Maintaining the 'Softer Side of Governance' in a Socially Distant World: How can we build relationships when we can't even shake hands?

• Author: Schindlinger, Dottie
• Position: THE AGE OF RISK: Character & Culture in the Recovery

As the COVID-19 pandemic began to surge in March and forced a global shift to remote work, there was a widespread assumption that the changes to corporate life would be temporary. It now seems more reasonable to assume our work lives have changed forever and working remotely will remain a common practice well after the pandemic subsides. But what is the net effect on corporate governance of long-term remote work?

The increased reliance on digital communication and virtual collaboration impacted everyone, including executives and boards of directors--whether or not they were ready to adopt a "digital first" style of governance. The result has been the acceleration of modern governance--the blend of technology, insights and processes--and an increase in both the number and the efficiency of virtual meetings. Many directors have expressed that with the uptick in meetings, they feel better informed on their companies' status and trajectory than ever before, and they see this as a positive development.

At the same time, directors have expressed concern that this new, highly efficient form of governance might have lost the critical--but somewhat hard to define--"softer side of governance" during the rapid transition to an all-digital format. For example, how might newly elected directors build trust and rapport with the board and executive team if they cannot share a meal or an outing? Is it even practical to host a strategic board retreat without the benefit of reading one another's "body language"? How can the board make tough decisions without chatting during meal breaks, where the thorniest issues often get resolved?

In order to learn more about how executives and directors are coping with these changes, the Diligent Institute--the research arm of Diligent Corporation--launched its "Ask a Director Series," which compiles directors' thoughts and experiences on board service, governance practices and the most challenging boardroom situations. Beginning in March, we asked directors, "What changes about corporate governance in a crisis?" Below is a snapshot of some of the lessons learned from these ongoing conversations.

Board and management in close contact while socially distant

Conducted in the months following the onset of the pandemic, these conversations and surveys surprisingly revealed that directors feel more connected in the era of social distancing than they did pre-coronavirus. This is largely because, today, directors are...