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The corporate board leaders should have an in-depth understanding of the digital dynamic and practice open leadership to drive the business forward confidently, improve business viability, innovativeness, resilience and speed.

Due to the “VUCA” characteristics -complexity, uncertainty, ambiguity and velocity of the digital era, the directorship in any organization becomes more critical and challenging in steering the organization in the right direction. 

Governance on the board level needs to advocate and sustain change to ensure business viability, update rules, optimize processes, develop/scale the next governance practices, etc, to enforce business alignment, accountability and improve GRC discipline.

 

BoD’s strategic oversight and guidance helps the management lead change confidently and improve business viability: Change is the new normal with increasing pace. Thus, strategy management and change management need to go hand in hand. The viable digital businesses are solid enough to give some sort of forms and meaning, and open enough to its environment, allowing the movement of information, ideas, and people in and out with less friction. The corporate board’s strategic oversight and business investment review help to fill the management blind spots, bring a fresh perspective on improving information system effectiveness and efficiency, developing a creative workforce to maintain viability and delivering high-quality business results with consistency.

To improve business viability, the corporate board should ask the management: Is your market sector volatile or relatively stable? Does it have aggressive innovators? Who plays the biggest part in the sector, competitor, customer or the policy maker? And then, the corporate board and management can work on what strategic steps they might take now that can better position the business to more quickly identify or turn the disruption into the advance. It means that the company can improve communication effectiveness, harness partnership, engage employees, foster innovation, and demonstrate business viability, resilience, to ensure long-term business success.

BoD’s governance discipline ensures seamless business alignment and collaboration: In adapting to the dynamic business environment, a digital organization can leverage the abundance of information and emerging digital technologies to improve business intelligence, agility, and speed.  How agile the business is depends on the business's ability to integrate, build, and reconfigure dynamic competences to address rapidly changing environments, build differentiated capability. Strong governance complements the management practices, to make sure different divisions of the company can communicate smoothly and work collaboratively, to develop differentiated business competencies; build a creative workforce to maintain viability, initiate continuous digital practices to improve business agility, deliver impressive business outcomes consistently, and achieve innovative forms of competitive advantage given path dependencies and market positions.

Strategic alignment is the process of ensuring all organization actions are directed to achieving common strategic goals and objectives. The corporate boards ask management the tough questions such as: How do you actually align the organization to best carry out the vision? Are your processes functioning coherently to deliver consistent results with the strategic intent? Are your people capable of producing outcomes consistent with the strategy? Are your processes, technology, and people integrated to build dynamic core business competency to deliver customer value as defined in the strategy? The strong governance approach at the corporate board level ensures the strategic alignment of business goals, portfolio management, and performance measurement systems throughout the organization to produce high performance results. Those organizations that have a high mature strategic alignment, integration, collaboration, or harmony will outperform their competitors and tend to be more responsive to the business dynamic. 

Accountability is part of professional integrity and organizational brand: The high mature digital businesses do the great work to preserve core competency even as management expands and redefines the business. Accountability goes hand in hand with the delegation of authority or power. So corporate boards give invaluable advice to the management, and hold them accountable to operate business effectively and efficiently in achieving outcomes. It’s about how to close the accountability gap and inspire an “every individual as a stakeholder” culture. Behaving accountable is the result of culture with values that need to be organized and nurtured.

Leadership and accountability must go hand in hand. If things go wrong, the management doesn't always know what is 'best. When that happens, the value is in what we can learn, and make improvement. Teams of any kind will follow only if the leader is accountable. The corporate board helps to oversee a performance management system that encourages responsible communication, enhances healthy listening-telling cycle, enforces accountability, improves decision-making effectiveness. In practice, accountability needs to be well embedded in the organizational culture, improving process transparency, in order to run a digital fit business with collective accountability that involves shared ownership, empathetic communication, and continuous improvement.

BoDs are like the steering wheel, navigating the organization toward the better pathway, perhaps optimizing routes, or saving the energy, to reach the destination promptly. The corporate board leaders should have an in-depth understanding of the digital dynamic and practice open leadership to drive the business forward confidently, improve business viability, innovativeness, resilience and speed.

Posted in: Board Room,GRC