The modern digital board has many responsibilities, also gets a lot of distractions and hits many pitfalls on the journey of the digital transformation.
The board in a high-level leadership position plays a crucial role in business advising and monitoring, as well as setting key digital tones in leadership quintessential and talent management. The board needs to retain the ability to capture immediate and future opportunities which will enhance their shareholders’ benefit. And the board has to spread their thin time schedule on the variety of important things. Digital is about the change with the accelerating speed and the abundance of information (often the scarcity of insight), how to build a “prioritizing Board” with digital-savvy BoDs?
The Board has to have a good understanding of the organization’s strategic direction and its strategic alternatives: The Board needs to be engaged at the most senior levels to help influence and shape the business of the future. From concerns about risk management to the use of emerging technologies to leapfrog competitors, the digital BoDs’ challenge is how you move the ‘needle’ forward, and really mind the digital gap to accelerate your organization’s digital transformation. Boards need to spend time on the oversight of strategies, not operational issues that should be delegated to management or others. To build a prioritizing board to laser focus on the most important issues, the boards need to understand how to delegate, which means articulate what is delegated and then monitor, not micro-manage what is delegated. IT can make or break the business easily these days, and IT strategy is an integral component of the business strategy. To build the digital board with high “Tech IQ,” and digital savvy, it is important for BoDs understanding how the information can make an impact on the business growth, and how the digital technologies can be the pathfinder of the business transformation. Create an innovative boardroom with “free atmosphere,” so directors are inquisitive to ask great, tough questions for understanding better as well as providing invaluable input for integrating IT strategy into the corporate business strategy. Asking good questions is not the “wasting time” activity, it can help clarify the vision and bring the new insight to steer the company in the right direction, to ensure “doing the right things” (effectiveness) before “doing things right.” (efficiency).
The board needs to make laser-focused performance driven agenda: Though both performance and compliance are important boardroom agenda, the Board's role, in large part, is to make good decisions that enhance the value creation for the organization. They need to focus on their own performance as well as the performance of the management team. The business performance is not limited to financial performance, but also to the firm's performance in creating value for employees and customers, etc. At the majority of the time, the board agenda should be focused on the performance progress toward the goals, targets, schedules., etc, of the value maximization planning. Further, much of the boarding process or deep boardroom discussions around the business progress is the process that facilitates high-level management accountability.
High-performing boards have to prioritize and put significant effort into governance and risk management: BoDs can sense emergent opportunities, and predict potential risks. The real BoDs dilemma is that driving the business forward is extremely difficult. This means looking into an unknown future and attempting to define the landscape with its risks and opportunities, to steer the business ship to the uncharted water or the blurred digital territories. It also means taking control of the softer issues such as setting policy, strategic thinking, setting risk appetite. This includes addressing risks to reputation, and the need to be transparent and the ability to define risk appetite and risk culture for the business. No board will find this easy, but practice will ensure a more controlled outcome that protects reputation risk. Boards need to master risk intelligence to identify both business risks and opportunities, keep the focus on governance effectiveness and risk intelligence.
The modern digital board has many responsibilities, also gets a lot of distractions and hits many pitfalls on the digital transformation. The board provides an “outside-in” view of the business and multi-dimensional lenses to oversee and advise business strategy and execution, in order to steer business toward the right direction. A high-performance board needs to set the priority right, it has to laser focus on the most critical things, pulling enough resources and pushing the business model of technology, trustworthiness, innovation, and mastering digital fluency.