goBeyondProfit CEO Interviews: Colin Connolly, President, & CEO of Cousins Properties
Friday, October 13th, 2023
In a recent conversation with President and CEO, Colin Connolly, we discussed the practical application of a corporate philosophy, their recent effort to pay their civic rent here in Atlanta and how concepts like ESG are merely the latest label for an on-going commitment to good governance and positive impacts in the lives of people and the planet.
A Conversation on ESG: Actions Beyond the Acronym
Founded in 1958 by Tom Cousins, few realize how many thousands of people have benefited from Cousins Properties long-held corporate philosophy “doing what’s right when others aren’t looking.” This simple phrase guides company-wide strategic investments as well as the daily culture of this now multi-billion-dollar public company and preeminent commercial property company across the sunbelt.
In a recent conversation with President and CEO, Colin Connolly, we discussed the practical application of this corporate philosophy and how concepts like ESG are merely the latest label for an on-going commitment to good governance and positive impacts in the lives of people and the planet.
“Do what is right when others aren’t looking.” How has this simple corporate philosophy guided decision-making for you personally and for the company?
Early in my career at Cousins, a review of a massive closing document revealed that our counterpart had made a significant mistake. It was a multi-million-dollar error on their part and we alerted our counterpart to it. The Cousins culture is to “do what is right when others aren’t looking” and we always want people to know they can trust us.
Fast-forward to 2020 when the pandemic was just hitting, this corporate philosophy once again had serious implications for the business. We realized that our customers were going to feel a tremendous amount of uncertainty and anxiety about the future. As small business owners, they had no idea when they were going to be able to open again. So, we went to all of our customers and told them not to worry about rent for now. We would figure it out along the way but that they did not need to worry about that for now.
We also knew that our people were feeling the same uncertainty and anxiety because there were going to be layoffs all over the world. As an executive team, and with the Board, we made the decision at the start of the pandemic that there would be no layoffs and no changes in compensation during that time. It was the right thing to do at the time, but we also gained the trust of both our customers and our employees that continues to be a business benefit today. As I’ve been talking to my peers about the “Great Resignation,” I’ve been able to say that we really have not experienced it. When our people get offers, they remember our loyalty.
What do you make of the recent ESG controversies?
You’re right, ESG has absolutely become a kind of a political football, which is certainly not an area where we want to spend a lot of time. I look at ESG very differently. Since 1958, we have recognized the importance of a commitment to thoughtful and responsible operations, with a sustainable model that prioritizes corporate social responsibility and creates meaningful value for all stakeholders.
We strive to have the right mechanisms in place, to operate in an appropriate manner and be measured on our environment impact, social involvement, and governance. Rather than one lump sum, I think of them as three very different and very important priorities.
Environment. As a company participating in the built environment, which is incredibly impactful on long term environmental sustainability, it’s obviously incredibly important for Cousins to be a good steward and do everything we can to not only minimize our impact, but also ensure the cities and neighborhoods in which we operate are cleaner and healthier because of our involvement. We look at the broader Cousins family, not only our kids and grandkids, and want to have a role in creating an environment in which they all prosper.
Social. Cousins has been focused on social issues for decades and we’ll touch on that later. When it comes to issues of diversity in particular, we consider diversity a strength for the company and believe it is a competitive advantage. Ultimately, we want the Cousins company to reflect our customers.
Historically the commercial real estate industry was predominately white, but this is not the demographic of our customers. We learned long ago that part of gaining the trust and respect of someone whose business you want to earn includes having a company where they can see themselves reflected in the company itself. We’ve been working on changing the commercial real estate business for a long time, working to create a welcoming environment, attracting talent from a broader, wider pool and incentivizing people from diverse backgrounds who may not have shown an interest in commercial real estate.
Governance. I think corporate governance goes beyond specific bylaws and SEC requirements. The hallmark of good Governance is a well-informed board. Transparency plays a major role in not only sharing what we are doing as a company but why we are doing it. We foster an environment where people with broad perspectives on important issues feel comfortable engaging in debate and dialogue.
This way of operating proved itself out in 2020. So many people were scared, they froze. Because of our relationship with our board, we were able to move rapidly to sell 20% of our lowest quality assets and reinvest the capital into higher quality assets. Being able to make that strategic move at a unique, stressful point in time has really set us up well for the future.
Again, it goes back to the beyond-compliance aspect of good governance that included having a board who had confidence that they were informed, understood the situation and could be supportive, allowed the team to make a big move in an uncertain time and do it with speed. As a public company, that kind of agility is not something you hear about often.