Monday, November 28, 2022


 The purpose of running a digital corporate board is to direct the organization in the right direction.

The business environment becomes so volatile and uncertain, governance is to establish a consensus of what is normal for your organization; manage exceptions as they arise; update your consensus of normal as the organization changes. There’s a correlation between corporate governance and business performance, and there's a clear connection between bad governance and poor performance. 

Corporate boards play a significant role in governance enhancement and performance monitoring. Organizations need to evaluate its corporate board effectiveness, continue to check whether their governance model is out of date, and how to develop the best and next practices for improving governance maturity.

The most powerful tool of a Board of Director is the capacity to ask good questions for verifying, clarifying, and improving governance effectiveness
: Strong governance at the corporate level requires thinking, asking questions, and collecting quality information. That is not the act of rubber stamping! Every corporate board decision is particular to the objectives, circumstances and corporate board dynamics. Asking good and pertinent questions is critical for governing changes so the directors would have to be able to quickly assess any numbers and facts they are given, against applicable benchmarks and detect relevant hints for further questioning or confirmation.

Many times governance fails because the wrong people were making decisions in the wrong way. To improve decision effectiveness and governance disciplines, BoDs need to catch the deep insight into how things work by analyzing the aggregates. Insight BoDs enforce a strong governance system which defines how decisions are made: when, by whom, and how, ensuring individual decisions and behaviors comply with collective values, strategic business goals and objectives.

Initiate step-wise governance by assessing prioritization-strategy, risk-monitoring approach: If a corporate board is to fulfill its fiduciary responsibilities to its stakeholders, it needs to spend time on strategy oversight, risk enhancement, performance monitoring. To improve corporate board effectiveness, the key point is to prepare crucial issues, collect information and feedback, better to invest the time up front to address concerns and achieve a workable agreement. An information savvy board agenda should be focused on the performance progress toward the goals, targets, schedules., etc, of the value maximization and business performance acceleration.

Corporate boards need to understand how to delegate, which means articulate what is delegated and then monitor, not micromanage what is delegated. The governance system is hierarchically defined by a purpose, and enforced by intelligent business processes. A well set up governance system would have the corporate board involved in developing, setting and monitoring the companies' strategic planning, orchestrating strategy development across the enterprise to achieve high performance results consistently.

Innovation governance on the board level needs to advocate, steer, and sustain innovation:
Innovation is a differentiated business competency. Over governance perhaps stifles innovation. Under-governance increases risk of innovation management. Thus, corporate boards need to deal with the poor governance and eliminate all the bureaucratic regulations that might cause business stagnation. Improving GRC disciplines involve updating rules, optimizing processes, developing, and scaling up new governance practices. This ensures that innovations will be supported by all stakeholders and overseen by corporate boards.

Leadership and accountability must go hand in hand. The corporate board plays a significant role in taking ultimate accountability to shareholders for the performance and conformance of the organization. It’s important to enforce effective innovation governance by tiering innovations and the innovative culture to the organization's strategy; assessing innovation investment return on investment, enhancing open door listening, harnessing transparency, enforcing accountability, and monitoring performance accordingly.

The purpose of running a digital corporate board is to direct the organization in the right direction. The corporate BoD’s plays a significant role in leadership exemplarity and practices for overseeing information/innovation/strategy management agenda, improving its differentiated value across the company, enforcing GRC disciplines and monitoring its performance continuously.


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