Cultivating the perspectives and skills needed to protect businesses and the people that run them.

Listen to Episode 57 on Apple Podcasts

Guests: Isabel Kelly, non-executive director at the Panoply and CEO of Profit with Purpose, and Ulrike Malmendier, Economics Professor at the University of California Berkeley

Hosts: Dottie Schindlinger, Executive Director of the Diligent Institute, and Meghan Day, Senior Director of Board Member Experience for Diligent Corporation

In this episode:

  1. Benefits from a Nonprofit Background: Kelly discusses her background coming from the nonprofit world and how it informed her perspective in the corporate space
  2. The Importance of Collaboration: Having experienced both for profit and nonprofit company goals, Kelly gives her recommendations for making meaningful progress on ESG
  3. CEO Stress Levels: Malmendier discusses her striking research findings on CEO stress levels and health outcomes.

Summary:

As existential threats to business continue to mount, how can companies ensure the health and long-term viability of their company and employees? Hear from Isabel Kelly, non-executive director at the Panoply and CEO of Profit with Purpose, on the importance of nonprofit and for-profit collaboration, and from Ulrike Malmendier, Economics Professor at the University of California Berkeley, on the effects of stress on CEO health outcomes.

Benefits from a Nonprofit Background

Isabell Kelly serves as a prime example of the way companies are looking for diversity of backgrounds on their boards. She began in consulting at the Panoply, which eventually led to a larger role: “They offered me a seat on the board since I believed social impact had to come from the board level,” She explains, “Eventually, I became the chair of the ESG Committee there.” She explains the reasons why she was able to work comfortably and effectively in a new environment: “I was the first board member they invited. The chair invited me, so it was embedded across the board and leadership that I had a right to be there, despite what they thought of my methods at first.”

She goes on to elaborate on what she brought to her roles: “Coming from a nonprofit background, I brought rigor and accountability, which sometimes surprised those in the corporate space. People thought I wouldn’t know how to deliver against a project or budget, or work to a deadline. Those with nonprofit backgrounds are used to delivering a lot with a little and making smart use of their networks to do so. We are accountable not just to shareholders, but to full set of stakeholders: Environmental NGOs, communities, and so on.”

Kelly then discussed the similarities and differences she noticed between working in the nonprofit versus the for-profit space: “I saw a lot of assumptions about the other side: How people dress, how people talk. I had a nonprofit leader come to me this morning to say he needed training in how to talk to a business crowd.”

“In both for-profit and nonprofit environments, people care about the world and want to see change, they are just going about it in a different way.”

Isabel Kelly, non-executive director at the Panoply and CEO of Profit with Purpose

The Importance of Collaboration

In 2020, directors had to answer a plethora of new questions when it came to the “S” aspects of ESG and also how companies should commit to DE&I. Kelly discusses how her background helped her to answer those questions: “Nonprofits have worked to standards for a very long time, which runs counter to how some companies think about short-term output. Nonprofits are used to these long-term goals.”

She emphasizes the importance of collaboration between all types of organizations: “Companies are familiar with working for governments, and nonprofits work with governments all the time. But, companies don’t work as closely with nonprofits.” She gives an example: “Take the SDGs (Sustainable Development Goals). They are laid out very clearly. In order to adhere to these, nonprofits, for profit companies, and governments all need to work together.”

For Kelly, this all goes back to a concept of shared value: “This idea of collaboration and learning goes both ways. Nonprofits and companies need to come together to see what resources and expertise they have to solve the world’s biggest problems, and to find the right balance between efficiency and speed.”

“We need to focus on the concept of shared value. Nonprofit and for-profit companies need to come together to effectively utilize shared resources and expertise to solve the world’s biggest problems”

Isabel Kelly, non-executive director at the Panoply and CEO of Profit with Purpose

CEO Stress Levels

Malmendier discusses the biggest takeaways from her latest research: the effects of negative business outcomes on the stress levels, aging, and health of those in the CEO role. She touches on methodology: “Within the CEO job, we compared between a stressful situation like an industry-wide crisis, or a change in law, and compare to another CEO in a less stressful situation. Looking at CEOs at companies within an affected group compared to CEOs of companies outside that group produced a 1.5 year difference in life expectancy.”

She looked specifically at the introduction of antitakeover laws in the United States: “We saw an instance where the passage of one law increased CEO lifespan by two years after an average number of years’ exposure to that law or working after it was passed. Even within a generally healthy population like CEOs, having protection against these takeovers makes a significant difference in health outcomes.”

So what does this mean? What should we take away from the research? Malmendier gives her perspective: “The outcomes these CEOs are living through are not necessarily their faults, and they often can’t be avoided. The effects of these antitakeover laws on health outcomes imply that if you put a CEO in a position where they know that even under a bad outcome, people will understand they are doing their best to lead the firm through, and that they won’t be punished for exogenous factors, you could quite literally be saving the life and health of your CEO.”

“What struck me the most about this research was how strongly crises and bad outcomes affected CEO health. Even within a relatively healthy population, having protections and support systems in place makes a significant difference.”

Ulrike Malmendier, Economics Professor at the University of California Berkeley

Also in this episode…

Malmendier talks about the importance of sleep in health outcomes: “I see an intense underappreciation of the role of sleep. For many, we take pride in how many all-nighters we can pull. I’ve seen in my own and others’ research the connection between insufficient sleep and mental decay. We need to emphasize the role of sleep and exercise in these people’s lives.”

Resources from this episode: