Wednesday, April 22, 2020

The Ultra-Modern Corporate Board with Three “Digital Powers”

Power is a great thing if you can use it wisely to make a positive influence and empower others to do the same!

Due to the complexity, uncertainty, ambiguity, and volatility of the digital era, the directorship in any organization must envision the future boldly and influence changes proactively. There are quite clear processes for the interaction between management and the board; oversight, supervision, development, and mentoring of management, typically at the higher executive levels.

The corporate boards have a set of “digital powers” to inspire and build the right set of digital principles and policies to catalyze changes and enforce governance discipline.

Supervisory power: Governance is the structure and processes of authority, responsibility, and accountability in an organization. The "possible governance methods, techniques, structures, etc" are based on the design of a management system which generally has a strong process element and the manner in which those management systems mesh with the governance arrangements. In its supervisory role on behalf of the sovereign power, the Board of Directors delegates the operational management of the company to the executive power. This power safeguards the business evolution and sustainability preserves the company for possible deviation or risk and informs the shareholders on a regular basis on those subjects.

The board exercises the supervisory power in organizing the corporate assets toward the achievement of the corporate vision and mission. Keep in mind that the purpose of the Board of Directors is to review and recommend the company strategy, as well as protecting the value of the organization. The Board of Directors needs to define clear milestones or Performance Indicators to control the behavior of the progress and monitor business performance periodically, oversee the strategy and advise management so as to ensure the best fit between short term profitability (shareholders) and long-term sustainability (stakeholders: employees, government, society).

Expert power: Due to the exponential growth of information and the shortened knowledge cycle, expert power is perhaps more powerful than other types of powers in the digital era. Today’s top leaders need to deal with constant ambiguity, they naturally gravitate to a leadership role when things are unknown, things will change, technology is involved, or a tough problem has to be solved, etc. Top organizational leaders such as BoDs should practice knowledge power relevant for either solving tough business problems or coaching the next generation of business managers or professionals.

The highly influential leaders make the splash based on their knowledge and insight and continuous delivery, not just the follower to chase the waves blindly. Knowledge is the ‘power’; wisdom is the exceptionally effective use of power. The expert power has the foundation of in-depth knowledge, profound insight, and abstract wisdom, Wisdom can provide a moral and ethical framework or boundaries for the use of expert power effectively. The top board leaders with high brainpower and energy can clarify a clearer vision, shape advanced mindsets, balance hard and soft skills, and build a portfolio of leadership capabilities in lifting leadership effectiveness.

Influence power: Leadership is an influence, the leader’s influence is based on courage to inspire, confidence to assert, wisdom to negotiate, and uniqueness to bridge. The corporate board takes the praise or the blame depending largely on their ability to influence corporate governance which has a direct link to each business and their processes; not only from the financial results, but also from the involvement and signs being displayed inside the organization, about what guidance, values, and principles governing the company's commercial activities as well as the business outcomes.

Leadership influence is made via inspiring, to encourage others toward your vision by communicating in-depth and breadth; Influence is made via asserting, to present ideas via confidence, persuasion, and expertise; Influence is made via negotiating and exchanging, to get others’ see your point of view, make tradeoff or compromise. The degree of leadership influence is much more complex than the leader’s title or personality.

Power is a great thing if you can use it wisely to make a positive influence and empower others to do the same! In understanding power, you can see how it can be used and then how you can give it to others to achieve common goals. Digital leaders need to practice multifaceted power in today’s knowledge economy, to build trust and enforce leadership effectiveness and maturity.


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