Innovation in the boardroom is no longer a nice to have, but an essential business survival tool. The business landscape worldwide is undergoing significant change. Continually evolving technology, coupled with unpredictable challenges influenced by the global political climate, means that corporations have to be prepared to face major transformation at any time.
The Board Services Practice Group at Stanton Chase knows that today a successful business means being an agile one. We advise companies to focus on improving quality, reducing process cycle times, and keeping abreast of changes in their respective industries. The implementation of digital systems that provide real-time analytics and predictive data makes this transformation more manageable.
Decision makers operating in an agile environment that have access to accurate analytics and predictive data in real time can make changes to optimize processes before there are negative consequences. Analytics can identify issues exiting in any system, and predictive data provides possible outcomes based on current conditions. This is very compelling information that empowers decision makers with foresight and the opportunity to avert problems before they happen.
Digital transformation and a continually changing trading environment must be understood and embraced at the boardroom level as well on the ground if companies are going to stay competitive in their markets.
This means that board members must be more involved, adaptable, and innovative than ever before. They have to understand the concepts of digital transformation and Artificial Intelligence (AI), and how they can benefit the organization. If board members do not make the leap and embrace digital transformation and AI, they could unintentionally sink a company.
Are your board members up for the current challenges?
With so many changes affecting every aspect of business, continuing to do things the way they were done before is untenable. A strategy that worked well previously (maybe even as recently as a year ago) might not necessarily work well in today’s evolving business climate.
Digital technology is not the only influence impacting organizations. The introduction and implementation of changes to corporate governance, elective codes, and compliance regulations have an impact not only on companies but on their boards as well.
Boards resistant to change will eventually be rendered dysfunctional, and the corporation will pay the price. At Stanton Chase, we advise our clients to look for symptoms of lack of functionality within their board, including board members: not being updated before and between meetings; not fully understanding the company’s constitution, policies, and procedures; failing to take decisive action against the misuse of company assets; failing to take action or divulge financial misreporting or conflicts of interest; and failing to manage risks by not monitoring potential threats to the company.
Board members must fulfill their responsibilities of staying up to date and informed; if they do not, it is critical to implement drastic change.
Ensuring that Board Members are proactive and involved
Shareholders must not stand back if the board is heading in the wrong direction. Steps can be taken to rehabilitate a troubled board, but it may be necessary to remove individuals or dissolve the board entirely to make way for proactive change.
· Digitalizing enterprise governance
Proper enterprise governance is essential and digitalizing governance processes is the way of the future. A board must use and embrace technology and innovation in the boardroom for business success.
Implementing an Enterprise Governance System (EGS) equips board members with the right set of tools to effectively engage and have access to pertinent information. Boardroom technology means that board members can identify and address issues that arise quickly and from an informed perspective. Digitalization gives board members access to the right information, at the right time, and at the right level of detail to make the right decisions. An EGS will certainly improve the performance of a board that is open to change and innovation.
· Developing a comprehensive board director framework
The right mix of skills, competencies and characteristics is vital to building an active board that will deliver in the best interest of the corporation. It is imperative that a board is comprised of individuals with specialist skills in areas pertinent to the business. Also, each board member must have the competence and experience necessary to meet their obligations and responsibilities as members of the board. Finally, board members should have a track record of utilizing personal wisdom, demonstrating strength of character, and showing courage in making decisions and judgments when faced with difficult and complex matters.
Having a comprehensive and regularly updated framework in place to identify vital skills and experience when selecting board members will help to ensure that only the most suitable individuals are appointed.
The face of today’s innovative boardroom
The survival of businesses today is often dictated by decisions made in the boardroom. Board members have to be actively involved in every aspect of a corporation, have their finger firmly on the pulse of change, and also be open to and actively promote innovation and transformation.
Innovation in the boardroom is a combination of keeping track of digital transformation, implementing AI through an EGS, and appointing the people with the best skills and attributes for the board.
The Stanton Chase Board Services Practice Group can help you assess the strengths of your current board, make recommendations, and assist you with implementing change. Each business has its own unique needs, and with our vast global experience, we will positively determine how to elevate your board to ensure business success.
About the Author
Panos Manolopoulos is the Global Leader Board and CEO Services Practice Group and Managing Partner in the Dubai office.
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