Wednesday, June 7, 2017

The Digital Board’s Digital Inquiries

The high performing Board shows the ability and openness to "question itself, senior management team, and its decisions/ discussions.

Corporate boards play the critical role in strategy oversight, performance monitoring, and policy setting. The board has to have a good understanding of the organization's strategic direction and its business alternatives, especially, now most organizations are at the inflection point of digital transformation. It is important for boards to make invaluable inquiries for criticizing the strategy constructively and take a proactive approach for leading digital transformation seamlessly.
How often is the “vision thing” discussed at board meetings? What could make your vision cloudy and how to clarify it etc? A vision describes the desired future position of the company. Corporate BoD is the top leadership role. Leadership vision is to be the guiding light. Vision is about shaping an idea that comes with a commitment to push it through. Hence, the “vision thing” needs to be the frequent topic discussed at the board meetings. Vision is the end goal, the strategy is the plan to get there. Vision is where to go, the strategy is how to get there. A strategy is an action or ways chosen to bring about the desired future, such as achievement of a goal. The "VUCA" digital dynamic would easily make the business vision cloudy, and increasing speed of changes and overwhelming growth of information can make the business "lost in the dark" if the management is not well preparing the upcoming digital transformation. Hence, the board's delegated strategic goals to the management team should be the main topic at every board meeting, and it is important for a Board to to pay enough attention to the "vision thing," to zoom into the future as if it were closer, and assertively monitor strategy management progress.
Is the Board of Directors directing management effectively and appropriately by establishing objectives and defining management parameters limiting management authority? Strategy planning is usually a management practice, and risk management is governance discipline, they have the interdependent relationship. They are not completely siloed, should always be interactive, communicative and mutually enforce with each other at an operational level, to ensure business effectiveness. The corporate boards oversee strategy management, also practice governance disciplines. They play the critical role in directing the top management to the right direction, also prevent power abuse or office politics. High-performing boards have put significant effort into governance & risk management. Risk Management, in the context of Strategy Management, is how many obstacles and opportunities affect journey from A to B. They update policies for adapting to the digital new normal for both enforcing the effectiveness of strategy management and harnessing business governance maturity. This includes addressing risks to reputation, and the need to be transparent to define risk appetites and risk cultures for the business. Generally, these scenarios would be brought about by the need for rapid change to improve the organizational performance.

Is the Board of Directors monitoring and evaluating management performance to ensure efficient and effective progress toward objectives and compliance with operational and management parameters? It is the effectiveness of the Board of Directors in delegating to the senior management team and holding them accountable that supports the management team in achieving outcomes. Boards make communication with shareholders in a timely fashion. Business performance can be affected by numerous factors of which governance is one of them. Ultimately, the board takes the praise or the blame depending largely on their ability to influence the business outcomes. They should invite more executives with the right expertise and capacity to contribute to BoD, to gain contextual understanding about the business management performance, and keep track of the business progress made at both strategic and operational level. As the reality and the challenge in governance is not a choice between a good and a bad decision, but between shades of good or bad. And both board and their decision making need also be more dynamic and leverage, to ensure the “business ship” is running toward the right direction with the right speed.

The high performing Board shows the ability and openness to "question itself, senior management team, and its decisions/ discussions." It’s not talking about "second guessing" but the ability to validate and double back on decisions past and present discussions. After all, the work of a board requires strong cognitive abilities in order to perform their directorial duties. Just like a steering wheel can’t accelerate the speed of the vehicle, but by navigating the better pathway, it may shorten the distance or save the energy, stay focus, to reach the destination.


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