“Unprecedented” is one word that we hear over and over again — unprecedented demands, challenges, threats, impacts, and the list goes on. Quoting the World Bank Group, what we are experiencing is “an unprecedented crisis, with devastating health, economic, and social effects felt around the world.” The COVID-19 pandemic has definitely left an indelible mark and has caused distress on everyone.
Did the global pandemic make us realize the value of good corporate governance practices? Are businesses being reactive rather than proactive? This is not the first crisis that businesses faced, but in terms of impact, again, it is unprecedented.
The truth is simple — gender inequality has noticeably been magnified by this crisis and that the progress we made in striving for gender equality and diversity and inclusion (D&I) is at the risk of being stalled, if not being set back. Women, the majority of whom are in the frontlines, bear the heaviest, long-term, and far-reaching consequences with effects on global employment, health, and safety. In addition, even before the pandemic, the burden of unpaid care work fell disproportionately on women. After all, women are not only working from home but are also “working for the home.”
Given the challenges and issues that surfaced, these suggest that the direction of organizations will likely change. Our situation ultimately calls for leaders to look at and treat these changing times with empathy, humility, and consideration. With this, I would like to angle this piece on good corporate governance and D&I.
BRINGING IN CORPORATE GOVERNANCE AND D&I TO A BIGGER STAGE
I had the honor and privilege to be a panelist at the 7th SEC-PSE Corporate Governance Forum held on Nov. 19, 2020, the first online Corporate Governance Forum, with the theme “Business Resiliency and Innovation in a New Normal Era,” which was organized by the Securities and Exchange Commission (SEC) Philippines and the Philippine Stock Exchange (PSE), in partnership with the Global Reporting Initiative. I shared the virtual stage with my co-champions of good corporate governance and ICD Fellows: Attorney Jocelyn Villar-Altamira of Meralco; Ricky Jacinto of Metro Retail Stores Group; Dr. Donald Lim of DITO CME and Udenna Corp.; and Attorney Rosario Carmela Austria of Ayala Corp.
Our panel’s topic was “Corporate Governance in the New Normal,” and the discussion revolved around financial and non-financial impacts, governance issues and concerns, innovation, risk management approach, and crisis management strategies. Wearing my hats as Chair of the Philippine Women’s Economic Network (PhilWEN) and Co-Chair of the Philippine Business Coalition for Women Empowerment (PBCWE), my presentation was anchored on the perspective of workplace gender equality and why diversity at all levels in the organization is good corporate governance practice and a driver of business performance. In the Forum, the panel highlighted what has changed and what issues are emerging as we come into the era of the “new normal.”
Key observations I shared were the following:
• More structure and attention given to harmonizing the interests of stakeholders.
Each stakeholder group — employees, clients, suppliers, and communities — are vital to a company’s ability to succeed. Leaders are in a crucial position to decide when employees must come first, when customer interests should take priority, or when public need is paramount. With stringent health measures imposed, decisions had to be made on whether businesses should remain open to stem continuing losses, while ensuring the health and safety of the workforce.
• More recognition given to public-private partnerships.
Private companies took the initiative of supporting the government’s response efforts using their resources. The pandemic has made it abundantly clear that diversity of people, experiences, and perspectives are equally important, and it also highlighted the need for collaboration between the public and private sector.
• More robust corporate response to Environmental, Social, and Governance (ESG) priorities.
A strong ESG value proposition can create value and every business is deeply intertwined with these standards. In PhilWEN and PBCWE, we are advocating for greater attention to social goals through our policy reform initiatives to improve the sustainability reporting landscape in the Philippines and we look forward to a continuing partnership with the SEC to develop a uniform gender reporting system. Our recommendations include disclosures on well-crafted and consistently followed anti-harassment policies, pay equity, effective training to mitigate biases and increase competency, and removing bias from evaluation and promotion decisions.
• More importance given to D&I as a core business strategy.
The company’s behavior, choices, and decision-making processes should be congruent with the D&I values by bringing different dimensions of D&I, such as gender, age, and ethnicity. D&I should not be put off the table as it is needed now more than ever to best face any form of adversity.
• More emphasis on emotional intelligence.
High physical and emotional stress take a toll on the overall well-being of all. What we need is a more caring attitude and concern for others. Greater empathy and understanding are even more so expected from business leaders now to ease the burden employees face due to the disruptions.
LESSONS LEARNED AND LESSONS SHARED
COVID-19 continues to pose an extraordinary demand on leaders. There are no previous experiences for reference. The challenge, really, is on trust, transparency, communication, integrity and balancing shareholder and social responsibility. More than compliance with existing regulations, business leaders should set the “tone at the top” to demonstrate their companies’ commitment. The visible presence of boards, CEOs, and directors are critical to ensure that the gains of gender equality and D&I advocacy are not stalled and lost as we all respond and recover.
The conversations on good corporate governance practices are gathering speed. Diversity matters where different perspectives are elicited and valued. To drive diversity means taking concerted efforts to address existing cultural and social barriers. As pointed out by Harvard Business Review, what we need right now is to have a more “egalitarian culture” — one that elevates different voices, integrates contrasting insights, and welcomes conversations about diversity.
This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.
Ma. Aurora “Boots” D. Geotina-Garcia is a member of the MAP D&I Committee. She is the Chair of PhilWEN and the Co-Chair of PBCWE.