CEO letter:

The future of work

Kirsten (KP) Patterson

Tēnā koutou katoa, 

It’s often casually said that a board’s only and most important task is to appoint a CEO, and then hold them to account. While a flippant understatement of the role and responsibilities of a board, the sentiment as to the importance of CEO selection is, at least, true.

I’ve long thought that organisations and CEOs have seasons. The skills needed in a season of growth are different to the skills needed in a season of retraction. The art is in matching the organisation’s seasonal needs with the CEO’s seasonal skills. A mismatch in seasons is perhaps why we see previously successful CEOs struggle in different organisations or industries.

Each year, Larry Fink, the Chair and CEO of global investment manager BlackRock now famously writes to the CEOs of companies in which BlackRock invests on behalf of their clients. Eagerly awaited by the market for its insights and commentary, the letters have become almost iconic and are a must-read for those in corporate governance globally.

BlackRock’s Investment Stewardship engagement priorities for 2019 are:

  • governance, including the company’s approach to board diversity
  • corporate strategy and capital allocation
  • compensation that promotes long-termism
  • environmental risks and opportunities
  • human capital management.

The 2019 letter notes that: “As we enter 2019, commitment to a long-term approach is more important than ever – the global landscape is increasingly fragile and, as a result, susceptible to short-term behaviour by corporations and governments alike.” Fink goes on to comment that: “Around the world, frustration with years of stagnant wages, the effect of technology on jobs, and uncertainty about the future have fuelled popular anger, nationalism, and xenophobia.”

Fink closes his 2019 letter with a call to action: “One thing, however, is certain: the world needs your leadership. As divisions continue to deepen, companies must demonstrate their commitment to the countries, regions, and communities where they operate, particularly on issues central to the world’s future prosperity. Companies cannot solve every issue of public importance, but there are many – from retirement to infrastructure to preparing workers for the jobs of the future – that cannot be solved without corporate leadership.”

This edition of BoardRoom launches our first “What Matters” theme for the year – The Future of Work.

The seasons are changing. The skills needed to lead through the future of work challenges of tomorrow are quite different to the traditionally valued skills of yesterday.

Directors have always been at the forefront of the future of work trends – self-employed mobile workers, on time-based engagement contracts, serving in self-determining teams who select their own leaders. Directors are ultimately participants in the gig-economy, although thanks to section 151 of the Companies Act requiring that directors of New Zealand companies must be "natural persons" directors are currently slightly more protected against robots taking over their jobs than the average kiwi worker.

Regardless of whether the robots are knocking at the door of your office or not yet, the new valuable skills for the future of work are our adaptability quotient, and our ability to be life-long learners. It was Mahatma Ghandi who reminded us to “learn as if we are going to live forever.”

Ngā mihi 

Kirsten (KP)

2019 February/MarchBoardRoom