There’s no playbook for the times we are living in. The 2008 financial crisis might be the closest to the uncertainty and upheaval we are experiencing. Back then, the chief financial officer role was taken to a new level. Needing to plot a course back to recovery, businesses and their boards leaned on their finance leaders.
I believe today’s unprecedented social and economic disruption have a similar elevating effect on the chief human resources officer role. This is because CHROs are the experts in workforce resilience and human transformation. They are, therefore, ideally placed to help solve the challenges facing workers and broader society.
As the weeks and months of the COVID-19 crisis have dragged on, people have felt increasingly stressed and despondent. The demand for mental health services has increased. Social discord, polarizing politics and extreme weather events are all taking a toll as well. To give just one example: A recent U.S. study found that more than 80% of Americans report that their nation’s future is a significant source of stress—up from 69% in 2018. People are resilient but need support.
Boards are Turning to CHROs
That’s why it’s so fantastic to see company boards increasing workforce resilience oversight. A new report from Accenture shows that COVID-19 increased 70% of board member involvement in the company workforce strategy, and that a new type of “modern board” is emerging. Modern boards differentiate by working much more closely with the CHRO. Why is this significant? Well, just like the CFO during the 2008 financial crisis, the CHRO is now at the heart of business strategy and commands the ear of the board. And when this happens, businesses and their people do better.
To further explore this, I recently talked with two inspirational HR leaders: Laurie Siegel, senior advisor at the G100 Talent Consortium, and Jill Smart, president of the National Academy of Human Resources. Both women also sit on the boards of several successful companies and their compensation committees. To kick off the conversation, I asked both how COVID-19 is changing the way boards lead on workforce resilience.
For Siegel, the issue is becoming more critical by the hour: “In the early days of the pandemic, boards were amazed at how much resilience and adaptability the workforce showed. Now we’re in November, and the strain is starting to show. Boards are taking up the challenge and engaging more with workers to help them cope with the impact of changes that will be felt long after the immediate crisis has ended.”
Smart agreed: “Boards have gone from thinking primarily about organizational resilience to focus on the resilience of individuals. This has a lot to do with COVID-19 but it is also linked to other major events happening today, including the Black Lives Matter and Time’s Up movements, natural disasters, political upheaval and much more. A lot is going on today, and boards have realized that HR is a great place to start when looking to help their people adjust.”
Next, I asked about what practical steps boards are taking to help build workforce resilience.
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Siegel highlighted the role of human capital committees: “Boards don’t meet that often, so there needs to be a way to guide during fast-moving times. We’ve added human capital oversight to the compensation committees’ purview on the boards I sit on. These committees have been vital during the pandemic, maintaining a strong connection with the executive team and helping them respond to workforce issues as they arise.”
Smart added: “I’ve been pleased to see boards and the C-suite turn to HR to help them navigate the crisis. And I love how CHROs have answered this call. Across companies and even industries, CHROs are reaching out to learn from each other and share best practices. They’ve shown huge levels of innovation and professionalism to meet the new demands being put on them by boards and, in the process, have reinforced just how important they now are to business success.”
For both Smart and Siegel, the board level changes stem from a renewed appreciation by business leaders that people are fundamentally crucial to meeting business goals. As Smart put it: “COVID-19 has reinforced that the talent in the organization are mission-critical to the delivery of products and services to customers. Companies need their people to thrive, and that makes their resilience and wellbeing of interest to boards.”
Siegel added: “Expect to see boards pay much more attention to the things that matter to their people, such as climate change and Black Lives Matter, and factor these elements into workforce oversight with the aims of improving performance, managing risk and adding value to the customer.”
Promising Times Ahead
I came away from my conversation with Siegel and Smart more optimistic about the future. HR professionals have long known that they have an important strategic role, which is now recognized more widely. Siegel and Smart are themselves proof of that: formerly CHROs, they are now leading and influencing prominent boards. As boards become more focused on workforce strategy, their composition will change, and more people from HR backgrounds will be brought in for their expertise. This change will serve to further embed HR as one of the critical pillars of business success, which, in turn, will help create more resilient, engaged and fulfilled workers. That’s great news for business and even better news for society.