Taking the Pulse of the NACD
This podcast is based on EisnerAmper’s annual survey results, Concerns About Risks Confronting Boards, which examines key issues arising in today’s boardrooms. In this segment, EisnerAmper partner and Chief Risk Officer Peter Bible shares some insights regarding his recent roundtable discussion with members of the National Association of Corporate Directors—particularly in the areas of human resources and educational diversity.
Dave Plaskow: Hello and welcome to EisnerAmper’s podcast series on Concerns About Risks Confronting Boards. This is based on EisnerAmper’s annual survey that gains insight into the issues that are top-of-mind in today’s boardrooms. I’m your host Dave Plaskow. With us today is Peter Bible, EisnerAmper Partner and Chief Risk Officer. Peter, welcome back.
Peter Bible: Thank you Dave, good to be here.
DP: Now Peter, based on your recent discussion with members of the NACD, the National Association of Corporate Directors, there seems to be a lot uncertainty regarding the incoming U.S. administration. Are there some proactive steps that boards can take?
PB: Yeah, thank you Dave, yeah, there was a lot of… a lot of angst in the room. But I think what I encourage people is to stay calm and keep your eye on the ball. You’ve got to remember you’re dealing with boards now that have invested hundreds of millions, if not billions, of dollars overseas in places like China and Mexico to name two popular ones.
PB: And, you know, now they’re hearing that there could be a 35% tariff on goods coming out of those countries…
PB: … and so the notion of the economic unviability as well as the, you know, the financial implications of that, I think it frightens people.
DP: Sure, sure.
PB: But I think with every, you know, with every set of new circumstances come good and bad and it’s trying to focus on the good.
DP:Yup, yup, look for those opportunities.
PB: Right, absolutely.
DP:Now the NACD members have indicated that human resources is a growing area. Can you elaborate on some of the concerns they have there?
PB: Absolutely. One big concern is – and it’s been going on since the ‘90’s – that jobs have been filled outside the United States and the technology in the plants is so much more sophisticated than it had been so you literally have what I’ll call a lost generation of U.S. workers who don’t have the training in the current technologies used in some of these assembly plants, or whatever the operation may be. So, the issue is if we bring all these jobs back to the U.S., how do we get the workforce up to speed as far as, you know, the knowledge to operate these facilities.
DP:Right, right, right. From what I understand it’s not so much the companies – like Carrier was going to go to Mexico – it’s not so much we’re losing jobs that way, but via automation.
PB: Exactly, that is correct.
DP: Yeah, yeah. So another area Peter that NACD members explored is the concept of diversity among members in terms of their education. How do you feel this impacts Boards?
PB: Well I think diversity is very important Dave but I think people view diversity in what they see, being gender, race, ethnicity. I think the key is diversity of thought.
DP: Ok, interesting.
PB: The more diverse thoughts you have around the table, the more productive I think the discussion will become. So I think what I heard coming out of the NACD meeting is that, you know, you need an educational spectrum, you know, that scans the board – said another way, diversity of thought.
DP: Sure, sure, that’s an interesting concept. Now you’re in the thick of it Peter, you have your pulse on what these boards are talking about. What keeps those board members up at night?
PB: I think it’s the – here again – it’s the speed of change that technology enables, and I think when you have something set, let’s say we’ve invested, you know, $100 million in an assembly plant in China and it’s functioning at a very high level with a high degree of technology and literally overnight that may become obsolete…
PB: … because of the election. I think it’s just the way technology enables things to be done a lot quicker and a lot faster and the word to get out a lot quicker and a lot faster and I think that speed is what keeps people up at night.
DP:Sure, sure. Well Peter, thanks for this great insight.
PB: Well thank you.
DP:And thank you for listening to the EisnerAmper Concerns podcast. Visit EisnerAmper.com to read our blog about this topic and to get other key findings from our 2016 Concerns About Risks Confronting Boards survey.
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