environment -- >> we will fulfill our 40 year commitment to congressional coverage. we will return to this program momentarily following a short pro forma session in the senate. now live to the senate floor here on c-span2. the presiding officer: the senate will come to order. the clerk will read a communication to the senate. the clerk: washington, d.c., august 27, 2021. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable tim kaine, a senator from the commonwealth of virginia, to perform the duties of the chair. signed: patrick j. leahy, president pro tempore.

the presiding officer: under the previous order, the senate stands adjourned until 10:30 a.m. on tuesday, >> and that wraps up the senate pro forma session held in the hart senate office building on capitol hill while members are in their district work period. while legislatures return for business september 13th. and back to book tv, join it in progress. >> i'm constantly thinking what can be best practice and what can we do to enhance board activity and i address this specific questions around employees and i talk about ways to really upgrade boards and i'm sure we'll get to that point. but to the question about employees, it's a really interesting one, and the board in germany in particular is slightly different. as you know it's a two-tiered

system so there's a sense that the managerial board as well as as well and it's different from what you might see elsewhere. i will say again before i address the specific question that there's a lot of overlap in terms of the governance responsibility. all of these boards have audit committees, and compensation committees and in at that respect, i think that there's very small margins of differences and of course, this one about employees is a different one. i recently wrote an article, about the fact that i believe that two things, with un, we're more and more in the boardroom able to get the viewpoint of the employee base into the boardroom in a way that i think is really person and technology is allowing us now to go beyond the sort of company, sort of managed, you know-- >> and you write about, like

glass door, blind. >> exactly. so board members are following that to try to get that true? . absolutely, we want to hear from our clients, stakeholders and employees the only way to make the best decisionments it's important that we're getting that message loud and clear and there will always be scope for improvement as technology continues to evolve. but on the other hand, i do argue and i've written a number of articles and something from the bloomberg opinion a few weeks ago, how it's important for us to make sure that there still is some responsibilities that are-- and decision points that are made at the boardroom or at the managerial level because of the organizational leaders tend to have a much broader purview. soen view on one aspect, the one business in a company, you might have a different risk tolerance from the way the company in its entirety or the

enterprise in its entirety should be viewed if you want to think about something like risk. and so, i do sometimes and i generally made the point that we have to be careful about bringing people or, you know, employees or certain viewpoints into the boardroom, powerful shareholders and we have to be careful about that which i talk about large nonindependent board strategic stakes activists on the board because you don't want them to bring a view that might be very narrow and maybe doesn't take into consideration the sort of more fulsome picture. but these are evolving debates and discussions, i think the best boards have all the time because the things are changing, but we want to make sure that we get the message in from the employees in particular about you also more generally from society rit large. >> in terms of the makeup of the board, it isn't just a question, should employees be a

part of it or not. it's really also about what kind of diversity exists on boards. you write about of course, major institutional shareholders, and nasdaq proposal recently. what data do you seek out to track and monitor when it comes to diversity inclusion, either on boards a general or the employee base which is, again, something that is definitely at the forefront for many, many major companies. >> yes, absolutely. let's take a minute here to fully appreciate that, you know, my very good friend melody hobson, now the chairman of starbucks often says, numbers don't lie and we know that the numbers tell us clearly that more diverse boards, corporations and c-suites just do better. their return on equity is far superior to the cost of capitol and their ability, not just survive, but thrive and compete

is enhanced by having more diversity and in the book, there i cite specific data from mckenzie report and harvard and use that in this area. it's not a matter of window dressing, it's a matter if you want to compete in the 21st century, you need to be really hypersensitive to the issue of diversity. diversity of views. diversity of race, gender, background, i think it's absolutely salient for long-term success. having said that, boards have some levers to influence this and we, you know, fortunately we talked already about our ability to hire the ceo. that's a real opportunity for us not just to hire diverse candidates, but also to think about whether whoever is taking that seat can be a standard bearer for understanding and really pushing the agenda around a more diverse society, among more diverse company. but also, we do that through compensation and not just

diversity issues, but issues around esg broadly are absolutely now part and parcel on a percentage basis, a considerable part of how we determine compensation. certainly for the ceo, as well as the top management and business leaders and i think it will begin to be that, but that said, and notwithstanding what i just said, we don't want to be in a world where we're fighting discrimination with discrimination. so high performing-- and they should be encouraged to succeed as much as any other group, but there are clearly gaps and we have been certainly lagging behind in terms of remedying the shortfall in diversity and i'm pleased to say that, the companies that i'm involved in, but more generally there's a real sense that this is not just about employees and boards, et cetera, it's also about subcontractors, people who are advising us in terms of the --

the external auditors, the people managing the pension fund money, you know, there's much more that corporations can do and of course, many of these companies have large events and gatherings across the united states, across the world. there's a lot of scope for companies to say, you know what? we want to know more information about what these towns and cities record is in terms of education, in terms of employment, in terms of criminal justice and in terms of health care to their populations. there's a lot more we can do and i think it's an exciting period to think about this just beyond the sort of narrative which, you know, sometimes people just push. >> it's almost someone has described to me like a spoke and wheel model. it's not just the company itself like you said, it's all of these other pieces that come together. despite even talking about this right now and how much progress has been made and the thought that goes into the future,

there is a moment that you wrote about in your book that frankly made my jaw drop. going back to may, 2010, you were at an annual shareholder meeting and a shareholder stood up and said something quite shocking and i would love to hear you tell this story. >> yes, sure, so basically the context was, i was on the board of barclay's bank and we had a general meeting and we had certainly over a thousand shareholders show up, post financial crisis, a lot of enthusiasm in a massive hall and i was the only visible minority, meaning the only woman on the board and only black person and in that respect already standing out and you're right, the shareholders stood up at q & a and pointed at me aggressively, i want to know the credentials of that statutory woman that

she can serve on this board and thankfully i had worked 10 years at goldman sachs and i had a ph.d. in economy and my position on the board i often say to minority candidates and people interested in boards that we should not be in a position where we have to lead with our race or gender. we should be leading the conversation in our abilities. we work, we try to work extremely hard we want to learn we want to grow we want to contribute and it's not about getting any breaks or any favors. we want a fair shot at these students and i think that is really was my big takeaway from the experience. when we came off the podium three of my white male colleagues said, oh, gosh, thank god they didn't ask me about that because i don't know what i would have answered, i don't think i would have been obviously to answered anything credible at the time. but the good news is that the world is changing and we now in

the u.k., for example, about 34% of women represented on the ftse, the most important ftse companies and more generally, i think we find it odd and peculiar and you look at a board and don't see women and racially and it's odd, certainly the boards i'm on. it's anathema to thinking we see now and we're very much attuned to more diversity and it's value add, most importantly, it will value add for competition. >> thank you for sharing that story and i think it ties into what you're talking about where company culture. do people want to be a part of the companies? do they feel included and do they want to stay? when you bring people in do they want to stay? you talked about how company culture, an important part of being a board member. can you describe how boards get involved in crafting a company's cultural message.

it feels ab tract. what is that like when you're in the weeds? >> yeah, you know, it's a wonderful question because it's incredibly complex and will vary from business to business. i would call on at least one occasion where a board-- we had a visitor and someone who was a cultural sort of champion and i was really struck by something he said. he said, look, you know, it's actually in a way easier to influence and change and pivot culture of organizations, where there's a risk that an employee can die by being on the job and he was talking about having advised the national health service and in britain, advised an energy company where they had an accident. and he talked about being an advisor for cultures to an army. again, you know, people will not go home if they don't ascribe or follow certain cultural norms. the challenge is much more when you think about how to drive culture in places where, you know, you can work in a bank,

for example, and the risks are perhaps mitigated, considerably mitigated of dying on the job. and i think that there's the way that the board engages, whether they think more about process versus outcome and i love that they talked about vis-a-vis netflix. if you're trying to-- i talk about this in the book as well, you want as few degrees as possible, degrees in freedom, the tablet or the vaccine is identical to the one that you get and you could argue that the process a critical and everything needs to be, you know, to the nth degree the same. that's a very, very different cultural for netflix, for example, people need to be creative. they need to come up with their ideas as farfetched or crazy as they may seem and they want them to throw it on the wall and see what could come out of

it. so the degrees are freedom are much broader. of course in that respect the role of the board and how they set sort of the check and challenge the culture of the company will be quite different, but you know, i will just say, really, how we do it is-- and check this and make sure it's working is an evolving-- it's much more of an art than a science. we are interested in thinking about things like lunch, you know the agenda, should we nudge employees to change their behaviors. should we penalize people, literally dock of them their bonus if they behave badly? should we incentivize people with bonuses? there are so many different tools and we are constantly looking at how these types of tools and efforts, within the levers that we have and the powers that we have, can be actually impactful for changing culture, but it's different,

cool is not out on this one. this is something we'll continue to deal with. thankfully, i don't think there's a point where we say, okay, that's the end, nothing more to be discussed. no more work on culture, i don't think that's going to happen. can you just imagine? and i think it became even more relevant during this global pandemic many work forces went remote. question about employee well-being and employee loyalty and at the same time, we've seen this whole employee activist movement or at least increasingly more vocal employees, i just want to go back to the one point that we looked at briefly earlier whereas a board member you're saying, you know, you're not just having whatever management is presenting how employees are feeling. you're going out to seek it and trying to get information, to really get the full breadth of how employees are doing. what was that like for you as a board member during the pandemic and how were you trying to figure that out? >> you know, it's incredibly challenging because you're