Friday, December 30, 2022


An effective board enables and directs management towards good outcomes, and monitors performance.

Complexity and uncertainty are part of reality. The real BoD’s dilemma is that driving the business forward is extremely difficult, because you need to look into an unknown future and attempt to define the landscape with its risks and opportunities.

 As going digital is a “paradigm shift” - a fundamental change in thinking at the board level is required to tackle challenges. There are so many issues the boardroom has to deal with; this implies that Boards of the future will need to work much more closely and collaboratively, to guide the senior management team through effective questioning, advising, coaching, and assessment of the business strategy and the organization's execution.

It takes transformational leaders to repeatedly address the future regularly: Corporate boards oversee business strategy management and monitor performance. However, many BoDs are under-educated about their role and responsibility while the business change is accelerated across the global scope and knowledge cycle is shortened significantly. The real-time business insight can help corporate board leaders make effective decisions timely, make reasonable inquiries and connect all critical dots for diagnosing the problems and fine-tuning performance smoothly.

Business foresight and sound judgment become more imperative when uncertainty, ambiguity, complexity, and doubts are major hindrances to decision making. Insightful BoDs are able to sense that the digital transformation is multifaceted and highly volatile, helping the top management identify blind spots, optimizing manageability. The corporate board with strategic resilience can sense failures, overcome challenges, develop risk intelligence to improve resilience. They are able to deal with setbacks with a positive attitude and be 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 boardroom culture is engendered by board leaders who set the tone and govern boardroom mindset and behavior:
With high complexity and uncertainty, ignorance of the unknown is the huge pitfall for decision-making or problem-solving. In the context of the desirability of diversity in the boardroom, choosing someone based on only one criterion may limit the board's performance and potential, and there are quite a lot of qualifications that need to be considered. Effective boardrooms are heterogeneous, with complementary mindset, knowledge, professional competencies and personalities. So they can set the tone to advocate a culture of inclusiveness.

In fact, culture must be fostered from the board of directors downwards; otherwise, no real sponsorship takes place, encouraging autonomy and innovation. Teams of any kind will follow only if the leader is accountable. Accountability goes hand in hand with the delegation of authority or power, that starts from the corporate board. Accountability needs to be well embedded in the organizational culture, with values that need to be organized and nurtured to improve overall business competency for the long run.

Corporate boards must recognize the importance of principle-setting or policy-making:
Policies are communication from the top. There are correlations between policy, leadership and commitment. Policy should be updated to enhance the change you would like to see. If not, then the policy is irrelevant. Corporate boards play a significant role in setting and monitoring policy compliance as a governance activity. Good policies lubricate the business value chain and streamline business logic, so people crossing the boundaries will pull in the same direction to drive progressive change.

Effective policies shouldn’t enhance the “we always do things like that” mentality and stifle change. When circumstances change, policies need to be updated to ensure people continue to do the right things. To be effective, the boards should develop policies and practices to ensure ongoing evaluation and education of current directors. BoDs must also advise and delegate the management team to keep reinventing their organizations by improving problem-solving competency. By following a right set of policies with flexible management disciplines, the digital workplace can be provocative, passionate, from letting go of the current reality to allowing an unknown future state to emerge, and solve problems proactively.

An effective board enables and directs management towards good outcomes, and monitors performance. If the results are lacking then the board effectiveness must be questioned. As the top leadership team, the corporate board just has to step into the digital vision, exemplify digital leadership effectiveness, and walk the talk in driving the business transformation effectively.


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