Initiatebodoversight

Highly effective corporate boards should have a good understanding of the organization's strategic direction and its strategic alternatives.

Change is the new normal; don’t be overwhelmed by the sea of information and constant disruptions. Great governance is in relation to vision, mission, principles, standards etc., to enhance management disciplines.

 The corporate BoDs’ challenge is how you move the “needle” forward by delegating authority downward to a series of governance committees with responsibility for policy, architecture, investment, risk, compliance, finance, etc. to really accelerate the organizational level digital transformation.

Strategy adequacy: Strategy management is about creating tomorrow's organization out of today. Corporate governance could be part of strategic planning to improve effectiveness of strategy management as today strategy and execution are not linear steps, but an iterative continuum. The corporate board oversees the strategy to determine suitability, adequacy, viability, etc, in advance, sets the priority to stay focused, identifies promising big ideas for investment that will accelerate bold change, continues to prioritize and adjust the strategy to ensure high performance results.

Technically, corporate governance needs to have direct links to each crucial business management discipline and its core processes to make sure that management is doing its job properly to achieve well-set business goals. The corporate board’s strategic oversight is critical to identify and strengthen the weakest link and determines how each part of the organization, including all of the key functions must "put it all together" to be successful in implementing the strategy holistically.

Decision effectiveness: Business world today is full of exponential information, has the very characteristics of hyper-connectivity and interdependence, making decisions is often complex thought processes which include multiple thinking and reasoning. Corporate boards take the praise or blame depending largely on their abilities to influence the business outcomes for the long run. Corporate boards scrutinize the strategic decision-making regarding business investment to unlock business potentiality, as well as assess the decision coherence across the organizational hierarchy to improve organizational decision maturity.

A decision is arguably a choice between two or more options. From information quality to process cohesiveness to employee professionalism, decision competency directly impacts problem-solving competency. Not only should BoDs scrutinize decision-effectiveness of the management; but they also should improve boardroom decisions to enhance governance disciplines. Open-minded BoDs are willing to change their mind when faced with new and relevant facts, overcome unconscious bias or group thinking, to improve corporate board effectiveness and agility.

Risk intelligence: Organizations encounter more risks than ever due to over-complex business dynamics with blurred territories and pervasive information growth. Lacking risk awareness creates more blind spots uncovered and gaps unfilled in business management. Corporate boards do not manage risks but oversee risks. From the GRC perspective, the corporate board’s responsibilities include taking control of the softer issues such as making or monitoring policy, the strategic thinking of GRC, setting risk appetite, etc. The board must be comfortable that management is identifying and appropriately responding to risk on time, and the business is on the right path to transform from risk mitigation to risk intelligence.

The board has a role in seeing to it that the company has an effective enterprise risk management framework; the management has put in place an effective risk-management process to manage risk effectively. The BoDs assess whether risks are undertaken and managed consistently with the established risk appetite. Senior board leaders should proactively gain the feedback from trustful sources, rather than just focus on the information fed to them. So they can set the right tone for risk tolerance, have the right dose of risk appetite for improving risk management effectiveness and overall governance maturity.

Highly effective corporate boards should have a good understanding of the organization's strategic direction and its strategic alternatives by looking into an unknown future and attempting to define the landscape with its risks and opportunities. They can sense emergent opportunities and predict potential risks, prioritize and put significant efforts into GRC practices, in order to steer the business vehicle in the right direction and achieve high-performance results with continuous deliveries.

Posted in: Board Room,GRC,Strategy