War in Ukraine: what actions can boards take now?

By hellebankjorgensen

War. What is it good for? Absolutely nothing.

Events in Ukraine have shocked the world. That country’s people have rallied and shown tremendous courage against the odds. President Volodymyr Zelensky has risen to the occasion in a way that no one foresaw; he has shown all the attributes of true leadership.

In this rapidly evolving, complex and tragic situation, everyone is asking the same question: what do we do now? Humanitarian aid? Military aid? Sanctions? Protests? The list is endless. 

It is so hard to say to people — take your time and breathe — when we don’t know what President Vladimir Putin is going to do next. A hand that close to 6,000 nuclear buttons that is wielded by someone with bad intent is extremely worrying.

We gathered together many of global Faculty members and alumni earlier this week on a Zoom call to address this question from a board member perspective. Board directors are stewards of the company and its assets, and stewards of its long-term health. 

Our attendees shared many nuggets of collective wisdom in a wide-ranging and in-depth discussion. Here are 20 of the top insights, observations and takeaways:

1. In terms of ESG language on boards, the S in ESG is a responsibility for those who are suffering in Ukraine. We need to see board commitments to their workers and clients.  Food and essential services need to be secure; workers, communities, and customers need support. 

2. It’s not about replacing fossil fuels, but reducing our dependence on Russia and its fossil fuels right now. Hydrogen, wind and other sources of energy come into play, as well as nuclear energy. We need to “unmothball” the nuclear plants. Unless we invest massively in nuclear as fast as possible we do not have a chance to reduce emissions. But this will not be popular. In fact, it will likely lead to a lot of protests.

3. Look everywhere at all the little things we can do as individual governments and also as companies to support the Ukrainian people.

4. Security threats are rising so we need to be hypervigilant. Make ransomware and other IT defences a priority for your company. For those employees in Ukraine: forget about business, your safety is paramount. For example, pay salaries in cash in case the banking system fails.

5. Looking at your suppliers: who do you deal with? Are they under sanctions?

6. Help employees and their families get out of the Ukraine, and accelerate the logistics of getting supplies in.

7. Immediacy is critical. Half a million people have left Ukraine. Others will be looking to traffic and exploit those victims of war. There will be immense numbers of Ukraine victims of modern slavery and human trafficking. That’s not including the 3.5 billion people who will soon be forced to move because of climate change given the recent IPCC report.  

8. The challenge for boards is huge. This is a complete system rethink. The system is broken. Political, military, corporate; everything. Across the spectrum, you’ve got to rethink everything.

9. This is something we could have anticipated but did we build in these scenarios? No. Can we now? We must stop being reactive and get more proactive. If this crisis and energy implications catalyzes proactive thinking, then something positive can come out of this. Boards are good at the short-term view, but not at the long-term.

10. We need to end our collective dependency on fossil fuels. To do that, we need creative and fast solutions and we need business leaders to engage more with politicians. 

11. You must take your financial and non-financial info next to your ESG factors and integrate them, because in the real world, these things are not separated. They are integrated 24-7. We need to think on this integrated basis and report on an integrated basis. Responsibility, accountability, fairness and transparency cannot be looked at independently.

12. Boards should form committees that address systems risk. If there’s a steward of that function, think systematically about risk and nothing but risk. How will these events affect your company?

13, Whatever we committed already regarding coal, going green, we now need to see serious action in budgets and measurable action by the business sector. These commitments will all be subject to scrutiny from now until COP27.

14. Companies need to listen to their stakeholders. Corporates are responding more than we’ve seen in the past. The effect of stakeholder governance is kicking in; they’re seeing what their stakeholders are commanding and they are responding. We should commend BP and Norway. Companies are responding in ways that are helping Ukraine.

15. Renewables will never be enough. Solar and wind energy are not reliable as sources of energy. We cannot have intermittent supply in powering the planet’s systems. Nuclear energy is the only clear answer to the needs of the planet. Blue hydrogen could help, too.

16. Large public sector boards in significant sectors such as mining and energy need to come together and develop common strategies to make a real impact. They must develop a strategy that wipes Russia out of the equation in terms of dependency for supply.

17. Insights today in the boardroom are so dominated by analyzing financial data about the past. Can boardrooms continue to be satisfied with just audited financials that reflect policies for strategies without ESG embedded at their heart?

18. The chairs and CEOs of the top 1,000 global companies should publish open letters to Putin (or sign a collective letter) advising that they will withdraw from all activities in and in connection with Russian business within six months unless Putin withdraws. Boards should look to safeguard their own employees and provide support to the humanitarian crisis while urgently evaluating and addressing the direct impacts on their own business. Companies have to come down on the side of what’s right, even if it’s not easy or comfortable.

19. Mental health problems are growing fast. The latest IPCC report identified it as a crisis. This war will not help mental health issues.

20. We need stronger leadership from all leaders in corporations and governments to support peace and work together as humans, not countries.

Helle Bank Jorgensen is CEO and Founder of Competent Boards. Connect with her on LinkedIn.

War in Ukraine
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