BoDs are leadership roles, they should not only oversee business strategy and monitor business performance but also set the tone for the culture and be talent master.
The modern corporate board plays a significant role in guiding the business in the right direction and achieve the expected business result. Due to the complexity, uncertainty, ambiguity, and volatility of the digital age, the directorship in any organization must have the agility to adapt to changes and build the ability to advise, inspire and motivate a group of people toward accomplishing shared visions and goal. Here are the five focal points via the length of the digital boardroom.
The modern corporate board plays a significant role in guiding the business in the right direction and achieve the expected business result. Due to the complexity, uncertainty, ambiguity, and volatility of the digital age, the directorship in any organization must have the agility to adapt to changes and build the ability to advise, inspire and motivate a group of people toward accomplishing shared visions and goal. Here are the five focal points via the length of the digital boardroom. Strategic focus: The board plays a critical role in overseeing business strategy, it is important to keep the board strategic focused. Also, the board as the top leadership team advise business strategy, it doesn’t always mean Board itself is being strategic enough. The board represents the ownership and they really cannot do a good job if they don't have the knowledge to challenge and set the broad strategic goals. They need to educate themselves by hearing different views about the organization, its environment & digital ecosystem, strategic alternatives and develop a clear vision on how to move the business forward. Sometimes board members’ time is stretched thin so they do not allocate enough time to understand key issues and in many cases, board members are not motivated to be strategically focused. A strategy-focused board not only has oversights of strategy but also influences the process as well. The process of strategic planning is the best indicator of how well a board really understands and invests time in learning about their companies and also identifies the levels of collaboration, synergy, trust, and confidence that exist between the board and executives of the organization.
Performance Focus: There is no question that business performance is the priority for boards. Many boards think that the role of the individual director is conformance, which has the result to stifle probing questions and the natural tensions that allow for good decision-making. 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; and, that performance is not limited to financial performance, but also to the firm's performance in creating value for employees and customers. To some degree, conformance is inherent within the value-driven performance. More specifically, the "performance" responsibility of BoDs should be focused on the maximization of
(1) Capital allocation
(2) Company performance
(3) Shareholder value.
It's not only about the performance now, but also about the future and that means an open mindset to change, with a long-term perspective.
(1) Capital allocation
(2) Company performance
(3) Shareholder value.
It's not only about the performance now, but also about the future and that means an open mindset to change, with a long-term perspective.
Governance Focus: Business governance is the other important responsibilities of the corporate board. 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. 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 are often moving forward by driving through a rear mirror view. And because the biggest risk for business is beyond those traditional graphs and curves, Boards need to master risk intelligence to identify both business risks and opportunities, keep focusing on governance effectiveness and risk intelligence.
Information savvy: Information is the lifeblood and one of the most invaluable assets in digital business today, technology is the disruptive force in digital transformation. Therefore, Digital BoDs need to become information savvy and technology-smart. The foremost thing for BoD is to realize that IT is strategic; and as such, it should be a distinct part of the business strategy telling how to maintain compliant and secure and how to enable business growth. An IT-savvy board will focus on more with KIDM: the knowledge - information and data management to capture business insight and customer foresight for strategic oversight and governance practice. The speed, accuracy, and precision of the decision which in this new market has a new level of importance and competitive value. An information savvy board also becomes more strategic and agile to fit the digital new normal.
Culture Influence: Many think boards do not pay enough attention to the culture within the company, since the culture can undermine strategy, they certainly should be concerned and seek assurance that the culture is aligned with the strategy and that the values that form the foundation of the couture are aligned with the expectations of customers. The board has to pay more attention to the culture, which will "eat the strategy" otherwise. The company needs to determine its direction, and then assure that the culture supports that strategy. The board as a top-level leadership team should set the tune to build a culture of learning and innovation. Because the business culture is reflected and influenced by policies, practices, rewards, and incentives which are often made and influenced by the board. Often, executives and the board assume that these things are correct, but employees know they are not and can tell you what gets in the way. When culture is inspired at the board level, it can unlock powerful synergies that drive performance, especially in today's world that relies so much on collaboration and teamwork.
The modern digital board has many responsibilities, also gets a lot of distractions. It has to laser focus on the most critical things to steering the business toward the right decision. BoDs are leadership roles, should not only oversee business strategy and monitor business performance, but also set the tone for the culture and be talent master, and walk the talk to become more learning agile, information savvy and innovative to adapt to the digital dynamic.
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