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John: Welcome to another edition of the Impact Podcast. I’m John Shegerian, and I’m so honored to have with us today Debbie McCormack. She’s the Global Board Effectiveness and Sustainability Lead at Accenture. Welcome, Debbie.

Debbie McCormack: Thank you so much, John. I am delighted to be here.

John: Well, we’re delighted to have you, even though we’re not in the same city today. You’re in beautiful New York City. I’m in beautiful Los Angeles. But that’s the wonder and greatness of technology that gets to connect us. We get to have you share your journey and Accenture’s journey in sustainability. Before we talk about all the great work and important work that you and your colleagues are doing at Accenture in sustainability, I’d love for you to share a little bit with our audience about your backstory. Where’d you grow up, and how’d you get on this very fascinating and important journey that you’re on in terms of sustainability?

Debbie: Well, thank you for that. I actually am a military brat, believe it or not. My father was in the Air Force for 20 years, and I say the tail end of his journey, as we moved from New York, where I was born, to Colorado, up to Washington State. I mainly grew up in Washington State, which is also where I ended up going to college at Western Washington University. For those of you who don’t know where it is, it’s up on the U.S.-Canadian border. It is beautiful. It is honestly the only place I personally have ever seen the Northern Lights.

John: Wow. Beautiful.

Debbie: Yeah, it was amazing.

John: Then after school, what’d you go into after school? What was your first job?

Debbie: I got an accounting degree, and I went to a local accounting firm there in Bellingham, Washington. From there, two years later, I got an opportunity at what now was a Big Four, and worked at that Big Four for very many years before joining Accenture as their global board effectiveness and sustainability lead.

John: That’s a mouthful, that title.

Debbie: Yes.

John: When I started this podcast in 2007, it wasn’t even a podcast, actually. It was a radio show. There was no such thing, really, Chief sustainability officers were few and far between. Now, there are all sorts of great titles that include sustainability or impact and things of that such. What does that title mean in terms of what your role and duties are on a daily basis at Accenture?

Debbie: That is a great question. I have to say that the merging, if you will, of board effectiveness with sustainability is purposeful. We truly believe here at Accenture that leadership and organizations, it is very important for them to think sustainably and at that leadership level. Working with the C-suite, as I have my entire career, I was in the boardroom as a very young professional auditing some of the largest electric and gas utilities, not only in North America but in the world. I was speaking with the board. You know that when the board is making a decision and they approve something, the company is going to go forth and follow that.

That is something that we at Accenture know very well, that when the leadership is driving the decisions around sustainability, the goals, the targets, what we’re doing and how we’re doing it, and the board approves that, the board is going to hold management’s feet to the fire. Combining that board effectiveness and what it means to be a high-performing board member with that leadership and organization and making certain that those two are tied together is something that I’ve been doing my entire career. I thought it was normal and apparently, this is something that’s rather new, tying these two together.

But it’s been the right time, I believe, to do this. Accenture, we made a commitment to the marketplace in about 2020, saying that we were going to go out and invest a billion dollars in sustainability, and we are. It’s something that we are embedding into every piece of work that we are doing, including our own leadership, but then also the leadership of the companies that we’re working with.

John: Wow. Walk me through what this means. Do you go in when you’re consulting with a certain organization, or will you go and sit and audit the board minutes and look at the last few quarter board notes when you’re starting a new assignment to try to understand the flavor of the board’s involvement and what they’re looking for before you even weigh in with what you think is important types of topics that they should be talking about and giving some leadership tips on?

Debbie: Thankfully, I have not audited now in over 20 years, which I am so delighted to say. I get to help board members become effective in various ways and part of it is sustainability-focused. But we also do work with number one, I do work with executives to help them understand what the role of the board is, whether it’s in sustainability, if it’s in technology and Gen AI, what does this look like and what does it mean? I get to do that. Whether that’s assessments and evaluations, if that’s helping them work through some very difficult problems, helping them with their strategy day, or one thing that we do here at Accenture very well is education.

I think we’re going to talk a little bit about that. But educating the board members, board members have so much on their plates right now and every day, it’s getting more and more complex. How do they keep up and what does that look like? That’s something that we help with from that effectiveness standpoint. I would tell you I have three clients, if you will, in the way that I do my work. I work with boards and I work with executives who want to be board members. But then I also work with executives who are communicating with the board and really helping the board be effective.

John: Yeah. That’s fascinating. Sustainability is in your title and I want to get into that. But how do you juggle some of the three most transformative topics that are right now we’re living with when it comes to advisory services to boards or executives or executives who want to become board members in terms of what we just saw happen last weekend with AI and Sam Altman and everything that’s going on in that revolution. Then you have the cybersecurity and the risks that come with cyber risks. Then you also have this, of course, this issue of climate change, and getting people on board to get net zero and to get sustainability baked into the DNA of any organization is really important as we see this generational shift from a linear to a circular economy. How do you even juggle those three topics in your advisory position? What do you do with boards and also executives who want to become board members?

Debbie: John, that sounds exhausting. That sounds really exhausting.

John: It’s exhausting for me to think about. It is.

Debbie: But it’s interesting when you think of boards and I am working with corporate boards, the boards of these public and large private companies, and really talking about what it means to be a high-performing board member. That is across, again, all of the different topics on the board. When we’re working with boards overall and talking about the different things that they’re looking at, it is leadership and governance. It’s integrity and ethics. It’s sustainability, technology, strategy, performance, operations, talent. Let’s not forget the talent, right?

John: Right.

Debbie: As you put all of this together, there are different parts that either each board committee or the board itself needs to look at. You asked me earlier if I go and I go and read the board minutes. One thing I do normally read about the boards to really understand how they work are their bylaws and the charters of their committees. The other thing that I love to go do, and I know that not everyone does this, but I love proxy statements. Proxy statements and the ESG report or the integrated value reports are where you can learn so much about what the organization is doing around the topics that you just discussed, right? Because cyber is part of the S in ESG.

John: That’s right.

Debbie: Talent is also part of the S, right? The human capital and what that means. The technology and the governance issues that people need to be working through and dealing with. That’s the G. The ES and the G is very broad. Oftentimes when I’m going to boards and we’re talking about what is ESG, we’re looking at this very large, I’ve got a great graphic of all the different parts that are included in this because most people just think of the E when they think of sustainability. They’re not thinking about the governance, the board composition, the human capital requirements, right? They think of the climate change. That is a huge part of it. That’s something that I know we’re going to talk about, but the S in ESG is so important, and how we focus on every aspect of that.

I will tell you that E, S, and G are all related. If you want to talk about net zero and we’re going to want to reduce the greenhouse gas emissions that we have, when you’re looking at this and you’re looking at your supply chain, then you have to think about what that means for the humans who are involved, right? Are we paying a living wage? Are we focused on the individuals and doing what they should be doing? Are we pulling girls out of school in third-world countries so that they can go and dig something out of their minds or create something for someone to wear? What does that mean and what does that look like?

Then G of course is that governance and the ethics that’s associated with how we’re treating these individuals and how we’re going to reach our own net zero. It’s really when you think about that and who’s going to approve all that, who’s going to set the strategy, the CEO and the management team, who’s going to prove it, the board, who’s going to hold management’s feet to the fire, the board. It’s all really related to cyber and technology and governance.

John: Strategy. Peter Drucker said culture trumps strategy all the time. What are your feelings on culture versus strategy when advising a board and advising C-suite members in terms of their interrelationship with the board and how that should operate, that fine balance of, as you say, high-performing board members versus board members that become distractions? How does that work?

Debbie: You’ve hit on some of my favorite topics because there are a lot of different terms that we’ve heard. I’m going to work backward, I think, on your questions. Number one, many times, I think you’ve heard the term, no zen fingers out, right? Board members should not be distracting, right? They need to be part of the oversight process. There’s this great graph, it’s called levels of board engagement. I’ll send this to you because right now, I’m forgetting the gentleman’s name who created a, obviously a genius, came, it’s old, it’s from like 2004. It shows that there’s this level of board engagement in the middle where everyone thinks they want to be. But there are times when the board is going to go and be what I’m going to call that operating board.

They’re going to get their fingers in a little bit more. Sometimes that’s because, I don’t know, maybe a cyber attack has happened. Maybe the CEO passed away or something happened and the CEO is no longer there and they need to dive in. There are reasons why the board does need to get more involved. But then on the opposite side is called the passive board. This is when people think, “That’s just a check-the-box board.” Nobody wants to be on a check-the-box board and no board should be a check-the-box board. But sometimes there are decisions that the management team is really empowered to make and they should be. The board should be able to just nod their head and say, yes, it’s part of the strategy.

It’s what we agreed to and that’s how we’re going to go forward. When you think about that, it’s a spectrum and the board is not going to be in one place always on this spectrum. They should be across it, across all of the different topics that are going on that day, that period of time. Because remember boards are only meeting four to six times a year traditionally as full boards. Then they’ll meet with their committees maybe eight or nine times. The culture question though, is a great one because there are two different cultures at a company. There is the culture of the company and the CEO is the one responsible for that culture of the company and the board should be paying attention to that. How do they do that? How does the board really understand what is the culture of the company?

Most boards here in North America will have the CEO as the executive member. Sometimes, it’s the CEO and chair, the same person in the boardroom, but they’re not hearing from other members of the management team on all of the topics that they’re discussing. There have been some companies that have been putting other executives, the COO, and the CFO onto the board as another executive board member just to get that additional flavor. But there are other ways too, the boards can do it. They have board dinners with the management team. They will meet with the team one or two below the CEO or his or her direct reports so that they can really hear about what’s going on.

One of my favorite board members would go and visit one of the companies that he was on. He could go and visit one of their, I’m going to call it a store every day. He did, he went to a different one, but he could start to feel what the culture of the organization was because he was visiting them. Culture, yes, very important. It is oftentimes more important than strategy, as Peter Drucker said, but there’s also the culture of the board. When you close the door in the boardroom, what is the culture in the boardroom? Do you hear everyone’s voice, right?

Just because they’re in the room and they’re around the table now, do you have one board member who’s doing all of the talking? Or does the lead independent director or the chair of the board, do they make certain that every person’s voice is heard on the topics of the day where they need to be making a decision? What is going on? You cannot overemphasize the importance of that lead independent director or chairman’s role. Part of that too goes to the board assessments.

Board assessments need to occur on an annual basis. There are three levels you can do that at. You can do it at the full board level, you can do it at the committee level, or the individual level, or you can do it at all three. You need to make certain that you’re giving feedback to the board members. Are they showing up? Are they actually reviewing a thousand pages of materials that management is working so hard to put together for them? Are they asking questions and are they asking really good questions in the room? When they don’t understand something, do they just let it go? Or do they actually say, “I’m sorry, I’m a little slow on this and maybe I need to take it offline and I need you to sit down and explain it to me, but I am not understanding what you’re saying?” Do they have the courage to do that? That boardroom culture is just as important as the culture of the organization, but you don’t always see it because it’s eight to 10 people in a closed-door room.

John: Right. For all listeners and viewers who’ve just joined us, we’ve got Debbie McCormack with us. She’s the global board effectiveness and sustainability lead at Accenture. To find Debbie and her colleagues and all the important work that they do with regard to global board effectiveness and sustainability, please go to www.accenture.com. In a recent Accenture report, Debbie showed that only a fifth of the companies that are on track for net zero, a fifth. If climate change is really happening, we all at this point, the science is in, climate change is happening. How can only a fifth of all companies be on track for net zero? How do you then take that information and make it actionable in terms of your leadership and mentorship of boards out there to tell them, hey, we got to get with the program here, otherwise there’s going to be a pain to be paid either vis-a-vis our client base, analysts, Wall Street, media, all the above. How do you take that information and make that actionable with boards then?

Debbie: All great questions. It’s interesting how we are brought in. There are times that the questions that you’re asking around the numbers, right? The numbers that only a fifth of them have. I mean, that’s 20%, right? If you would have come home from school with a 20% on one of your tests, what would have happened?

John: A big F at home and a big F on my report card.

Debbie: Yeah. Exactly. This is something where what we’re seeing is a siloed approach, right? The companies, nobody wants to be always the first mover. We are seeing some regulations that are starting to come out. The regulations start with some disclosures that are necessary. Many of the companies that have been making the disclosures have noticed then that they are not going to be able to make their own goals. What does this mean for the board? Is the board aware of this? Do they know this? What I tell my board members first and foremost, number one, do you know what your sustainability goals are?

If there are four of them, six of them, 12 of them, I don’t know how many you have, what are they? What are your goals to get there? How many years is it going to take? If you’ve made a goal for 2030 or 2035, what does your goal look like for 2023 or 2024, or 2025? The goal may not be, even though we’re going to be reducing our greenhouse gas emissions by X number by 2030, maybe this year what we’re going to be doing is getting all of our suppliers online, right? Because we know that to reduce our scope three, we need to make certain that all of our suppliers are helping us do this. Do they have goals? Do they have a plan in place?

How are we helping them and what does that look like? This year we might be getting all of our suppliers, which means that, “You know what? We might be going the wrong way.” Our greenhouse gas emissions might increase, but then going forward then from there, we expect that they’re going to decrease. You’ve got to have goals. The board members need to understand what they are, how we’re going to reach them, and what that looks like. They also need to be asking their executives the question, if we’ve made these goals and we don’t think we’re going to make them, why not? What do we need? Do we need additional resources?

Do we have the right talent? What talent do we have today? What talent do we need? Is this something that we can buy? Do we need to bring in additional people? Can we borrow it and bring contractors in? Can bots do this for us? I mean, gen AI right now is all the rage, even though predictive modeling has been around for a long time. Is this something that it can help us with? Or do we need to think about even if we outsource this, what does this look like? What do we need for success today so that we reach these goals?

What does that look like? For the countries that are starting to make more of the requirements and starting to set some goals for what the disclosures look like, especially for these public companies, how are you going to be able to meet these goals? What does this look like? This is where working with each member of the C-suite, right? It’s not just the CEO, it is the CFO. It’s working with the CHRO, the talent leads have so much responsibility now. It’s not just the job of the Chief Sustainability Officer, the Chief Information Security Officer, or the CIO. They need data. The technology is necessary to really meet these goals.

What does that look like? We did a study that talked about the fact that when we got the right technology with the right talent working together, the revenue per employee, increased by 11%. That’s not a number, especially right now, as we’re seeing all of these cost cuts needing to be going on right now. That’s not something that people should be missing out on.

John: Interesting. Part of that Accenture report talked about only a fifth of the companies being on track for net zero and also talked about a third of the companies being stuck in what is called in your report, decarbonization stalemate. Unable to make further investments in decarbonization due to economic conditions, externalities, et cetera. Plus there’s also been, in recent times, let’s just call it the last 12 to 18 months, a politicization of some of the terminology that’s out there.

Like even ESG has become somewhat of another one of these political footballs in the United States, red versus blue, which to me is just nuts. We’re all living in one environment, red, blue, green, doesn’t matter anymore. How do you get them over those hurdles of what was termed in your report, decarbonization stalemate, and get them on track with, first of all, the science of climate change, secondarily, the importance of investing in ESG and sustainability and making it part of their culture and DNA? I mean, do you have a roadmap or some expert tips that have worked time and time again, or is this on a case-by-case contextual basis that your work is so personal that it’s more a case-by-case contextual basis?

Debbie: For those who are listening in and wondering what we mean by that decarbonization stalemate, when I read this, I just started to laugh. I’ve got three kids. I didn’t tell you that, John. I’ve got three kids from 20 down to 16. At our house, we have what I call the war of attrition, right? If I say, “Hey, kids, go vacuum or go clean the floor, make sure the floors are all clean.” They could vacuum, they could use the best mop, they could use a broom, they could pick up the shoes, right? But not one of them is going to move until the other one does because why would they want to expend their precious resources, their energy, and their time?

When you think of the war of attrition around decarbonization, many of the companies are looking at some of the challenges around the fact that if they go and spend their very limited time and resources, they could be negatively impacted then at their next quarter earnings, right? When we think about what that looks like. When we say that the progress that’s been made is so low for not wanting to make that investment, we’ve identified three things that we think are going to be helpful. I put them under cross-collaboration, right? What does that look like, so we can talk about that? Reinventing that value chain and how we work together around the value chain.

Then really thinking about how we break down the silo by focusing on that nexus of technology and talent. Because if the technology and talent aren’t working together, even if this is where we don’t have the right technology, that’s a problem as well. But we need the right technology and the right talent working together. That cross-industry collaboration, that one of the reports that you have been mentioning has been a great one, the power of change. It’s just brand new that we, and look, I have not copied here because I’ve been referring to it so much.

John: Yeah.

Debbie: We talk about the heavy work or the work that needs to be performed in heavy industries. That is specifically around things, like steel, cement, mining, chemicals, freight, and logistics. What it looks like for the industries to come together, to work together, to think about how they can reduce their own greenhouse gas emissions and to decarbonize. Because it’s not going to work for one company to only be the one to do this. We are going to have to work all across the industries, which for me, and in my career, I grew up in the energy industry, as you know, I audited, again, those utility companies.

There are associations that can be very helpful in bringing these organizations together, and they are. There are groups that can also start to think about what working together looks like. This is where it’s very important that there’s no improper collaboration. This is collaboration for sustainability. This is collaboration for good. What does it look like when we’re working with the suppliers as an example? How do they get the right ingredients, if you will, for their widgets?

I don’t want to pick on any of the companies that I’m working with, but when I see one company that is going to be able to figure out with their suppliers what they’re going to be able to do, that supplier’s then going to be able to take it elsewhere, which is, again, why there’s the stalemate because no company wants to lose that competitive edge. They’re all trying to figure it out on their own right now, and it’s going very slowly instead of moving forward faster by working together.

John: That’s right. Yeah. They’re benchmarking themselves against the competition. If the competition is stalled on these practices or just ignoring these practices, they’re more apt to also not embed these into their culture just yet or into their DNA.

Debbie: That is exactly right. It’s interesting that we were doing some studies around perceived trade-offs. The executives, the senior executives that we spoke to, and there were almost 1,500 of them, told us that it was a much bigger challenge for them to do nothing than for them to go and start to invest in sustainability. Yet you see these winds of change coming because they don’t want to get too far ahead of their competition for fear of spending too much, impacting their EBITDA in a negative way, and then, therefore, getting negative press from what you called this red and blue. By the way, the planet? The planet is green. It does not care. It is bipartisan.

John: Right. It’s so true. We all share the planet together, no matter what we are. Come on.

Debbie: We do. It does not matter.

John: I mean, how has the work been going? Talk about when you started as the global board effectiveness and sustainability lead, you have a little bit arc of the journey. Where you started, the traction you got then, and the traction that’s happening now. Do you feel as though we’ve passed this, for lack of better terms, tipping point where people understand that sustainability and ESG and regulation, vis-a-vis what just happened in Europe and what Gary Gensler is going to do with the SEC here in the United States? They’re going to obviously do in Asians as well. Is this here to stay? Are people convinced of that yet? Or talk a little bit about the arc of your journey in this leadership position at Accenture and where you feel we are in this journey.

Debbie: I will happily tell you that I do think that we are moving forward. I know sometimes it feels like it’s at a glacial pace. But as you mentioned, back in 2007 when you started this, we did not have chief sustainability officers.

John: Okay. Right.

Debbie: Although today, I will say that the chief sustainability officer title and remits are different across industries, and across companies. There is someone there that they can usually point to or that the board can hold the feet to the fire of when you ask the sustainability questions now. The interesting part is where does that chief sustainability officer report up to? Is it through the general counsel’s office? Is it through the CFO’s office?

Is it straight up to the CEO? I can tell you what I’m seeing and hearing when it depends upon who it’s being reporting to if they ever get in front of the board and what that looks like and how often. We’re seeing some of these changes occur for some companies it’s been checking the box and they’ve been doing the reporting. It’s going up through the CFO’s office. The audit committee has only been looking at, this is what our report’s going to say, whether it was our corporate social responsibility report or whether it’s now some of the numbers that are coming out, they’ve seen it very narrowly that way. For the companies that have been able to say, “You know what? We want to use this as a competitive advantage. We want to see know that our employees want to be left net better off.” right? When they leave at 65, 66% of the employees told us that they want to leave their office better off than when they came in. It’s very important for them, for their companies to treat them this way. They want to see sustainability as part of that company’s goals. They want to see how they’re living it.

They want to be doing things around it. How do you empower your people? That’s what we’re seeing, which is terrific. Whether it’s a CSO, the CFO, or the general counsel, it could be the CHRO. They are starting to empower their people to really feel like they own none of the net zero goals, but all of the goals across the sustainability spectrum that the company has made. By doing that, we’re finding that many great ideas for how they can reduce their greenhouse gas emissions, and how they can positively impact the DEI at their organization are ideas that are coming from the employees themselves. That’s good. Another thing that we’re starting to see more of, which encourages me personally, is the incentives. Companies now that are making these goals are finding that when they incentivize their employees, whether it’s a C-suite or below when you impact someone’s pay, you’re now impacting someone’s behavior, right?

You hear what gets measured gets managed, they are starting to manage that. It’s interesting though when the CEO or the CHRO will come to me or even the chair of the compensation or remuneration committee will come to me and say, “Well, Debbie, you want me to impact the incentives,” Right? “In my long-term incentive plan, do you want me to decrease growth? Do you want me to not focus on strategy?” Like I’ve got all of these important things, how do I do that? I’ve gone to those who’ve done it and you can see that they have, they’ve either reduced their growth by 10% and they’ve added in a sustainability incentive or they’ve reduced, they’ve taken something and said, “You know what? This is so important. We want to do this and impact this. We know that we need to reach our goals so we need to do this.”‘ Or the board has said, “CEO and CHRO, you need to go and put this in your incentives. Come back and let us know how you’re going to do it.”

Seeing these changes, these changes were not there 5 or 7 years ago, right? This is a very positive move in thinking about the boards talking about this, knowing that they need to empower their employees, knowing that they need to really impact the incentives. But then also during their executive sessions, oftentimes bringing in some of the other executives outside of the CEO and executive sessions, just to level set. These are the sessions where only the independent board members are in the session. When they have questions, they will bring in the chief sustainability officer or you talked about cyber earlier, the chief information security officer, and say, “Do you have the right resources? Do you have the right budget?” Wanting that answer. I tell my CISOs and tell all of them, and the answer is that I can always use more.

Because nine times out of 10, they’ve had their budget cut year after year, as we all try to be more effective and we try to be more efficient with what we’re given. But do you truly have, and the same for the CHRO, do you have the right training budget, right? AI is all new. How are you training your people on AI? How can that impact what you’re doing and how you’re doing it? Have you started to study that? How is it impacting our strategy? There are all sorts of good questions. I could go and talk about that for hours too.

John: Right. Debbie, how do you disavow board members from legacy information, bad information that used to say the narrative used to be, the trope was sustainability equals less profit? Sustainability equals more oversight. Sustainability equals all these negative things when really there are now so many stories, so many CSOs come on the show now, or people in chief impact officers or with titles all across the board of the alphabet soup of sustainability now, come on and give great, great anecdotal stories from their companies or organizations showing how sustainability makes their company more sustainable, more resilient, more profitable, et cetera, et cetera. How do you go, do you take specific examples from the brands that you consult with and then make those brands opaque and then bring the storytelling to other boards to convince them, “Hey, this is not going to be a net negative? This is going to be a net positive, but we gotta get the train moving first.” How do you navigate those sorts of tricky waters?

Debbie: That’s right. One of the things that we’ve been lucky to do at Accenture is we talk to the CEOs. We talked to the executives and 98% of the CEOs told us in a study that came out in January that they know that it is their job to embed sustainability into their company. Now, what does that mean? Is that easy? No, it’s not. But we went out in 2022 and we surveyed, it was like 550, 560 executives all around the impact of technology and talent around their sustainability.

It was 49% of them came back and told us that as they focused on the technology-led sustainability initiatives, they were able to positively impact the bottom line. They were able to use this as a competitive advantage for their company. This is where people say, “Debbie, do you need to go convince the executives?” Companies are convincing their shareholders, they’re convincing their investors that this is the right thing to do, it’s the right thing for them and it’s making them money.

Many of the companies, many of the boards don’t want to be left behind by the other ones who are going to leapfrog in front of them because they’re making these either technology investments for resilience, as you mentioned, or they’re making these sustainability pledges and goals and starting to meet them and starting to see some of the advantages then because they are able to impact either, again, what’s creating their widget, the cost of that, how they’re delivering it or from the circular economy standpoint, how they’re able to reuse some of the things that they had never thought about before. They’re solving two problems at one time. But it takes ingenuity and innovation and by the way, the space to do that as well.

John: Right. Speaking of ingenuity, talk about AI and its nexus to sustainability. What role should the boards play with regards to pushing an organization, a corporation towards the leveraging of, taking that last example you just gave, now, saying AI is the highest strata of new technology to deploy, employ, whatever you want to call it, leverage. What’s the board’s role there in that nudge push, whatever you want to call it, to get the C-suite leveraging that could be a very scary new technology called AI?

Debbie: It’s like they’ve been pushed off a cliff, right? Predictive modeling has been going on, the algorithms we’ve been talking about, the bias we all know about, right?

John: Right. That’s what I’m going to say. Yeah. [inaudible].

Debbie: These are things. But many of them weren’t really thinking that if they weren’t a very specific type of technology company, it was not impacting them. Then suddenly it’s everywhere, right?

John: Right.

Debbie: In February, I was speaking at a National Association of Corporate Directors session focused on ESG and the use of technology and what we were doing. I came up with five questions that board members should be asking at that time. I’ve got them next to me here. I will tell you, that was February. If they don’t know the answers to these questions by now, they’re in trouble, right? Because it’s moved so quickly. Boards need to be focused in many areas.

I want to be very clear, it’s going to be different by industry. It’s going to be different by company, even within the industry. It’s going to depend on where you started with your digital core. I was working with a CIO who was regaling me with stories about questions that they were getting from their board about how they could use Gen AI and what they needed to do. The CIO was so funny because the answer was you’ve not invested in technology since 1990. Like generative AI is the least of your worries.

That’s where you need to get to, right? They need to make those investments to make certain that they’re going to be able to continue with their organization as it is. If you are with your digital core strong in where it needs to be, right? You’ve been investing in your technologies. You are going to be able to look at the generative AI overall and say, “Okay, number one, how is it going to impact our strategy? Is it going to help us then create new ways that we can be successful? Is it going to help enhance it overall? Are there other things then that the generative AI, is going to be able to replace it? What does that look like?”

From a sustainability standpoint, they need to be examining this across their strategy and overall competitiveness, their talent. They need to do it from, of course, the technology standpoint. My favorite, they need to look at the risk. This is what the board is looking at, right? Where is the responsible AI? Are we making certain that what we’re doing is using the right ethics and integrity that match our organization? Have we embedded it into our overall enterprise risk management assessment that we do and our overall risk appetite and how does that look? When we do our sustainability materiality assessment, how does it impact that?

Now, I might’ve gotten too detailed and I can go into all risk management and risk assessments. Simply stated, the board needs to be involved in those. They should have been involved with them overall, but if they have not been, you need to start getting them involved and getting their expertise. Don’t forget, John, board members, most of them here, again, in the US, are on more than one board. They’re seeing and hearing things that can be very helpful to the organization. Asking them questions is helpful and getting their input can make your company stronger as well. The board looking at that enterprise risk assessment and the sustainability materiality assessment is one of the key ways that they can lean in early to help them with the oversight that they need to be doing of the risk on the other side with sustainability and AI.

John: Right. Debbie, you consult mostly with board members or C-suite folks who want to either become board members or want to learn how to better interrelate with board members. Todd, you have children 16 to 20. I have children who are 37 and 30. That generation seems to be much more socialized. They’re more sustainability natives than my generation for sure was, where we grew up…I grew up in public schools in Queens and in New York City. This sustainability wasn’t part of our curriculum. Our children’s generation, thank gosh, it’s part of their discussion, their vernacular, their curriculum.

It’s much part of their generation and they’re voting with their pocketbooks. How much is that part of your compelling leadership consulting to board members that, “Hey, yes, the regs are coming from the top down, but the folks that are buying our products, that are users of our products, they’re going to be voting with their pocketbooks and they’re going to turn away from our brand if we don’t get with it and prove, not only set our goals but prove that we’re on a path to achieving them?” Is the pressure from both sides now, our children’s generation and also from the stuff that’s happening with Gensler and the SEC and other types of legislation and leadership that’s coming up around the world with regards to goals, with regards to sustainability?

Debbie: It absolutely is. I probably left out part of my job around working with the talent and the organization part, because one of the things that I have the pleasure of doing, I’ve trained tens of thousands of people in my career. I love training. I think it’s so important. The reason I’m mentioning this, young people, love to learn, right? They love to be part of that and they love to do it in different modalities, whether it’s through the metaverse, whether it’s through live training, they like to consume training in short, bits and bytes online. How are we providing that to them? What does that mean? Because they’ve been getting this their whole life.

We’ve been able to, and something that we have invested in, I told you that billion-dollar investment, in learning from a sustainability standpoint, but it’s learning both ways. Not only do we go and make certain that people understand what is sustainability and give them that broad definition across whether it’s sustainable leadership and org, which I lead, or if it is the net zero or the supply chain or the measurement analytics and reporting. In thinking about this, what it looks like then is us listening to this younger generation for what is important to them and the circular economy is one of them. They do not like to see waste. They do like to see new products, right?

We see them getting the newest and latest phone or the newest or latest computer, but they also like to know that when they’re returning that, that that’s something then that is being reused. As companies today are figuring out better plastics or fully reusable plastics, they will spend their extra funds to buy them. This is something where one of the companies that we know well, and so, don’t buy this t-shirt, right? Let’s think about what the fast fashion looks like. They are thinking about this and what this means.

The more companies that are starting to reuse or recycle that circular economy and what that means, that’s something that matters to the younger generation. They want to be empowered. When I was talking about empowering the workforce, they’re the ones who want to bring you their ideas and tell you ideas for how to succeed. They want to see that the company is making the sustainability goals and that they are living towards them and then they want to see how they’re doing that through the circular economy. We have this great index called the Sustainability org index where we can have leaders go and really evaluate how they think they’re doing.

Then we go and we give the same survey, the same index information, the questions to the employees. We have noticed a huge difference between where leadership thinks they are and where the employees believe they are. As you know, most of the employees are either millennials or Gen Z, right? It’s going… When you think about it, it’s no longer and definitely not the boomers, it’s not the experts any longer, it’s going down and they care a lot. We are hearing it, companies are hearing it from their employees that they want the differences and that they’re willing to spend more for it.

John: Based on your report, and we’re going to put all the reports that you’ve referenced, we’re going to add links in the show notes, so our listeners and viewers can access all this important and very great information that you’ve shared with us today. But let’s just take that number that it’s true, a fifth of the companies are on track for net zero. That means you have four-fifths left to go get. You have plenty to do, Debbie, with your colleagues at Accenture. Talk a little bit about what else gets you excited that you’re working on Accenture and that you’re allowed to talk about upcoming initiatives and projects in 2024 and beyond.

Debbie: I will say that working with the talent part of the organization is something that I get to focus on quite a bit and understanding that it is the full C-suite who has responsibility for the sustainability goals. No one in any business anywhere should think that it’s only the chief sustainability officer, so I have been really encouraged and one of the things that we’re doing is we work with companies to help achieve their net zero goals or when they’re looking specifically at how they impact their supply chain and their value chain and what that looks like. Being able to tie what it means from a talent standpoint, whether it’s helping them with their operating model or org design, or if it’s the change management aspect of that with a focus on sustainability.

Then, of course, my favorite, the learning, right? What skills do you need and how do we help you with the learning? That is something that we are seeing come forward fast with the net zero changes that are out there, the supply changes that are out there, and then specifically around technology because I am getting called into more and more opportunities where they see that the technology needs to change. You don’t want to have five different platforms for the different sustainability goals that you have. You want to have one and you want to make certain that the entire C-suite is working together. Chief Security Officer, Chief Supply Chain Officer, CHRO, working arm in arm, hand in hand with the Chief Sustainability Officer is key because all of them then are going to be reporting to the board.

It’s great for me to be able to work with these different executives who are focused in a different way on achieving the same goal. Then to be in the board room with the board members, really helping them understand what they need to be doing. Since I talked about education is one of the things that the board members need to know as well, they’ve got such a complex job, right? More and more is being added onto their plate, and their agenda seems like every day, so they need to stay educated. They need to do it in different ways. You need to be thinking about your own self-education, whether it’s reading the reports that different companies are putting out or the newspapers on a daily basis.

There are great blogs that are out there, you know that. Being able to look at those, there are some that are really curated for board members, right? You’re not getting a 60-page paper, you’re getting a three-page paper that gives you that information and then you can go deeper if you need to. They need to do that. They need to be thinking about some of these external organizations that are doing the training together with the board members.

I mentioned that speaking at the NACD before, it’s a great way to collect with other board members, and have some peer-to-peer discussions, but then they can also be bringing the experts into the board room and planning whatever your year looks like for what’s important to your strategy and bringing in those experts on those topics to come in and talk about what they’re seeing in your industry and what they’re seeing at the other organizations that might be turning the corner and meeting them where their strategy is, because no company wants to be disrupted because they are not staying up to date on what is going on. Board member education is just as important as employee education on the other side.

John: You bring up a great point, Debbie, and since I have you, I need to ask you, because I myself have my own board of directors that I get to work with. Tell me in a post-COVID world, what’s your sweet spot for board meetings in person versus board meetings over Zoom? You’re the guru, so I need to learn this from you, and I know our listeners would be very interested in this information.

John: John, in any meeting that we are having, you know it’s very hard to read body language if you are not in the room with them.

John: Yeah. One hundred percent. I’m a New Yorker, and I’m a nose-to-nose person, but I don’t want to impose my own biases on the board of directors in this we’re all trying to balance our carbon offsets with how much flying around we’re doing to go to meetings, but is there a good balance that you’re seeing that sort of things are settling out?

Debbie: Yeah. I have seen that the majority of boards that I am working with are meeting in person for their main board meetings and most of their committee meetings. Many of them are using Zoom calls, the Teams calls for other meetings that either come up or they can do it specifically for some of the committee meetings. Again and again, though, I am told that the board members like meeting in person. In fact, I’ll tell you a fun story. During COVID, I worked with board members.

The day that my company closed down, I was with 100 board members, and so I followed those board members to make certain nobody got sick and everyone was okay, but then I continued on with that. First of all, I became their technology expert as they were holding their iPads, up they were saying, “How do I look?” I’m like, “I see up your nose, you don’t look good.” Then I saw, as their technology expert, and I was speaking with one of them one day and he said to me, “Debbie, this is awful.” I’m like, “What’s awful?” He’s like, “They’ve taken all the fun out of the board work. I don’t get to see the people. I don’t get to eat with them, we don’t get to joke around like you come on, you’re very purposeful and then you leave.”

John: Yeah. It’s true.

Debbie: That’s how all of our meetings are, right? We’re not getting to see eye to eye, meet face to face, break bread together. That’s really important to develop that culture that you were talking about earlier. [inaudible].

John: I like it. In-person for the meat and potato board meetings, in-person subcommittees, and other things could be online and things as such, but we should really go back to in-person board meetings as much as we can to get the most out of working together and collaborating and getting out of-

Debbie: That is Debbie’s opinion. Yes.

John: I like it, Debbie, you’re sitting in a very important position and you have a lot of visibility to what’s working for a lot of companies and organizations. That means a lot, that information is very valuable. I’m going to throw one last question at you because you’ve been so kind to give us so much of your time today. You’ve seen, this year, 2023 has been our hottest year ever around the world to date. If we were to turn on the news and pay attention to the news and sort of doom scroll, as they call it, it’s very easy to get discouraged quickly. Where really are we in terms of our battle to heal the environment, get things back on track, and get to some sort of equilibrium in terms of net zero goals and climate change? Are we at the beginning of this fascinating and important generational turn and journey? Is it the top of the first inning? Are we at the bottom of the fifth? If this climate change journey is a baseball game, where do you think we are right now?

Debbie: I do love baseball. That’s a really tough question because I would like to think that we’re past the first inning, right? I would like to think that we’ve started the game, but sadly, I don’t know that all the players have shown up yet. If only 20% of the players are on the field and engaged, we need everybody else to show up for the game and they are currently not there. That other 70% to 80%, they need to come in, need to start thinking very seriously about their opportunity to engage collaboratively across not only the supply chain but for success as a people, right? This is a people issue. How do we do that together? I think the game has started. I think some people are late.

John: Good. Well, that’s why we have you and that’s why the world needs more Debbie McCormack to get that 80% of the players back on the field so we can actually make some more progress. Debbie, thank you so much for joining us today. For our listeners and viewers to find Debbie McCormack and her colleagues and all the important work they’re doing in global board effectiveness and sustainability at Accenture, please go to www.accenture.com. As I said, all the reports and information that we discussed today, we’re going to put in the show notes. Debbie McCormack, thank you so much for joining us. Thank you for being with Accenture and making great impacts on the planet. Thank you for making the world a better place.

Debbie: Thank you, John. I appreciate being here today.

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