On August 12, the U.S.-Japan Council hosted a conversation on the effects that the COVID-19 pandemic has had on existing board governance norms and ESG (Environmental, Social, and Governance). While the pandemic has been described by some as the great equalizer, in other ways it has laid bare the vulnerabilities inherent in our societies. Various groups – minorities, low-income households and women, among others – have suffered disproportionately as a result of the pandemic. It has become clear that previous corporate initiatives to address these inequalities, while well-intentioned, need to be bolstered going forward.
To discuss how best to further ESG initiatives and foster a strong and accountable board, USJC invited three experts with different insights into the process. The Council welcomed Bonnie Hill (Co-founder of Icon Blue; Board Member, Banc of California and the RAND Corporation), Marcus Otsuji (Japan Country Manager, Geodesic Capital) and Council Leader Genevieve Shiroma (Commissioner, California Public Utilities Commission; JALD ’11) to lend their thoughts. The conversation was moderated by Council Leader Ako S. Williams, who serves as Vice President, General Counsel, and Corporate Secretary of Ushio America, Inc.
After introductory remarks by USJC President and CEO Suzanne Basalla, the webinar kicked off with a broader discussion on some of the recent issues regarding ESG. “I think some of the hot button issues are that, first of all, that we see all people as equal. We have to start there.” Dr. Hill said. “Related to your discussion around the George Floyd issue, if we begin to see all people as equals, then we will think about the other social issues that are very important.” Ms. Shiroma concurred with this point while also highlighting the effects the pandemic has had on the California Public Utilities Commission’s (CPUC) efforts to provide essential utilities to the people of California.
The conversation then shifted to how board governance and corporate ESG initiatives can look ahead to minimize the disparate effects of future crises on at-risk groups. Ms. Shiroma began by touting the CPUC’s past efforts to benefit vulnerable groups while also acknowledging the need for both reactive and proactive action in the future. “[At the CPUC], we’ve taken the view that if we do look out for our vulnerable communities, our access and functional needs communities, then that will lift all boats. We require through state law that the investor-owned utilities invest in diverse suppliers,” Ms. Shiroma stated.
Adding to that, Mr. Otsuji presented an analogous view of the Japanese workforce and the struggles Japanese women face in a corporate environment. “There’s a huge push right now legislatively and also culturally to do the work finally to make the workplace a place that’s more friendly to women. Part of it is legislative…There’s also existential pressure from society. […] But most importantly, I think, is social acceptance. […] Even in the last 18 years since I’ve been here, there’s been a huge shift in just the acceptance of women remaining in the workforce after they get married, after they have kids. And I think that, more than anything, is going to drive better conditions for women in the workforce going forward.”
Finally, the speakers offered their thoughts on how diverse board competition can lead not only to increased preparedness against future crises but also to sustainable growth. Mr. Otsuji reiterated the correlation between high-performing companies during crises and their respective ESG ratings.
Dr. Hill, a 26-year veteran of corporate boards, concluded by re-emphasizing the importance of diversity and also board turnover to help corporations stay more flexible and proactive in addressing ESG concerns in the post-pandemic future. “Now, you know, there was a period of time when boards would say, well, we just can’t find anyone qualified. Well, that has been disproven. You can find qualified people of different ethnicities, or race and genders.” Dr. Hill said, and stressed the importance of a board succession plan that incorporates race, gender and ethnicity.
Click here to watch the webinar.
We would like to thank our platinum sponsors fabbit and the Ford Foundation, as well as our title sponsors the Central Pacific Bank Foundation, Hitachi, Ltd., ITO EN (North America) INC, Mitsui & Co, Ltd., MUFG Union Bank N.A., the Terasaki Nibei Foundation, and Toyota Research Institute for supporting the U.S.-Japan Council’s activities in 2020.