We are constantly on guard duty to stay abreast the trends in corporate governance around the globe.
No moss can grow under a director's feet if he or she is on the case.
Here are four to consider with your peers around the table. Are you ready? Prepared?
Stretching the Role of the Board
It is beginning to seem hard to know when governance responsibility ends. The stretching of expectations for accountability is becoming elastic. The oversite role of boards is growing to include investor engagement, succession planning for both the board and executives, brand reputation, and strategic planning.
Mush of the push comes from European companies which are defining constituencies to include not only shareholders and employees but stakeholders, unions, the community, the envirnoment and the international area.
The role of directors in strategic is under challenge. Traditionally, management defines the strategy and the board approves and monitors the performance against the plan. Executives are increasingly frustrated by the lack of contribution this provides for input from valuable directors' perspectives. Directors are frustrated because they often suffer from powerpoint mania rather than getting a better grip on the strategy.
Hence, the challenge now is for companies to get a stranglehold of something better "down the middle" that serves a better purpose.
Colleague Donley Townsend outlines the strategic capability of boards with this evolutionary diagram.
Where would you place your board today? If you are not where you wish to be, discuss what you can do.
Consider strategic offsites designed for directors and executives to explore longer term strategic thinking, scenario planning and possibilities which can then inform the actual strategic planning process.
Freshening Director "Social Biology"
The focus on mix continues to take varied shapes and approaches. Board composition gets a sharper look based on skills, knowledge, and competencies as a reason for director assignments tied to longer term views about the strategy of the business. Added to this now is a view about the board styles of directors, which contributes to overall effectiveness in group dynamics. In a peer-based leadership model of boards, this variable turns out to be highly correlated to positive performance.
Add to this the push for diversity. Gender diversity is the most considered, although our research shows a growing need to look at diversity related to orientation to problem-solving. The more diverse the thinking around the table, the better the quality of ideation and decision-making.
Long Haul Value Creation
Companies recognize the need for smarter means to create sustainable value. This is especially true in light of increases in shareholder activism and examples of companies that face the leadership dilemma of short-term priorities that may compromise interests for the long-term.
Skills for Social Media and Reputation Management
Witness the minutes it took for United stock to plummet after the video went viral showing how a customer was treated when he was unwilling to deplane on an overbooked flight.
If a skilled director had insisted on a communications playbook for the company to use in the face of any communication crisis that could run through solcial media as efficiently as is possible today, the deicisions to manage this would have been handled much differently and with fare less damange.
Is your board prepared with deep knowledge of social media and communications management?
Best Practices Advice
If your board seeks ways to address these -- and other challenges ahead -- feel free to contact us. We study and propose best practices and options for continued improvements.
MARK YOUR CALENDAR
Our annual Manage Your Board Potential Program at Harvard will be June 4-7, 2018
Join dedicated corporate directors from around the globe who come to explore and learn how best to address the new issues facing us in governance.
Test your skills in the global arena, where governance standards across regions create a powerful question: what can we say good governance means across boundaries?
Do you have a question about governance issues around the globe? Contact us for guidance!
www.boardwise.biz or 510-517-7791.
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