The costs of being reactive instead of proactive when it comes to societal issues

5 min read
Oct 20, 2022 11:52:09 AM

BoardPro is excited to introduce Lisa Cook, founder and managing director of Get On Board Australia. Get On Board Australia aims to educate and support company directors in their professional journey, advocating for access from across a variety of backgrounds. The courses and resources that the company offers are aimed at jumpstarting the career of aspiring directors, helping them to develop strategies in key areas of governance, business and finance. With this goal in mind, Get On Board Australia offers flexible programs and pricing for professional development across the public, private, NFP sectors and beyond.

lisa cook 2Cook herself has an impressive background. A fierce advocate for people accessing and thriving on Boards, she is invested in the professional development of future leaders across the industry. With a strong background serving on Boards, Cook works passionately to help train new leaders to excel in the Boardroom and enrich their communities.

She is the former non-executive director and current governance committee member of Inclusive Sports SA, which provides assistance and support for minority groups accessing sports. Host of the Board Shorts Podcast, Cook also served as the chair of the City of Charles Sturt’s Western Business Leaders Executive group, working in close collaboration with the Council on economic development in the Western Adelaide region and the business needs of the WBL.

BoardPro reached out to Cook to discuss how Boards and CEOs can frame their responses to current societal issues. We were particularly interested in the cost of being reactive rather than proactive for companies when it comes to these hot topics. Today, discussions of activism and accountability are everywhere in the corporate world, and it is important for both Board directors and Board members alike to be aware of their responsibilities and informed in their responses.

Cook’s professional experience, combined with her enthusiasm for building community and encouraging the growth of future Board leaders, made her the perfect person to speak to about this timely topic.

Q: Based on your years of experience on Boards, what are the main challenges for Boards when it comes to navigating societal issues?

There are so many societal issues and crises occurring, and it is important for organisations to have ambitions beyond purely profit-making at the expense of stakeholders, so you need to know which issues to prioritise and then focus on the ones that best align with your organisation, its activities and underlying ethos/values.

This is to avoid being tokenistic, potentially harming your brand in the long run, and ineffectively allocating corporate resources. It is then finding a way to be supporting your selected issues in a meaningful and prudent way and reporting back the outcomes from this support to your customers and other stakeholders.

Q: Why is it important that Boards take a proactive rather than a reactive stance when it comes to societal issues?

It is easy to be influenced by discrete, topical, or currently heated issues. To ensure your organisation takes a genuine, authentic, and meaningful position on any issue, it helps to be considerate and on the front foot as much as possible.

This helps to ensure the action(s) you take in relation to the issue works to create long-lasting positive outcomes and avoids your organisation from getting caught up in reactionary responses that bring many risks and potential downsides.

It is important to know where to focus your resources and to talk to your customers, suppliers and key stakeholders about what social issues matter to them, as well as to consider as an organisation what matters to you and what you can realistically do in relation to these social issues.

Q: Based on your extensive experience in the Board and governance sector, what are your top tips to Boards and CEOs for navigating their responses and framing their stances when it comes to societal issues?

Any position your organisation takes on any issue must be authentic, genuine and meaningful. What you choose to do as a result of your position on an issue has to have some teeth, meaning that the action goes towards improving or solving the issue.

Take your time and deeply consider any hot-button issues that may be currently inflamed for whatever reason, and do your due diligence into the organisation(s) that you may end up putting your support towards.

Realise that the media and social media present one perspective of an issue, so as much as possible, gather the full story and situation on issues. Determine if an issue is actually something that you must comment on or take a position on. Not every issue is sensible to engage with.

Consider the commercial realities your organisation faces and how whatever social issues you engage with will need to align within those. Understand that whatever position you take on any issue is going to frustrate some of your customers and/or stakeholders.

Q: How does this challenge differ across sectors, i.e., public, private and NFP? How should Boards and CEOs in different industries tailor their responses to societal issues dependent on organisational type?

I do not think the proactive approach would differ across sectors and organisation types. However, there are nuances. A NFP may have an easier job of aligning with a social issue as that is usually what they are established to do; however, a public company will have an investor and significant stakeholder considerations to include in their decisions around which social issue/s to support.

Q: What costs should Boards be aware of when reacting to societal issues? What unintended consequences may occur, and what steps can Boards take to mitigate these in advance?

With any activity in a business, there is a trade-off that occurs; if we choose to do X, then we have to do less (or none) of Y. Reacting to a social issue diverts corporate resources towards it and away from other activities. Whether that is good or bad is for the Board to decide on a case-by-case basis, but it is a commercial reality all organisations face, and it cannot be ignored.

An organisation could unintentionally support an issue-focused organisation that is not well organised, with its money being misappropriated for other purposes. Or it may turn out that the organisation is not quite what it presented itself to be.

There is also the reality that you will not please everyone all of the time. This is why it is critical to select issues to support that are authentic, align with the organisation’s values, and are part of a long-term, ongoing program. It becomes HOW you do business.

It may help to allocate some budget to support pre-agreed, short-term issues that may occur and that align with corporate values (such as supporting a natural disaster response).

As part of risk management, It may help to consider potential social issues that may arise and impact the organisation in the future and develop a plan around how these will be responded to if they were to eventuate.

You should also have clear roles and responsibilities of the Chair, CEO, and Board members when it comes to public comments on the organisation’s behalf about social issues. This will help to ensure one concise voice.

If you are interested in learning more about Get on Board Australia, check out the company’s website here. Learn more and connect with Lisa Cook here.

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