The corporate board needs to shift from reactive to an active and proactive mode for adapting to the dynamic business environment with continuous disruptions.
The corporate board is one of the most critical leadership pillars in modern businesses. The level of the board accomplishment may vary but the essential competencies will remain the same, BoDs need to be insightful, strategic, effective, and influential. In reality, the time of board members is stretched too thin so they do not allocate enough time to understand strategic issues and many boards aren't active enough to catch the derailment of strategies. In practice, how to shape a strategic boardroom by taking a rational approach, leveraging balanced scorecard, and develop the best and next digital practices?
The board’s oversight of appropriation: A truly strategic Boards can add real value to management in the strategy arena by matching priorities and resources to ensure that management can see and agree on what has been done and what should be done next. Especially if management confuses strategies with the longer-term financial plans. In today's world with such frequency of change and competition showing up in the most bizarre ways, can a company actually do a real "Strategic Plan," and in what ways does the Annual planning retreat need to change? To oversee business strategies objectively, BoDs need to educate themselves by hearing different viewpoints about the organization, its environment, and digital ecosystem, strategic alternatives and develop a clear vision on how to move the business forward. A strategic board is able to identify pitfalls on the way, monitor strategy implementation, and advise senior executive teams to not only make a good strategy but also how to overcome barriers and improve the overall strategy management success rate. Great board directors are insightful business critics who can provide excellent feedback which gives the top management invaluable advice to improve management effectiveness and set good policies to help the business move forward and make the digital paradigm shift.
The scorecard allows you to focus on the most important things and tailor the needs of varying business stakeholders: Corporate boards nowadays have to spin many plates (accountability, strategy, policy, and monitoring) at the same time, become more performance driven, not just compliance focus. The balanced scorecard is a strategic performance management tool supported by design methods and automation tools, a semi-standard structured report, which can be used by BoDs to keep track of their activities and decisions and monitor the consequences arising from these actions. It is also important to provide a “balanced” view of tradeoff variables, be able to see what the outcome will look like throughout the transition, and then there should be a consideration for a balanced scorecard that measures the progress of the goals you want to achieve. The important governance indicators on the balanced governance scoreboard include such as:
Vision & strategy and business competency oversight
Organizational management performance monitoring
Innovation (Upcoming trends, information technology, disruptive innovation, etc. ) oversight
Business risks (operational risks, reputation risks, brand risks, etc.) oversight
Culture (diversity, inclusion, board composition, etc. ) oversight
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The corporate board needs to shift from reactive to an active and proactive mode for adapting to the dynamic business environment with continuous disruptions. A strategic board is confident and able to accurately judge the coming curves and barriers on the path, improve the boardroom effectiveness, and lead the digital transformation journey smoothly.
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