Looking back at the GUBERNA Board of Trustees 2022

Thinking about the future from the reality of the current crisis: Some constructive proposals and reflections from the GUBERNA Board of Trustees

What approach should we take as directors and entrepreneurs to handle the current crisis and the impending recession? What is changing in the field of corporate governance and sustainable business? Which strategic pillars will show resilience? In this context, how can GUBERNA inspire its members?

These introductions were followed by workshops on the desired response to the crisis (-es). At each table, participants discussed, among other things, the possible consequences for the administrative policy of our organisations and the concrete interpretation in terms of content of the strategic GUBERNA theme “CAP 2030 - Governance in Transition”. Below is a summary of the suggestions, concerns, warnings and other recommendations that were raised:

• Credibility also has its value
  The general image of Belgian companies is not particulary positive at the moment. Partly due to the tensions related to energy prices and general impoverishment due to inflation, the wider public does not really see the business world as a partner in the transition to a sustainable world. We need to make extra efforts to increase credibility and trust in companies. Perhaps we should be moving towards 'a new social contract' that will lead towards greater social legitimacy?
   
• Now is the time for scenario thinking!
  In fact, the companies who took part in the round tables, and more specifically their boards of directors, were totally unprepared for the current crises. This once again underlines the importance of the board of directors building mental resilience through structural forward thinking and visionary scenario analysis. We need to invest more in the art of 'thinking ahead'. We cannot of course predict the future, but can - and dare - we think the unthinkable more often?
   
• Short versus long term
  Awareness of the long-term importance of good governance continues to grow, but some important decisions are still being made from a far too short-term perspective. On the other hand, the long-term strategy of the board also needs to become more aligned with management’s short-term agility. But what is the ideal balance?
   
• More competences needed on the board
  Sustainability regulations and the associated social expectations are increasing in both volume and complexity. Legal and financial know-how alone is now no longer sufficient. Boards must themselves search for more new knowledge and skills: technical ESG competencies, (geo-)political insight, cybersecurity and diverse young talent that can enrich the board’s discussions. In addition, boards of directors also need to develop more “leadership qualities” for their essential interaction with management in these challenging times, where the challenges are very complex. Of course, this implies that directors will have to prepare even better, at greater length and more thoroughly on the basis of even better information.
   
• Dreaming of other KPIs or ratios
  Neither environmental effects (pollution, the depletion of raw materials and energy consumption) nor social impact (social security, education and training) are adequately recorded on our companies’ traditional balance sheets or profit and loss accounts. We suggest an experiment to replace the traditional factors of production with a conclusive “sustainability accounting” of the externalities. Wouldn't that give a completely different but also more realistic picture of our "GDP" and of the "value creation" or value destruction of our economy?
   
• New internal governance
  Handling the many challenges of sustainable business (ESG) is complex and by necessity must be adapted to each company; it requires a new kind of “operational governance” within the organisation itself. We need the tools and guidelines to achieve this transition in the current structures. Who is responsible for what? Who reports to whom? How can you successfully incorporate the vital ESG imperative into your structures and departments?
• Dialogue with the government
  Any business initiative can have a major social impact and interaction with the government and social partners is becoming increasingly important. Perhaps boards of directors can visualise this by visibly providing an 'empty seat' for government, as a representative of society, at their meetings. This image can help directors to think about the impact on - or the social responsibility towards and of - the government with every decision and, if necessary, to make additional efforts in this regard.