Thursday, June 1, 2017

The Digital BoD’s Leadership Inquiries

The board competency will directly impact business competency. Board must set an example of leadership which permeates through the entire organization.

The Corporate Board plays a crucial directorial role in the modern businesses, it defines governance principles and practices, oversees business strategy, provisions resources, sets business culture tones and makes good policies for talent management. Here is a set of digital BoD’s leadership inquiries.

What do positive policies look like? How can BoDs set the tones to build a high-performance business? At today’s “VUCA” digital dynamic, organizations face both unprecedented opportunities to grow and hyper-competition/great risks to survive. It is a continuously changing world, and no organization can afford to stick to its old ways of doing things. The directorship in any organization must have the ability to guide, inspire and motivate a group of people toward accomplishing shared visions and goal. To maintain the positive environment, the corporate board plays a more significant role in overseeing business strategy, setting principles and policies, and making the sound judgment on an assurance of corporate action within a framework of practical knowledge. Keep in mind that it is the policies, procedures, rewards, and retributions that drive behavior and it is the employee behavior that expresses “culture,” the collective mindsets, attitudes, and behaviors of the organization. However, the overly restrictive policies will lead to micromanagement or too much control which leads to business bureaucracy and ineffectiveness. Increasing competition also demands some cultural changes where rigid practices may have to give way to flexibility in the manner of carrying out businesses. The good policy should like the light to guide people through, not like the hand to manipulate or push over.

Are your leaders balancing short-term, tactical decision making with the long-term goals of the organization? Corporate boards should oversee the decision maturity of business management, they also have to improve their own decision effectiveness in the boardroom. The board's decision assessment is part of strategic oversight and performance monitoring because the overall strategy management is decision management and performance management continuum. Inside the boardroom, decision style is part of the board culture, a truly decisive board is democratic, cogitative, and proactive, bring different opinions and diversified viewpoints to make collective and wise decisions that get supported by all. As a board member, you have to be assured and assure that the best idea always wins, and business executives can strike the right balance of short-term, tactical decision making with the long-term strategic goals of the organization. Try to make the harder right decision, without too many regrets for the long term. If a decision is too complex, if a clear outcome is uncertain, try not to be the winner of close votes on important issues. You will conceivably spend much time, energy and focus wrangling the dissenters as the process unfolds. Often company executives do not have an impartial view on their function, every day they are battling their corner for resources, funds, and sometimes recognition, and, therefore, cannot be seen to be objective. Therefore, a well-balanced company board with independent BoDs usually means that decisions are taken somewhat more impartially since the independent BoDs are not tied to the company as the executives. Hence, the corporate board can complement the executive team's cognition and skills for improving decision effectiveness. Governance is a sophisticated process that if well executed, will lead to better decisions. It will allow not only to keep the existing value but also to create new value for its shareholders.

Does the board do enough to audit corporate culture? What is the board culture and how does it contribute to the board’s ability to advise management effectively? In an ideal board world, the culture should be to listen, consider, adjust, listen some more before acting. In a simple, yet quite profound way, one of the best explanations of the meaning of culture in an organization was simply to say "This is the way we do things around here!" The totality of behaviors, practices, values, vision, mission, strategy and risk appetite is the definition of culture. The culture is the most important element to an organization achieving their strategic goals in today's VUCA digital age. Many say 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. The people at the top must set the tone and be both culture-conscious and culture cognizant, as maintaining and developing the culture of the organization is the most important task for the senior leadership team. So the two expected governance practices of the Board include (a) auditing culture, assuring to the board, and what that would look like; and (b) the board reporting on culture to shareholders and other stakeholders. Inside the boardroom, it's more about the boardroom culture engendered by board leaders. It’s all about leadership from the top which sets the tone and governs boardroom behavior. Culture and brand are the most important "soft" element that a company will make since they will define how the company interacts with its various stakeholders.

The board competency will directly impact business competency. Board must set an example of leadership which permeates through the entire organization. An effective and efficient Board can reflect, identify and mind the gaps on their own boardroom turf, such as self-awareness, business insight, leadership capability, learning agility. Stop creating silos, take long leaps. Digital BoDs today is the mastermind of digital transformation who can also walk the talk to get the board digital ready.


Post a Comment