Helle Bank Jorgensen: Boards & Sustainability; Turning Intent into Impact

In this episode of Governance Watch, Gavin Hinks speaks with sustainability and boardroom expert Helle Bank Jorgensen about how corporate governance must evolve to meet today’s complex challenges. As boards face growing pressure to embed sustainability, respond to geopolitical uncertainty, and prepare for systemic risks, Hella argues that courageous stewardship, continuous learning, and a shift from oversight to foresight are essential. Drawing on insights from the Board Intelligence Board Value Index and her work with the World Economic Forum, she highlights the need for boards to move beyond box-ticking and embrace a proactive, purpose-led approach to value creation.

Transcript

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Hello, and welcome. My name is Gavin Hinks, and this is the latest edition of Governance Watch, the podcast about all things corporate governance from board agenda. Next month, corporate leaders will meet at Davos for the World Economic Forum's annual shindig among the snows, climate change permitting, of course, to hear from leading thinkers and speakers on the big issues facing the world of business. US efforts to disrupt the international order will no doubt be a massive topic, but so too is sustainability. Davos wants business leaders to talk about the need for bolder commitments and innovative solutions. Importantly, it also wants corporate leaders to consider building prosperity within planetary boundaries.

Now with us to discuss these issues and much more is sustainability and boardroom expert, Hella Bank Jorgensen. Hella is global managing director of board development at Board Intelligence, founder of the consultancy Competent Boards, and author of this year's massively best selling book out now in Korean in Seoul, Future Boardrooms, How to Transform in Turbulent Times. Usefully, Hella is also a member of the World Economic Forum's expert network for corporate governance. Welcome, Hella. It's funny, isn't it? Those snows in Davos, if they didn't show up, it would be a kind of a wake up call for the business leaders gathering there in January.

That is correct. And good to be here, Gavin.

Thank you very much. Well, look, we've been talking about corporate sustainability for a long time. Perhaps you can give us an idea about the state of business efforts to play a role in sustainability and the climate transition right now.

Yeah.

I think we can say we are no longer in this awareness phase that we perhaps have been in a long time. I think today, boards are either embedding sustainability into decision making or they are being left behind.

And I think I can say that the numbers are starting to show it in the recent board value index that we just published from Board Intelligence, it was only thirty three percent of directors in the UK and North America that saw their boards as essential tools for value creation.

From my point of view, that's both a concern, but it's actually also a wake up call.

What gives me a little bit more hope when I look at that is the appetite for upskilling and board development, where the survey also shows a director pointed to board development areas that would add most value.

And you're not going to be surprised, cyber resilience, digital transformation, AI oversight, crisis preparedness, but also stakeholder engagement and trust, sustainability and climate governance. And to be honest, further down the list, geopolitics that I was a little bit surprised about.

But I have to say that the state of business efforts, as you're pointing to, perhaps is very uneven at the moment. We're seeing leaders, we're seeing followers, and unfortunately, laggards.

I believe the laggards will perhaps receive more invoices, not only from mother nature, but also from the generation that is now growing up, nervous about their future. So what matters now and also will be mattering in Davos, is how boards accelerate integration, especially as these stakeholders, including mother nature, grow more impatient for real action.

Thanks for that assessment. I'm really intrigued because, obviously, over the last few months, the last nine months, we've seen a bit of a reordering of, the international order. Geopolitics is now playing a massive role in business thinking, and there's a certain amount of well, a huge amount of unpredictability in international trade now. I wonder if that's pushed sustainability down the agenda for those who are concerned or made it less of a priority for those who were perhaps not entirely engaged with the process in their organizations.

It's it's interesting because I think that you're seeing that those boards, those leaders that understood the value, that understood that this is not just something on the side, this is something that's integrated into business. They're continuing. You have leaders that might have said, well, everyone else is doing it, so we also need to, but we haven't really had that discussion around the boardroom table about the value it's creating or the value it's destroying if we're not doing it.

And therefore, it's like easy to just cut away. And that's where I think if again, if you look at the dialogue also in Davos and what we are going to be talking about when it comes to understanding stakeholders, what is that's really going on.

Actually, that's where you're going to see this spirit of dialogue. And I think we are going to see that there is a need for boards to shift from statements of intent to more system level action.

And again, you know, you heard me say it before, but in terms of this invoices that I see now for past inaction, being that on climate, being that on nature, being that on sustainability, that's being delivered in real time. I mean, to the news, listen to the insurance companies.

And I think that the boardroom is where those invoices will be opened, understood, and hopefully responded to.

And again, thinking about as you're saying, this change that we've seen this, well, last years, I guess I should say, but especially last year, I suggest that boards are thinking about this before the insurance companies decide that the assets are no longer insurable. And well, if the companies go bankrupt and leave it to governments and therefore taxpayers, you and me, to pick up the bills. So I think I see, and again, that's perhaps more the boards that I'm working with that are embracing the idea that they are architects of future prosperity, not just protector of quarterly returns.

But again, I think they also the ones that say we act with urgency, we act with courage to better cooperate in this contested world, unlock new sources of growth, deploy innovation, invest in people and build prosperity within the planetary boundaries as you also started with.

Now, as I understand it, as part of the expert network for World Economic Forum, you were consulted on the biggest risks facing business. I wonder what can we ask you what you told the the forum? What is it you you warned them about?

Well, I mean, I'm I'm not the only one being asked. But Yes. Yes. So there are unfortunately many risks.

However, I think what I'm saying, not just what I said, but what I'm saying is that the greatest risk today is actually governance that's unprepared for complexity, for all of the uncertainty. And if I can explain, if you look at it, climate change, AI disruption, geopolitical tensions, cyber attacks, societal politicization, these are all the risks that we are being asked about.

But they are not isolated risk, they are interconnected, they are compounding, they are accelerating. And the same time, governance models, or at least most of the governance models were built for a simpler world. So I think we all need to think in terms of systemic risk and systemic opportunity.

And I think we as leaders, we as board members must develop foresight, not just oversight. We must be willing to question old assumptions and build what I, in the book, called the ten Cs of future ready governance in things like courage, collaboration, critical thinking, clarity, curiosity, continuous learning.

And and the thing, Gavin, here is that whatever we learned five years ago, we might need to unlearn now or relearn in a different way.

I've said it a few times that just because we can now walk on earth and know exactly how to do that, does not know that we know how to walk on the moon or So I think all the board members I work with, they are eager to be lifelong learners.

And I have to say, I love it when I see the impact, when I, when we share insight from the best mind in the world with them.

I want to come on to your book here in a moment, but you said a really interesting thing about dealing with complexity. And I wonder if I'm a board chair, I'm probably, quite an intelligent person. I regard myself as an intelligent person, but I might have some doubts about whether we and my fellow directors, board members are fit for purpose when it comes to that complexity. Are there some clear indicators that myself and my colleagues are not ready and we may have to do some remedial work to get it sorted out?

Yes.

As you also know, I do do a few also board evaluations. And and I I think if if we don't have curious board members, if we all sit and not to whatever else is being said, if we don't have people that dare ask uncomfortable questions, If we don't have the insight that we need not to understand everything in-depth, but to ask the relevant questions, I think you need to look at boardroom compensate or who's around that boardroom. You need to look at the skills matrix and decide who should be in the future boardroom.

And that can either be, you know, by upskilling or it can be by ensuring that you get the right people around the boardroom table.

And do I look at my skills as the chairman? Do I look at whether I'm creating the culture that allows all those things to happen you've just mentioned.

That's what the wise chair would do.

One of the chapters in the book is about the wise chair.

And clearly, yes, both you and I know that the chair setting the tone, and that's where you need to have that three eighty degree of more on really understanding what's the impact and what is the culture that you're creating in that boardroom. And again, back to the survey that board intelligence we just put out, showing that there is opportunity for creating more value from the board members. That's the board directors themselves answering the questions.

So lots of holding that mirror up in front of yourself and using the insight that you have. And by the way, another finding in the survey is that there's a lot of boards that apparently are looking more at their board assessments, board effectiveness reviews as a tick box exercise compared to actually development of the board. That's leaving money on the table.

Why do why does that happen very quickly? Because these boards are all full of very intelligent people. They share they surely know the importance of performance. Why why do they fall into tick box exercises instead of taking a substantive look at themselves? How does that happen?

I think it happens because we all are in a situation where, as you were saying, we we're bright, we know a lot of a lot of different things.

And it's hard to have that mirror in front of yourself. But that is exactly what we need to have the board directors, to have the chairs that is going to put us to the next phase of that company's life and really understand what is bringing value and what's destroying value.

I don't think we do it enough because we always have something else. And that something else is not less today, know. Just yesterday I was out with a lot of board members and talking quantum technologies.

And you have people like, Oh, what now? What is that now? And I'm like, Well, we've had as part of up skilling program at competent boards for the last many years, but there's a lot of board members that haven't heard it until now. So you always have that, oh, I need to catch up instead of being prepared.

And that also means that you're reacting instead of being proactive. And I think that goes back to why don't we as board directors, why doesn't the boardroom, the chair see all the feedback they're getting as development opportunities?

It's because there's so much else.

But that's, it's kind of like shooting yourself in the foot because you're getting all of the advice, all of those things that can make it even better, but you're not using it.

Well, I think that raises a really important question about fatigue in the boardroom with everything that's hitting their agenda at the moment. But let me let me leave that for a little bit later. Let me come on to another question now. Your book, Future Boardroom, makes a case for boards playing a significant role in sustainability. And part of that case is the adoption of the concept that you call courageous stewardship. Perhaps you could tell us what that concept concept means and how it's applied and the difference it's going to make.

Sure.

Yes.

Courageous stewardship, in my mind, is about using your influence as a board director or as we just talked about as a chair to serve both the company and the society, actually the greater good. It's not about being a hero, it's about in my mind, honesty, foresight, it's about integrity, it's about being a steward of the future, my first book was called, steward of the future, not steward of the past.

And right now, I think we are seeing societal expectations shift very rapidly.

We're seeing stakeholders, especially the younger generations that expect that perhaps not boards, but companies, which kind of like would be the board directors to step up. And I think that requires that courage, the courage to ask these difficult questions, to challenge the business as usual, to lead with purpose and not just profit. One of the things I'm saying a lot of in a lot of boardrooms at the moment is that we perhaps have been discussing what's the purpose of the business, but what's the purpose of the board?

And I think there's a It's also a question about that delay is no longer a neutral thing. It's like, well, we can delay decision about ABC, but that's not you can't really do that because inaction has this cost and the courageous leadership and this courageous stewardship is the antidote of kind of like just saying, well, you know, we'll have to look at that later. Because later is perhaps for a lot of things too late. But we at the same time, we have this tendency that we react to things instead of being proactive. And what I'm hoping that we're doing is to help the boards, help the leadership be proactive, see what's coming at us so we can plan and have the resilience instead of just reacting and perhaps reacting in a way that's not helpful neither for the company or for the society.

So being courageous is also a question about us with the chair, really having that ability and the courage to look at both yourself, but also look at your fellow board members and to look at the business and to look at what is it really why are we really here?

I think that's a fascinating question, that issue of the purpose of the board because my assumption is and I'm an outsider. I'm not a boardroom member. No one would allow me.

No one would put me on the board of a birthday party, let alone a big company. But I guess that question of purpose is something that's assumed. Everyone walks into their boardroom meetings or joins a Zoom call assuming that they know what their purpose is.

But it strikes me that there's potential there to get it wrong enormously and that it's your activity on the boardroom in the boardroom, sorry, could end up very, misdirected unless you're very clear about what your purpose is.

Is that your experience?

But also having the discussion with with your fellow board members.

Yes. Yeah.

Are we here to leave this company in a better place than when we started?

Most will say yes, but what does a better place mean?

Are we here to, all of us, to contribute with our insight and our foresight on different areas and having a real discussion?

Or are we here to sit and say yes?

Are we here to ask the questions that my question is better than your question?

Some the board members I've worked with once said, well, sometimes it feels that we have competitive boards, where you put my good Canadian in me saying elbows up and saying the person next to me, my question is better. We're not listening to each other. So there's a lot of things where just having that conversation within the boardroom, and I have seen it now many times, how much it gives every board member to understand that, yes, my voice is actually worth all of the time to bring the questions that I'm thinking about into the boardroom. But it is also for the chair to have the role of saying, well, let's have that discussion, but we also need to get to a decision. So it's a fascinating but so important governance function.

But if we don't have the conversation about what does good really looks like, well, you can have a lot of people believing they are all doing good, doing what they should, but without actually going in the same direction. The other thing, and Gavin, you know that, that I say, you do not sit on a board, you serve.

And I think that's another discussion that is worth having around the boardroom table. Why am I here in the first place?

What is it that I'm hoping that we together as the board can bring to this company and to bring to the society that this company is part of or is.

Now the book also places a heavy emphasis on skill sets, boardroom skills. And I wonder if you can just tell us about a bit about where you think boardroom skills are and where they need to be.

Sure. I mean, when when it comes to boardroom skills, I I think we need to look at the skills such as, you know, of course, finance, AI, cyber security, digital ethics, geopolitical uncertainty, all of those things.

But I also think we need to look at the softer skills that in reality not soft. And that's where I'm talking about these ten Cs, where it's everything from courage that we talked about before, but also compassion.

Also having that couriers thinking, but also critical thinking. It's all of those things that you need to look at it in the skills matrix. But you also need to figure out what is not only the skills for today, what is the skills for tomorrow? So often when I look at skills matrix for companies and for boards, it's not just saying, okay, tick mark, tick mark, tick mark, we have those skills?

It's also how do we work together as the board? And how do we ensure that the strategy of today and the strategy of tomorrow that we get the right board members in play. And that's not something again we should do by looking backwards. It's something where we need to be proactive and say, if this is the strategy we're looking at, what kind of skills will we need?

Where do we find those skills? How do we ensure that they will serve the company and and and the board?

Helle, let me play devil's advocate for a moment because directors may be listening to this and what you've just said about those skills from courage to compassion. And they may think to themselves, hang on. We're living in a new world.

It's been entirely disruptive. It's unpredictable. There's lots of uncertainty. Competitiveness is now my guiding star. I don't have time for things like compassion. We've got a bit this is a moment for a very hard nosed approach to business. What what do you just say to someone who might be skeptical in that way?

I heard that. I heard it a few times.

I also heard that where decisions are made without compassion, there are consequences.

And those consequences will come after the fact.

And I never seen anyone that kind of like not having that, you need to have the strong points, you need to make your decisions with courage, but you can go out with compassion and communicate that. Just take the examples of people that leaders that fired people by sending out a message.

Right?

How did the world react?

It got front of newspapers, etc, etc.

And so if you've had a little bit more compassion in that understanding who is on the other side, you are actually getting to results, but with a totally different outcome.

So I think that compassion is more important now than ever, especially because we're living in this world where everyone is fatigued.

And where I think we have lost that compassion, that love, if you can put it like that, for what is it that we are why are we both around the boardroom table is because of the of the the business, but also why are we doing what we are doing is to make sure that that business is even better.

You can't do that without having the license to operate. And the license to operate you get from also having that reputation and the compassion on what it is that means something for your stakeholders.

Now we've mentioned a few times, we we both said it, the word fatigue affecting boardroom members because so much has happened, in recent years. We can easily list them. I won't list them now. We will know what they are. How does a board member guard against fatigue and remain focused on what's important and what's important in your view?

Some of the things I've seen is that fatigue sometimes comes when boards feel they have to know everything, and hey, I can't blame them.

But they don't.

What I think they need is, going back to my Cs, is also clarity, that curiosity, and a structured way to engage with the complexity and of course, continued upskilling. So we need to help and that's what I'm hoping I'm doing, help boards focus on asking better questions, equip the boards with tools and insight to move from this being reactive to being proactive. And again, the best boards that I see, well, they build in scenario thinking, they build in future trends in deep dives, not in chaotic ways, but as part of the yearly board cycle of rhythm.

And I think that reduces fatigue, but it not only reduces the fatigue, but it also increased the insight. And the thing is that you're continuing to learn.

When I see the Compassion Boards alumni, now in sixty countries, we meet on a monthly basis and we learn and discuss together. So when you start hearing, Oh, it's not only me that are debating this.

When you start hearing others that also are struggling or found a solution on something, that's where some of that fatigue can go away and you go like, okay, yeah, let's solve this together. Let's get to a better situation together.

And that's going back again to where you started with the WEF and that having stakeholders and understanding each other and having that dialogue, I think that's going to be more and more important, especially in a world where we're also talking about AI a lot and what are the decisions do there.

Now I didn't prepare you with this question, but I'm gonna go ahead with it anyway. We're coming to the end of our time in this interview. We're days away from Christmas. I can't wait to get there.

I'm sure everyone else is dying for a break as well. What's the Christmas present you think board directors should give themselves? You're not allowed to say your book would we'll assume that everyone is going to get the book anyway.

But what kind of maybe a conceptual Christmas present you think board directors should give themselves?

I think they should give themselves a good break. But during that break, I think they should have a good look at their skills matrix.

I think they should audit their own skill set, not just for the current needs, but for the future demands.

I know I'm not allowed to say about the book, but perhaps look at these ten Cs that I included in the book, kind of like look at what is the world we're operating in now, what is the world we're operating in twenty twenty six and years in the future. And how do I as a board director prepare for that, so I don't react, but being proactive.

So yes, that that and then continuously education. I'm not allowed to say competent boards either, am I?

And so That's fine.

Thank you very much for that. A very useful exercise, Perhaps not best done with a Christmas hangover, though. I that's my piece of advice to everyone. Hella Bank Jorgensen, thanks for joining us today on the Governance Watch podcast, and thanks to everyone else out there for downloading and listening in. I've been Gavin Hinks. Goodbye.

That was Governance Watch brought to you by Board Agenda, your hub for expert insights, governance intelligence, and boardroom thinking.