While at board meetings, Elaine Eisenman makes a point of having conversations with fellow directors about how to meet future human capital needs as technology changes and displaces jobs.
"Massive layoffs are the boards responsibility because they present an issue of crisis management and reputational risk for the company, as well as social justice," says Eisenman, the managing director of Saeje Advisors who serves on the boards of DSW, Inc., the publicly traded shoe retail chain, and the privately held consumer products company Miravan, "Putting people in a warehouse filling out resumes and learning computer skills won't do it."
Businesses across the board, she explains, are going through an increasingly common challenge: how to ensure they have the tech-savvy workforce they need while also being good corporate citizens when that workforce turns out to be leaner than in the past.
Winning at talent acquisition and retention is one important incentive for companies and their boards to consider investments in training, but at the same time a much bigger question looms: as artificial intelligence, automation, robotics and algorithms begin to disrupt the very nature of work and income distribution, what role should corporations play in helping society adapt?
Boards have to answer to demands from the investor community and other stakeholders for more disclosure of human capital management practices, including such issues as widening income inequality, the digital skills gap, and how companies handle massive layoffs due to changing technology needs.
"I've heard a new acronym lately--ESGT, meaning environmental, social, governance and technology," says Robin Ferracone, the founder and CEO of the compensation consulting firm Farient Advisors, and a director of the publicly traded pet insurance Trupanion and the privately held locator platform Gimbal. "I've seen the discussions of technology rise to a whole new level in the boardroom."
Part of the discussions her boards are having revolve around cybersecurity, but she says they must also address "how technology can enhance the product and workforce."
And there's an urgent need for boards to be better prepared. The Human Capital Management Coalition, comprised of 26 institutional investors with assets of more than $3 trillion, has petitioned the Securities and Exchange Commission to require disclosure of all human capital data and risks, in a document that notes "access to training" as an important...