Digital savvy Board of Directors as the advising role is responsible to steer the organization in the right direction, understand what's required and how as a high-level basis of going digital means to the business. A digital-ready board with the following characteristics has the advantage of pulling enough resources and pushing the business forward confidently.
Accountability: The corporate board sets the tone to enforce accountability and plays a significant role in taking ultimate accountability to shareholders. The corporate board’s accountability goes hand in hand with the delegation of authority or power. It is the effectiveness of the Board of Directors in delegating to the senior management team and holding them accountable that supports the management team in achieving business outcomes.
Shared accountability or collective accountability involves shared ownership, empathetic communication, team responsibility, etc. Organizations have to consciously fight against establishing a culture of no accountability, starting at the board room. The true measure of accountability is about resilience. As board directors, one of the fundamental accountability is to phrase your contribution, or potential contribution, in the economic, technological, social and environmental ramifications of the organization's activities.
Diversity: Contemporary organizations are diversified with multigenerational and multicultural stakeholders. One of the biggest challenges in running a complex business today is that we need different perspectives, different knowledge, different voices and different ways to solve problems. Corporate Boards that are too homogenous are at a much higher risk of making poor decisions or not asking the questions that need to be asked. To keep the business dynamic, the composition of the corporate board should reflect the diverse nature of its shareholders and character of their organization.
The issue of raising the board director’s profile must be addressed through better grooming and selection of board candidates, and help to bootstrap their members to the level of knowledge and sophistication required to fill the board oversight and fiduciary responsibilities. The greatest success is achieved on the digital boards that added directors with a cognitive difference, diversified experience, T-shape expertise, variety of worldview, rather than the traditional understanding of diversity (gender, races, etc), to provide a perspective that goes beyond the gaps in board discussion and shares the insight about the multitude of cognitive processes, business disciplines, and practices.
IT savvy: The fast growth information and disruptive nature of technology bring both abundant opportunities and unprecedented risks to the business today. Given how applying IT is becoming so intrinsically important to so many different enterprises across industrial sectors in the worldwide scope, corporate boards can no longer avoid, delegate, or ignore the need for technical competency among their ranks, and they need to ask more insightful questions for effective board oversight of information technology.
Information Technology is rapidly becoming an integral part of many companies’ strategic plans. There are potential issues related to the increased risk of the IT department and more and more organizations put IT oversight in their boardroom agenda. BoDs need to understand that IT is critical to their companies. IT fundamentals need to get more attention in the boardroom. Directors are particularly involved in overseeing and understanding more traditional IT issues, such as the status of IT project portfolio, their companies’ annual IT budgets, risks related to compromising customer data, as well as understanding the importance of IT to the company’s business model innovation, etc.
Adaptability: Adaptability is to be understood as the ability to adapt fast to changed circumstances. The adaptive BoDs have open mindsets to adjust their thinking processes according to the changes in the business environment and have a collaborative attitude, learning agility, and collective creativity to frame strategic problems, practice governance, and monitor risk management effectively.
The digital corporate board leadership today needs to be future-oriented, highly adaptive. Self-adaptation is a phenomenon strictly linked to seeing learning and knowledge increases if shared and consumed, board directors with a learning mind can absorb all necessary knowledge and abstract it into insight and wisdom, steer the organization towards the digital journey with a clear vision, a highly effective board agenda and a set of best and next practices.
Resilience: Resilience is the ability to respond to change and to recover quickly from setbacks. Strategic risks are about unprecedented levels of uncertainties, inherent variability and the unknown interdependencies among sources of risks that could have an effect on the delivery of strategic objectives. The corporate board with strategic resilience can sense failures, overcome challenges, and deal with setbacks with a positive attitude. A business system can gain more energy until it crosses the point of system resilience.
Corporate boards need to work closely with the senior management for mastering risk intelligence, identify both emerging business risks and opportunities and keep focusing on doing fundamental things right. They are able to keep working and focusing, even during stress and disturbance, rather than reacting to stressful situations, in order to steer the business in the direction with calm and confidence.
The corporate board takes tremendous responsibilities for steering the business ship through uncharted water, so you don't have other choices but develop your strength, change your sails for leading forward step wisely. Board directors with the above digital characteristics can build solid thinking blocks; have sufficient expertise and unique insight and become the digital provocateur to drive changes and set the leadership tone for digital transformation.
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