In a fireside chat hosted by the NACD Pacific Southwest Chapter on March 12, 2019, our Board Leader Rafael Pastor spoke with Adrian Bellamy, Chairman of Action Holding BV, Williams-Sonoma Inc., Total Wine & More and KinderCare Education, about the current retail landscape, disruption caused by companies like Amazon, and recommendations for how corporate governance can aid in the transition to a multi-channel retail universe. The lunch meeting at the Jonathan Club in downtown Los Angeles encouraged attendees to embrace the convergence of retail and online shopping and reflect on whether their companies lack catalysts to thrive in this changing industry.
Following are key takeaways:
1) Some companies in the retail sector are dying because their management teams don’t prepare for disruption and therefore don’t see a reason to change. It is the board’s job to push management to service the company’s customers in this new realm of creative retailing.
2) The fear of cannibalization is prevalent in a majority of companies and causes companies to merely survive instead of thrive. To combat this, companies must not be afraid to move into a competitive business segment and remind management, “if you don’t do it, someone else will.”
3) The role of the board is not only to maximize shareholder return, but also inform shareholders about the company’s values and contributions to the community.
4) When hiring a new CEO, curiosity and the ability to listen are key characteristics to look for. The best CEOs don’t necessarily have all the answers but are ready to ask the right questions.
Key Questions for Directors to Ask:
Is the company servicing customers the way it should? Do the customers value a high-tech or high-touch experience when shopping? Is the company changing with the landscape of the industry? Is the company afraid of cannibalization? Has the company prepared for technological advancements over the next three to five years? What’s the company’s strategy to avoid or embrace activism?