Leading High Performing Boards to Add Value.
After two years of research into what makes a high performing board and top team, I started working with boards here in the UK, across Europe, the USA and later, S Africa and it became clear that few boards actually add value. They have experience but many have stopped learning while the world has moved on. Non-Executives often feel they could contribute more but not always integrate into the board well. Directors talk about succession or diversity but don’t know what to do about these. Yet a dynamic board can be a huge competitive advantage. A diverse board can provide wider perspectives, be more aware of risks, have connections with stakeholders or government and have the credibility that executive teams may lack. So how do you add value to a board?
Board development has to go beyond corporate governance, roles or executive development provided by business schools. Today boards are required to be clear about risk including the impact from climate change, the ability to connect with all stakeholders, understand their role in innovation, make time for strategic reflection and be prepared for a crisis. Most of all those on a board require the ability to see multiple perspectives and develop their cognitive capacity to deal with complexity and uncertainty. However, the first challenge is to overcome the belief that they have all the experience they need and don’t require further learning and development. We are now facing a very different post-pandemic world, it has never been a more important time for board development.
In addition, the role of the CEO has expanded to be accountable to more people. Until recently, the primary responsibility for a company was to create financial value for its shareholders. Today, companies must create value for many stakeholders to succeed. This includes its employees, suppliers, local communities and the planet. This widening of value creation isn’t just a good thing to do but a strategic operation that ultimately benefits shareholders too. By doing so, a company is stronger and more sustainable, more likely to attract the best employees and customers.
What now for CEO’s in a post- COVID future?
PWC run a global CEO survey each year and their 2021 survey for the UK they have called ‘year of reinvention.’ In the UK CEOs recognise that there are decisions that cannot be put off any longer that require investment in key areas that include:
- Digital Transformation
- Cyber security
- Sustainability and
- Employee Development for the digital age.
This in a time of economic uncertainty yet investment is required to turn around a year of significant disruption to ensure a positive change for the future. The PWC report goes on to show that although 86% of CEOs are concerned about the uncertainty, 51% expect moderate growth and 26% expect strong growth in the next year. They believe 86% will come from organic growth and 70% from operational efficiencies, while 59% say this will come from a new product or service.
The top concerns for UK CEOs now are:
- 94% further pandemics and health crises
- 91% cyber threats with so many working from home
- 86% uncertain economic growth
- 77% policy uncertainty from government
- 73% availability of key skills especially in digital skills
- 70% climate change compared to 44% in 2019
Over half of CEOs believe they are responsible for delivering a skilled, educated and adaptable workforce as a business priority. This at a time when the C-Suite is expanding with additions such as chief data office, chief digital officer, chief information/security officer, chief diversity officer, chief sustainability officer, chief robotics officer and even chief purpose officer!
Today’s Chief Executives are confronted with an incredible rise in complexity from alternative, disruptive business models, global changes, society, governments, new risks and opportunities and challenging economics. What they need now are strong boards made up of high- quality, focused individuals who add strategic value. They need accurate information, effective structures and processes that are not paralysed by silos. They require board dynamics that enable good decisions that are an asset for their organisation. Above all in today’s complex world, it is required to not only understand but ensure an organisation’s leadership today is more than one person. Leadership capability across the board, values-based governance, accountability and responsibility, and adding value is the requirement for boards today.
Working with boards has been both a challenge and immense personal reward when they come together and act as one dynamic group. It requires honest conversations, challenging questions and the desire to see people act with their full capabilities. Whether in Milan, Stuttgart, Philadelphia or London, leaders being at the top of their game will produce impact in a world where certainty is rare. Welcome to the world of the CEO in 2021.