Monday, March 5, 2018

High-Mature Digital Boards with “Cool-Headed” Directors

An ultra-modern board is built based on progressive mindsets, leadership dynamic, advanced skills, and learning agility, to envision, inspire, influence, and innovate.

Due to the complexity, uncertainty, ambiguity, and volatility of the digital era, the BoDs as the senior leadership of the organization or the society are like the steering wheel to ensure their ships are moving in the right direction towards the uncharted water. The directorship in any organization must be able to make influence from mindset to behavior and evolving to what is needed next for radical changes such as digitalization and societal advancements. High-mature digital boards with “cool-headed” directors are driving force for changes and exemplary of contemporary leadership.

Setting risk appetite and risk framework: The corporate board has the responsibility for monitoring business performance and governing risks, more specifically setting the risk appetite and risk framework for an enterprise on the advice of management. With the increasing speed of changes and digital velocity, if the boards that are still using traditional risk management frameworks and management showing graphs and curves to the board, they are often moving forward by driving through a rear mirror view. The cool-headed directors should ask insightful questions to spot risk management blind spots because the greatest risk will be a real business/reputation issue that is not being properly identified and managed. The cool-headed board directors can observe thoroughly, think critically, share more profound perspective, build an effective framework for improving risk intelligence. Boards need to work closely with the management for mastering risk intelligence, identify both business risks and opportunities, keep focusing on doing fundamental things right. Being cool-headed means that you don’t jump into conclusion too soon; and being insightful means that you need to dig into the root cause, not just pointing out the symptoms, framing the questions first before asking them, having both content understanding and contextual intelligence.

Taking the stepwise GRC approach: Business governance is the other important responsibilities of the corporate board. Governance is a sophisticated process that if well executed, will lead the business to reach the next level of business maturity. GRC, business strategy and IT oversight are top three issues in the boardroom agenda today. It will allow not only to protect the existing value but also to create new value for its shareholders. Business governance and management go hand-in-hand, the business framework of “rules of engagement” are set out by the members of the board, stakeholders and investors that drive the organizational strategy, business value, corporate responsibility, and managed risk. If a board is to fulfill its fiduciary responsibilities to its stakeholders, it needs to be more than a rubber stamp, the cool-headed board directors are GRC champions who can make sound judgments and steer the business in the right direction.

Improving the board maturity continually: Senior leadership is neither equal to seniority nor the big title; at the board level, it implies the high level of intellectual and emotional maturity which is one of the essential qualities that makes a successful leader. Business is not run on emotion if destructive emotion comes in, and then you have a recipe for disaster. Emotional Intelligence as a human quality has elements such as self-awareness (knowing your own strengths and weaknesses), self-regulation (controlling emotions), empathy (understanding the emotions of others, being able to put self in their shoes), motivation (having a passion/drive for achievement & continuous improvement), and social skills (building rapport with others and influencing others). From the boardroom down to the different layer of management, emotional maturity is an indication of the organizational maturity.

An ultra-modern board is built based on progressive mindsets, leadership dynamic, advanced skills, and learning agility, to envision, inspire, influence, and innovate. The power of cool-headed digital leaders depends on a number of factors, the purpose to lead, emotional intelligence, the mix of knowledge and experience, the quality of information they receive and their collective leadership ability to lead to the deep, deep digital new normal effortlessly.

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