits such as steadiness, perseverance, resilience, adaptability and optimism -both internally to the workforce, and externally to consumers and constituents. It means viewing the landscape not as one of partisan politics, personal ethics or public morality, but rather as “strictly business”.

It also means maintaining unity and collaboration with executive management. It’s not an opportunity for the board to engage in serious micromanagement; it’s rather a circumstance that demands the steadfast attention of the entirety of senior organizational leadership. As culture-based publications of the National Association of Corporate Directors suggest, preservation of the board/management equilibrium is critical in turbulent times.

More specifically, a proper response requires recognition of the potential for discord and change to impact the company: its operations, its workforce culture, its strategic planning and its relationships with stakeholders. It requires consideration of strategies that best position the company to move forward without collateral damage to its purposes. And, it requires proper focus on what really counts: the broader business implications of a new administration’s substantive policy positions; e.g. tax, trade, regulation, immigration and foreign policy.

There may come a time when the response also includes the exercise of the company’s social voice; i.e., positions expressed by companies and their CEOs on leading social issues of the day. That response may also include new corporate citizenship efforts; i.e. measures to address social challenges in a way that complement a company’s strategy and mission.

The perceived value of both the “social voice” and corporate citizenship is to more closely align the company with the interests of all of its organizational stakeholders. Both can offer meaningful value in times of political turbulence.

But the board is advised to take first things first – making sure it’s projecting its presence and responsibility with full organizational visibility throughout this challenging period. Exercising the corporate social voice – and accelerating corporate citizenship initiatives – if exercised at all, makes the most sense when they relate to matters that have essential bearing on their company and its business. Those matters may take more time to come into focus.

Several weeks ago (November 19) marked the 161st anniversary of the Gettysburg Address, in which President Lincoln eloquently expressed confidence in the nation’s ability to endure the turmoil of the Civil War.

While the present circumstances are of course markedly different, they nevertheless prompt a paraphrase of another of Lincoln’s famous comments: ‘The ultimate measure of the board’s character is not where it stands in moments of comfort, but where it stands at times of challenge and controversy’.

As the country – and by projection commerce – proceed through a period of discomfort and unpredictability, an engaged board, working collaboratively with management, will drive the company forward with both hands firmly on the corporate steering wheel.