Your portal to
enterprise engagement

Are Board Directors Still Behind the Curve on People Management?

A recent report published by the National Association of Corporate Directors (NACD) reads like a playbook from the past. Despite all the talk about Stakeholder Capitalism, human capital management and reporting in the business media over the past year, the organization’s list of board priorities indicates growing awareness of the people business, but that there is a long way to go.
 
By Allan Steinmetz 
 
A recently published newsletter by the NACD reports on the priorities for board of directors for 2021. The prescriptions sound like more of what the organization could have prescribed in any year with little serious acknowledgement of the fundamentally different dynamics coming out the of pandemic. The summary does talk about renewed focus on non-financial reporting and on “continuous ESG (environmental, social, governance) learning for future-fitness oversight,” and board realism in a “net-zero” world.” 
 
The newsletter’s prescriptions beg the question: what have we learned from this crisis as it pertains to people? What burning issue should boards address related to people, based on all that has happened? What about the need for developing purpose-driven strategies or finding new ways to create value through people instead of from them? What about the opportunity to leverage employees as valuable assets with tangible returns on investment, instead of treating them as a cost or commodity? 
 

Recently, the World Economic Forum’s virtual Davos event held several sessions on its new “Stakeholder Capitalism” principles and metrics that aim to provide more transparent information on human capital investments and outcomes, yet the NACD report says nothing about this topic. Recently Ernst & Young published a LinkedIn survey finding that people are considered the most important metric for measuring Stakeholder Capital. Yet employee advocacy and engagement and the importance of incorporating these issues into corporate strategies do not appear to be keeping pace with demand. The only way this will change is if there is a total change of priorities and reorientation for management leadership. 
 
It seems to me that over the past year there has never been more discussion about the people component of business or a greater recognition that employees represent a significant lever to enhance organizational performance. This begs the question of why boards still are not holding their management accountable to establishing, executing, and measuring engagement aligned with their purpose and culture. If boards are not giving proper attention to these topics, why should management?
 
Nowhere in the NACD summary is there any recommendations related to treating the workforce as an asset. Little is mentioned about human capital management, metrics, and reporting, undoubtedly one of the hottest topics in the business media today. There is no identification of the necessary training and development or other engagement processes advocated by the Enterprise Engagement Alliance’s education program or ISO 10018 people engagement standards, or those of other organizations focused on a strategic and systematic approach to people management. 
 
Here are just some of the facts regarding employee engagement and why it is so critical to operations and therefore boards of directors and CEOs:
 
A six-year study conducted by the human resources analytics firm McBassi for the Enterprise Engagement Alliance of 40 companies with high levels of customer, employee, and community engagement collectively outperformed the S&P 500 by over 37 percentage points. The companies were selected by the McBassi human resources analytics firm based on over a dozen independent metrics.
A study by London Business School professor Alex Edmans, published in the Harvard Business Review, found that the companies in the Great Places to Work list outperformed the markets by on average 3% a year over 28 years. 
The annual Barron’s 100 Most Sustainable Companies list in 2020 outperformed the stock market for the fourth year in a row. 
A survey of over 3,000 Americans by JUST Capital, an outreach group, found that over 70% prefer to do business with companies that focus on people.
 
It has become clear that people are the last bastion of value creation. Until boards change the incentives for CEOs and senior management, many organizations will continue to overlook a significant opportunity to improve returns for shareholders. 
 
For More Information
Allan Steinmetz
CEO, Founder
Inward Consulting
asteinmetz@inwardconsulting.com


Master the Principles of Enterprise Engagement to Achieve Organizational Goals and Enhance Your Career

  • Profit from a new strategic and systematic approach to engagement to profit from the principles of Stakeholder Capitalism, enhance your organization’s brand equity; increase sales, productivity, quality, innovation, and safety, and reduce risks.
  • Get trained to become a Chief Engagement Officer for your organization.
  • Learn how to create Sustainability or Integrated Reports for Your Organization or Clients.
Learning and Certification: The Enterprise Engagement Alliance 2.0 education program, the only learning and certification platform for boards, executives, and managers seeking to understand the implementation principles of Stakeholder Capitalism, human capital management and measurement, and ROI of engagement. For more information, contact Bruce Bolger at Bolger@TheICEE.org or 914-591-7600, ext. 230. 

Resources: 
ESM at EnterpriseEngagement.org, an online trade publication founded in 2008 that features news, profiles, research, and more on the field of Enterprise Engagement, the implementation process for Stakeholder Engagement, and the EEXAdvisors.com buyer's guide and resource directory. This includes a comprehensive resource library on Stakeholder Capitalism, human capital management, measurement, and ROI of engagement. 

RRN at RewardsRecognitionNetwork.com, an online trade publication founded in 1996 that features news, profiles, research and more on rewards, recognition, gifting and brand media, and the Brand Media Coalition, the only guide to the story-telling power of brands and where to source them for business, event, promotional gifting, and rewards and recognition. This features a comprehensive resource library on brand media, rewards, recognition, incentives, gifting and more.


The Enterprise Engagement Alliance Human Capital Management and ROI of Engagement Youtube channel featuring one-hour and 30-minute panel discussions with experts on multiple topics on Stakeholder Capitalism, Human Capital Management reporting and measurement, and engagement tactics. 
 
A CEO's Guide to Engagement Across the Enterprise cover
Books: 
Enterprise Engagement for CEOs:The Little Blue Book for People-Centric Capitalists
This is the definitive implementation guide to Stakeholder Capitalism, written specifically to provide CEOs and their leadership teams a concise overview of the framework, economics, and implementation process of a CEO-led strategic and systematic approach to achieving success through people.  (123 pages, $15.99)

Enterprise Engagement: The Roadmap 5th Edition
The first and most comprehensive book on Enterprise Engagement and the new ISO 9001 and ISO 10018 quality people management standards. Includes 36 chapters detailing how to better integrate and align engagement efforts across the enterprise. (312 pages, $36.) 

Services: 
•  The International Center for Enterprise Engagement at TheICEE.org, offering: ISO 10018 certification for employers, solution providers, and Enterprise Engagement technology platforms; Human Resources and Human Capital audits for organizations seeking to benchmark their practices and related Advisory services for the hospitality field.ISO 10018 Cerfified. Quality People Management
•  The Engagement Agency at EngagementAgency.net, offering: complete support services for employers, solution providers, and technology firms seeking to profit from formal human capital management, reporting, and ROI of engagement practices for themselves or their clients, including Brand Alignment audits for brands and Capability audits for solution providers to make sure their products and services are up to date.
•  C-Suite Advisory Services—Education of boards, investors, and C-suite executives on the economics, framework, and implementation processes of Enterprise Engagement. 
•  Speakers Bureau—Select the right speaker on any aspect of engagement for your next event.
•  Mergers and Acquisitions. The Engagement Agency’s Mergers and Acquisition group focuses on helping organizations focused on people sell to the right buyer and on assisting engagement solution providers seeking an exit or merger. Contact Michael Mazer in confidence if your company is potentially for sale at 303-320-3777.

Enterprise Engagement Benchmark Tools: The Enterprise Engagement Alliance offers three tools to help organizations profit from Engagement. Click here to access the tools.
•  ROI of Engagement Calculator. Use this tool to determine the potential return-on-investment of an engagement strategy. 
•  EE Benchmark Indicator. Confidentially benchmark your organization’s Enterprise Engagement practices against organizations and best practices. 
•  Compare Your Company’s Level of Engagement. Quickly compare your organization’s level of engagement to those of others based on the same criteria as the EEA’s Engaged Company Stock Index.
•  Gauge Your Personal Level of Engagement. This survey, donated by Horsepower, enables individuals to gauge their own personal levels of engagement.

For more information, contact Bruce Bolger at Bolger@TheICEE.org, 914-591-7600, ext. 230.

Enterprise Engagement Resources
Engagement Solutions

EGR

BCAT

CarltonOne

LowerMyShowCosts.com

BMC

FLG