Stephanie Bertels - What Role Should Corporate Directors Play in Reshaping Our Global Economy?





Print article
Jun 09, 2020
by Stephanie Bertels
Register for our Newsletter and stay up to date
Register now
Stephanie Bertels - What Role Should Corporate Directors Play in Reshaping Our Global Economy?

Academic Stephanie Bertels outline four ways for organizations to address structural and cultural inequalities in latest installment on Salzburg Questions for Corporate Governance Stephanie Bertels at Salzburg Global Seminar

This article is part of the series, the Salzburg Questions for Corporate Governance by the Salzburg Global Corporate Governance Forum

If nothing else, our collective experience over the past several months has shown us that society, and therefore our economies and our businesses, cannot be resilient if we do not meet the needs of the most vulnerable. The inadequacies and inequities of our current economic system have been laid bare for all.

A crisis creates an opportunity to let go of habits that no longer serve us. Already, this crisis has demonstrated that businesses have more capacity for adaptation than we thought. But the success of companies re-tooling their manufacturing to provide personal protection equipment should not give us the false sense of confidence that businesses need only to "rally" to address complex issues.  

This pandemic has revealed the need to fundamentally question the role of business in society and its impacts on the larger socio-economic system. It has become abundantly clear that the path forward cannot be a return to the past. We must address the structural and cultural inequalities that underpin our current economy. Nothing short of a reimagining will do. Corporate directors are vital to this shift.

Begin with Yourself

Start by looking inward to examine your privilege and confront the failure of the systems you once accepted as fair and just. Seek out the information and resources to help you surface and understand your own unconscious bias and take the time to listen and appreciate the perspectives of others. This process may feel uncomfortable. It should.

Be Brave - Ask the Question

My research exploring what influences CEO decision-making points to the crucial influence that one director can have in shifting the entire conversation in a board room just by asking one hard question.  

Time is tight; directors are conditioned  to "stay in their lane." But a well-framed question makes a difference, especially when it is coupled with the courage not to accept a simple explanation, but instead, to demand a well-informed answer. Here are a few to consider:

  • What role do we play in furthering the polarization of income and opportunity in our company, value chain, and communities?
  • Are we doing enough to increase the diversity of perspectives represented on our board?
  • Are we contributing to the resilience of the communities in which we operate or eroding it?
  • Are we paying our fair share of taxes, or do we make efforts to avoid them?

Going forward, it is likely to be difficult to justify paying dividends to shareholders if the net-profit calculation does not include providing a fair wage to employees. Here are some additional questions to consider.

  • What does the distribution of wages look like across our organization?
  • Are we paying our employees enough for them to meet their needs and the needs of their dependents?
  • Should we be adjusting our approach to dividends in light of shifting societal expectations?

Finally, given that the issues of inequality and racial injustice are deeply intertwined with climate justice, here is one final crucial question to ask.

  • Do we have a realistic plan to align our business with a 1.5C climate transition?

Revisit Your Approach to Corporate Strategy-Making

As we restart the global economy, companies are under pressure to demonstrate their strategy aligns with meeting the needs of society and the planet. Many companies are reflecting on how they can improve their resilience and contribute to the resilience of the communities where they operate. Our Embedded Strategies Guide helps companies set priorities and goals that are aligned with system resilience and delivering systems value.

Take a Public Position

Of late, an increasing number of companies have been lending their voices to calls for a more inclusive, sustainable, and resilient economy. A dividing line is emerging between those executives and directors that have accepted the role they must play in shifting our societies, and those still focused on delivering earnings and that continue to try to maintain a neutral stance on societal issues. As Desmond Tutu once reminded us, "if you are neutral in situations of injustice, you have chosen the side of the oppressor."

Directors need to get comfortable taking a position on societal issues. Ideally, boards and executive teams will be proactive in developing public position statements, ensuring they back up their position with concrete actions. Recently, we have seen major brands weighing in on systemic racism on their social media channels and in emails sent to employees and customers, many of them employing vague phrasing and awkward execution. Many of these have fallen flat.

In contrast, the unusually direct public statement from Ben & Jerry's addressing the historical roots of discrimination in the United States stands out for its candor and the courage to advocate for specific policies to prevent and redress racial inequality.   

Based on extensive research, we have developed guidance on how to articulate a credible public position on key environmental, social, and governance issues. In addition, our position statement database identifies strong, clear, public positions articulated by global companies in a range of industries. For investors interested in re-examining their proxy voting policies, SHARE publishes a robust set of proxy voting guidelines annually.

Crafting a thoughtful position takes time. I urge you to begin the process now.

Have an opinion? 

We encourage readers to share your comments by joining in the discussion on LinkedIn

Stephanie Bertels is the Director of the Centre for Corporate Governance and Sustainability at Simon Fraser University's Beedie School of Business where she conducts leading research at the intersection of corporate governance and sustainability.  She also founded and leads the Embedding Project (, a research collaborative that partners with global companies to develop practical tools that help companies embed social and environmental factors across their operations and decision-making. Stephanie is a Fellow of Salzburg Global Seminar.

The Salzburg Questions for Corporate Governance is an online discussion series introduced and led by Fellows of the Salzburg Global Corporate Governance Forum. The articles and comments represent opinions of the authors and commenters, and do not necessarily represent the views of their corporations or institutions, nor of Salzburg Global Seminar. Readers are welcome to address any questions about this series to Forum Director, Charles E. Ehrlich: To receive a notification of when the next article is published, follow Salzburg Global Seminar on LinkedIn or sign up for email notifications here:

Related Content

Jeffrey D. Grant - What Are the Board's Key Roles and Responsibilities When Facing Existential Threats to Their Company?

Apr 13, 2021

Gigi Dawe - How Can Boards of Directors Effectively Operate Within a Complex Digital Environment?

Mar 22, 2021

Roland Deiser - What Are the Challenges Surrounding Business Ecosystem Leadership?

Mar 10, 2021

Ravi Chaudhry - How Do We Pursue Governance Beyond Compliance?

Feb 15, 2021

Zachary Mollengarden - "Human Capital"​ Disclosure: What Is The Role Of Corporate Transparency In Addressing Social Ills?

Feb 02, 2021

Shreya Bose - Are Consumers Ready To Make More Informed Choices When It Comes To Climate Change?

Jan 19, 2021

How Should Boards Be Addressing Black Lives Matter And Broader Issues Of Systemic Racial Inequality?

Dec 20, 2020

Are Companies Prepared To Handle The Converging Risks Of COVID-19 And Climate Change?

Dec 20, 2020

Shared Prosperity: What Is The Role Of The Compensation Committee In Addressing Income Inequality?

Dec 17, 2020

What Does It Take For A Business To Survive An Existential Threat?

Dec 15, 2020

Stacy Baird - Is the COVID-19 Crisis an Opportunity for Corporations to Invest in Workforce Transformation?

May 18, 2020

Jeffrey D. Grant - Are Boards of Directors Better Prepared for Disruptive Events if They Include Scientists and Engineers?

Apr 13, 2020

Christopher Beltran - What Role Can Entrepreneurs Play in a Board’s Aim to Foresee Disruptive Risk?

Mar 24, 2020

Anastassia Lauterbach - Why Must Corporate Boards Discuss Innovation?

Feb 25, 2020

Dottie Schindlinger - What Can Boards Do to Create Structure and Process Around Innovation?

Feb 10, 2020

Pamela S. Passman - How Can Boards Provide Oversight on Corporate Culture?

Jan 14, 2020

Barak Orbach - Do Directors and Officers Have a Duty to Monitor Corporate Culture?

Dec 14, 2019

Robert H. Mundheim - What is the Significance of the Business Roundtable Statement on the Purpose of a Corporation?

Oct 22, 2019

Imanol Belausteguigoitia Rius - Why Should Organizations Prioritize Shareholder Welfare Over Profits?

Sep 17, 2019

Michael Ling - How Can a Sustainability Committee Better Look at Potential Risks?

Aug 19, 2019

Stephanie Bertels - Why Is It Increasingly Important for Boards to Clearly Signal Their Position on ESG Issues?

Jul 15, 2019

Katrina Scotto di Carlo - How Is the Gig Economy Changing the Nature of the Corporation’s Relationship with its Stakeholders and its Role in Society?

Jun 19, 2019

John Cannon & Stacy Baird - Is The Board Ready to Address Disruption? 

May 20, 2019

Nicole Lew - How Do Companies Filter Out the “Noise” from Stakeholder Engagement?

Mar 18, 2019

Bharat Doshi - How Do We Retrain Vulnerable Older Workers for the Jobs of the Future?

Mar 12, 2019

Carolyn Frantz - How Could Artificial Intelligence Create New Job Categories and How Can a Company Anticipate These Changes in Workforce Needs and Shape?

Jan 22, 2019

Stacy Baird - Europe’s Privacy Law - A Barrier to Artificial Intelligence or an Enabler?

Dec 18, 2018

Anastassia Lauterbach - What Questions Should Boards Be Asking About AI?

Nov 19, 2018