Changed--For Better or Worse?

• Author: Elson, Charles
• Position: EDITOR'S NOTE

The COVID pandemic has been an event that none of us has experienced before and, I hope, will never experience again. It has altered our lives in ways that none of us could have imagined. As we begin to see its end, the overriding question is: How will this ultimately change the way we live? For the corporate world, and its directors, the question is especially pressing.

The crisis has changed the functioning of corporate boards significantly. Will it be only a transitory alteration of accepted norms, or will the effect be more long-lasting?

Because of the restrictions occasioned by the COVID outbreak, the vast majority of boards haven't met in person since the declaration of the pandemic. Meetings have been held by telephone or, even more popular, Zoom or similar video conferencing services. It is not that directors have happily chosen to forgo in-person meetings, but the danger of the times requires such actions. Necessity, not choice, has driven the change.

The same may be said of the annual shareholders meeting. Traditionally held in person at a set physical location despite the fact that few, if any, investors would show up, this past proxy season saw most shareholder meetings go "virtual." The electronic approach had been extolled for some years by certain corporations and voting technology providers but achieved little traction until the viral events of 2020 made such a shift required.

Now that a vaccine is at hand and the world may begin at last to return to normal, the question must be raised as to how many of these dramatic changes to board and shareholder function will remain in place. Will we go back to our old human interactive ways? A number are suggesting that these changes have become the "new normal" and may be with us for years to come. This would be a big mistake for a number of reasons.

First, let's examine the re-imagined board meeting. It has been argued that a virtual board gathering has had a positive effect on board function. Meetings are more focused, easier to coordinate and, during the pandemic, more frequent than before. Perhaps we should move permanently to this model, or at least a hybrid, some have suggested. It is certainly true that as no one wants to sit in front of a computer longer than they have to, meetings do seem more to the point. And not having to go through the agony of travel has made them more convenient. But something has clearly been lost in this approach.

Many important decisions and...