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Rahul Bhardwaj is president and CEO of the Institute of Corporate Directors.

The “instant industry” created by the legalization of cannabis just five weeks ago presents obvious challenges for the directors of cannabis companies. But it also offers lessons for the directors of every kind of company.

The risks and opportunities in cannabis are simply unprecedented.

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These are all new companies, with new boards, new management, new employees, new investors, new customers and new regulators – in an industry that itself didn’t exist before. At least, not legally.

Talk about the shock of the new!

This has created entirely new levels of risk for everyone involved with these companies. The task of managing that risk falls first to the boards as they begin to build trust and confidence with all of the stakeholders at a time when trust in corporations and their leaders is at a low point.

In this unusual environment, there is so much to be done so quickly that it’s easy to confuse what’s urgent with what’s important. But to my mind, boards need to focus on four issues:

  1. Building the right culture.
  2. Overseeing risk.
  3. Developing the right strategy.
  4. Creating a diverse board.

To achieve numbers one through three, I believe boards first need to address number four.

In the most entrenched industries, boards are rushing to become more diverse. But when you’re a new company in a new industry, diversity of thought rises to the top. Agility of action rarely emerges from deeply embedded thinking. It comes from directors who bring new points of view to the table, and that newness can be a function of a variety of characteristics – including age and gender – as well as experience and expertise. What’s more, when there’s no corporate history at all, creating a functional culture relies heavily on new ideas.

A diverse board will also be more likely to start building the right culture by selecting the best chief executive they can find. Again, as we’ve seen from the ever-shorter terms of CEOs in industries where there are battalions of qualified women and men, this is incredibly hard. Finding the right CEO when not one candidate can point to any direct industry experience on their résumé takes a special kind of judgment. The board also has to decide how best to compensate the CEO and reward the right behaviour so the company will create value over the long term. When you have no comparables around compensation in this "Wild West” environment, it’s hard to get these critical long-term decisions right, especially the first time.

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It’s no surprise that cannabis boards have to manage an almost unheard-of burden of risk from many angles. Needless to say, in a new industry that’s only now being brought into a legal framework, the sensitivity to reputational risk is inherently high. But add product-safety risk, data breach and cybersecurity risk to the mix, and the job of chief risk governor becomes even more complex as the industry faces a future filled with unknowns.

This brings me to the third “must-do” for cannabis boards: to oversee management in creating a winning long-term strategy for the company – in an industry that didn’t exist 50 days ago. But consider that creating a bulletproof strategy in any industry is a tall task these days.

But wait one second. While the cannabis industry is a special case because its circumstances are so extreme, it is not a unique one.

There are many young tech companies whose directors face the same kinds of hurdles, although not quite to the same degree.

In fact, there are all kinds of mature and even legacy companies whose boards confront similarly vexing – and sometimes existential – challenges. These include, for example, ensuring their organizations foster cultures of safety and inclusivity, as well as understanding the strategic threats and opportunities presented by disruptive technologies.

All this is to say, it’s never been more challenging signing on to the obligations of being a director of any public company, let alone one that’s never had a quarterly investors’ call or even an AGM.

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