I have provided below a link to Hedley Lawson’s blog post on the Aligned Growth blog in which Hedley discusses the need for boards to remake their committee structure. I have also provided a link below to a separate article that Hedley wrote on the same subject. Hedley argues for the addition of a new board committee: the Organization Committee.
To be sure, and as noted, the initial reaction to a new additional board committee might well be hesitancy. However, you should read Hedley’s article and post. I believe that it is fair to say that most boards and most directors might not be particularly good at or comfortable with oversight of employer/employee and workplace matters, human capital, organizational communications, organizational trust, reputation, and culture, safety and well-being, diversity, equality, engagement and inclusion, and talent acquisition and retention issues. And yet, exactly those issues are regularly in the news. And they are issues that are important to the operational health and well-being of the organization and are also important as to how the organization is viewed internally and by the public. I believe that we are seeing and will continue to see a renewed focus on these issues and topics.
Here is a link to the pdf of Hedley’s article: 2020 Boards Need a Remake of their Committee Structure
Here is the link to Hedley’s blog post on the Aligned Growth blog: https://alignedgrowth.com/the-need-for-boards-to-remake-their-committee-structure/
In the recent past other of my posts on this blog have discussed ESG, culture, and sustainability. See posts in 2016, 2017, 2018, and 2019 discussing culture. See posts in 2019 and 2020 discussing ESG. And see posts beginning in 2016 discussing aspects of sustainability. Hedley’s argument for a board-level Organization Committee fits well within all three, ESG, culture, and sustainability, including sustainability standards written by the Sustainability Accounting Standards Board. “Culture” was a hot board-level topic not too long ago. As I wrote then, the questions are: where will that discussion go in the future, will the discussion even continue, and what actions will be taken as a result? Hedley’s argument fits well within the “E,” “S” and the “G” of ESG. And, if you look at the SASB standards you will find considerable focus on many of the areas that Hedley discusses (and that are listed above in the paragraph that is above the links that I have provided in this post).
Perhaps the Organization Committee might also be viewed as the “Human” or “People” Committee of the organization. Some businesses have already created officer or senior or mid-level management titles and positions for people who are tasked with dealing with and addressing some of these issues and topics.
I am sure that these issues and topics will continue to be in the news for organizations, boards, and the public, and that there will be additional related focus and expectations as a result. You might also find that for some organizations these issues and topics fall under risk management, or perhaps with the audit committee; however, in my view if these issues and topics are really to be addressed at the board-level the issues, topics, expectations and goals, and tasks must be specifically identified, defined, described, and evaluated, and the oversight of such must be specifically assigned.
Best to you. David Tate, Esq.
Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.
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Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only
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