The collective skills and capabilities of BoDs make a significant impact on both the business’s survival and thriving, and setting the leadership tone for business transformation.
The board of director plays a significant role in overseeing organizational strategy, setting policies, practicing governance and exemplifying leadership disciplines. The contemporary corporate boards need to focus on both performance and compliance, monitoring business performance and improving management effectiveness. Due to the “VUCA” digital new normal, the directorship in any organization must have the ability to inspire, guide, and motivate. What should the board of director’s skill matrix include to improve the directorship maturity individually or collectively?
The board of director plays a significant role in overseeing organizational strategy, setting policies, practicing governance and exemplifying leadership disciplines. The contemporary corporate boards need to focus on both performance and compliance, monitoring business performance and improving management effectiveness. Due to the “VUCA” digital new normal, the directorship in any organization must have the ability to inspire, guide, and motivate. What should the board of director’s skill matrix include to improve the directorship maturity individually or collectively?
Leadership Competency: The effective functioning of a board depends on a number of factors, including the mix of knowledge and experience among the directors, Diversity in thought processes, experiences, industries, and situations are more important as a team. Leadership is all about the future and change. Strategic thinking, governance, auditing, risk management, regulatory issues, mentoring and coaching, openness to communication are some of the areas of director competencies though it may be contextual. They should have abilities to probe issues in depth, disagree without being disagreeable, mentoring and be mentored, understanding risks, building skills & capabilities, and promoting teamwork. Vision is an integral part of the directorial role, BoDs as the digital visionary can make a better influence on guiding the organization toward the right direction and bring profound insight in transforming the business up to the next level of business maturity.
Critical thinking and strategic thinking capability: The contemporary board plays a crucial role in overseeing business strategy. The strategy is definitely a different beast nowadays. With the increasing speed of changes, many organizations are inundated with tactical tasks and daily operational duties, they don’t spend enough time on scrutinizing the long-term strategy and identify disastrous blind spots in order to make a smooth business transformation. Hence, critical thinking and strategic thinking capability are important for BoDs as the business critic, who can provide excellent feedback which gives the top management accurate information to improve; great questions to contemplate, and keen insight to gain the in-depth understanding of the digital business ecosystem. "Group-thinking" and lack of courage to ask the tough, strategic questions is the chief weakness on Boards today. The Board has to have a good understanding of the organization’s strategic direction and its strategic alternatives. The digital BoDs need to present strategic wisdom to pinpoint pitfalls in strategy management and keep track of the strategy-execution continuum.
Decision effectiveness: Governance disciple enables better decisions. Governance is a sophisticated process that if well executed, will lead to better decisions. It will allow not only to protect the existing value but also to create new value for its shareholders. It is important to emphasize that governance is fundamentally about having a systematic approach to making decisions within the corporate entity. The boards play crucial roles in having the oversight of the business assessment, gauging conditions and choices; oversight of appropriation, matching priorities and resources; oversight of accountability, scoring activity and net results. Governance is like the steer-wheel to ensure organizations running in the right direction and head to the destination. Good governance must create excellent performance, especially for long-term business growth. In a world of rapid changes, directors are required to exercise leadership influence and improve decision effectiveness over volatility, manage uncertainty, simplify complexity, and resolve ambiguity in the "VUCA" digital environment.
Changeability: Change capability is a strategic skill in leadership qualities. While there are many components of leadership, one of the most important ones is the ability to adapt, model and influence change. We live in a world where change is the norm and if we don't embrace it, accept it, roll with it or make it happen, we're not going to be successful. Nowadays, the speed of change is increasing and digital transformation is an inevitable journey, BoDs should set the tones for change and proactively drive change to ensure the organization is moving in the right direction with an accelerated speed. The leadership team such as board must push the business’s change agenda, but pull the resources to achieve it. It also makes it possible for everyone to be on the same page speaking the same language and fosters an atmosphere of accountability.
The collective skills and capabilities of BoDs make a significant impact on both the business’s survival and thriving, and setting the leadership tone for business transformation. Boards are getting better as the awareness grows of how important board composition is in order to lead in today’s digital dynamic. The more a board represents or mirrors its stakeholders, the better served will be the organization. It’s all about leadership from the top which sets the leadership tone and steers the business in the right direction to achieve long-term business prosperity.
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