Tuesday, May 30, 2017

The Digital Board’s Leadership, Composition, and Succession Inquiries

The boardroom composition will directly impact how they lead and which tone they will set for the entire organization to follow.

The contemporary corporate board as the directorial role plays a significant role in overseeing strategy, advising corporate executives and monitoring business performance. The BoDs should also walk the talk to digitize the boardroom with strategic imperative because often the digital tone is set at the top and echo spirally to all levels of the organization. Here is a set of the digital board’s leadership, composition, and succession inquiries.

How healthy is the relationship between the C-Level executives and the board? Both BoDs and senior leadership teams are the top leadership roles. Whereby the BoD assumes the dual role of guidance and governance steering, whilst leaving the day-to-day leadership/management process in the hands of the C-level executives. BoD should get to know the senior leadership through presentations in the boardroom and regular meetings and communications outside of it. It is important for the board to actively monitor business management for transparency, and analysis of potential long-term consequences must become the agenda in this hyperconnected digital era. At the big table, nothing should be personal, it's all about how to monitor the business performance, drive changes, optimize business processes, improve knowledge worker productivity, verify strategic plan effectiveness, and approach GRC in a holistic way. At the top level of leadership, BoDs and senior executives should leverage the structural power (the position with the organizational hierarchy) to delegate; expert power  (business and technical knowledge) to build trust and enforce leadership empathy and effectiveness, and prestige power (social connections) to amplify leadership influence.

What is the board succession plan, and how to do it effectively? The increasing speed of change and digital dynamic brought much-needed oversight and additional rigor to the leadership succession planning process at many companies. The digital board’s succession plan needs to be well aligned with the board composition, as well as the business’s strategy evolution and digital transformation. How to build a digital fit boardroom and do it effectively should be at the top of the boardroom agenda. Choosing someone based on only one criterion may limit the board. But overall speaking, digital fit starts with the mind fit, the new breed of BoD as the directorial role should be able to think outside the box, bring a fresh viewpoint to pinpoint the possible blind spots of the senior management, and improve business leadership effectiveness and maturity. The first step is to carefully select the BoD to comprise of knowledgeable/insightful, experienced, independent, and reputable experts. Boards are more effective with a mix of specialized generalists who can drill down in some areas and experts with the bandwidth and experience to see beyond their silos and all be able to communicate with each other seamlessly and complement each other’s expertise to avoid groupthink, bridge gaps, and be able to criticize the strategy constructively and advise management insightfully.

How to encourage and recognize individual directors feedback? Nowadays, the corporate board should no longer just practice rubber stamp duty, the BoDs as the business critic can provide excellent feedback which gives the top management invaluable to improve; great questions to self-aware; and keen insight to gain the in-depth understanding of the digital ecosystem. The board needs diversity, or even more crucially, cognitive difference, to provide a perspective that goes beyond the gaps in board discussion. Digital boards advocate digital professionalism and provide constructive feedback to the management and each other set the tone for building the culture of learning and innovation. Digital means rapid change, the era of options, the expanded spectrum of innovation, and people centricity. All of these changes bring the significant opportunities and responsibilities for the new breed of digital BoDs, who might recommend the updated digital playbooks with the ultramodern digital philosophy and comprehensive insight to guide through the digital transformation from the boardroom to the front line.

The boardroom composition will directly impact how they lead and which tone they will set for the entire organization to follow. Like any type of leadership, BoD leadership needs to be future-oriented, steer the organization towards the digital journey with a clear vision, a solid strategic roadmap, and effective feedback system. The best fit for the board composition depends on the Board’s current makeup and culture, as well as which gap needs to be filled. The contemporary board should be highly adaptive, highly innovative, highly informative, and highly inclusive.


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