Wednesday, May 23, 2018

Building the High Impact Digital Board with Dual Roles of Guidance and Governance

 The modern board needs to be open-minded, foresightful, knowledgeable, innovative, gap-minding and committed to practicing duel role of guidance and governance effectively. 

The fast-paced changes and overwhelming growth of information bring both significant opportunities for business growth and unprecedented risks businesses have to deal with. Organizations today are not mechanical systems that keep spinning in a static business environment, often go nowhere.

 Digital businesses are organic living things that need to continue growing in an expanding business ecosystem with high velocity and hyper-complexity. Therefore, the corporate boards, as one of the most critical leadership pillars in modern organizations, play the crucial dual role of guidance and governance, to make a high impact on the digital paradigm shift.

Make the high impact on policy setting and digital principle making: We are in the age with the mixing of old and new, physical and virtual; abundance of information but still the scarcity of insight; the birth of new technologies and the break down of silos or outdated concepts or things. Therefore, highly impact boards play a crucial role in making good policies for encouraging great things to happen easily, letting capability shine, instilling positive energy, and setting the progressive tone to push changes and promote innovation. The modern board can set a clear choice and make well-defined principles among future scenarios that advocate advancement and promotes positive behaviors. At the board level, “talk the walk,” is, in fact, crucial, as it directly impacts on how well the board can abstract and make good principles to unify, not divide; how effective the board can exercise their duty; and how capable the organization can “walk the talk.” As businesses get more cut-throat in the hyper-connected digital environment, good policies set the tone for encouraging creativity, motivating learning, enforcing risk-management, and building the working environment in which everyone is at the same playing field to follow the same set of rules despite differences in roles/job titles.

Oversee strategies, as well as guide senior management with invaluable advice: Top directorship roles such as board directors are supposed to be the guiding force in the enterprise, as the steering wheel, envisioning and leading the business toward the uncharted water and blurred territories. They provide excellent feedback which gives the top management invaluable advice to improve management effectiveness. Digital boards should be able to see further and perceive better than others in order to steer the business on the thorny journey of the digital paradigm shift, set guidance about what core to preserve, and what future to stimulate progress toward. Therefore, to build high impact, digital BoDs should accommodate the value of alternative perspectives, respect diverse opinions. The important issue is how the board assesses and converge the diverse thought into sound judgments and making wise decisions.

Practice effective governance disciplines: The business environment becomes so volatile and uncertain, governance is not the act of rubber stamping. If a board is to fulfill its fiduciary responsibilities to its stakeholders, it needs to simply look from a different stance, ask different questions, and take the step-wise governance scenario: Assess--approach--prioritization-strategy-risk-monitoring. For an organization embarking on a digital journey, it might be good to start at the top, cultivating the risk intelligent culture. It is critical to look at leadership, culture, staff training, existing processes, and existing technology first, make improvements if necessary, then determine whether new approaches/methods/tools would be a good addition to the mix, to ensure effectiveness, efficiency and high performance of management practices.

In a world with so many over-complex and interdependent problems, the modern board needs to be open-minded, foresightful, knowledgeable, innovative, gap-minding, and committed to practicing duel roles of guidance and governance effectively. The corporate directors today are required to exercise influence over volatility, manage uncertainty, simplify complexity and resolve ambiguity in the dynamic digital environment, to steer businesses in the right direction and become the mastermind of digitalization.


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