In Troubled Times, Boards Must Step Up
We return to boardrooms after a summer of extreme upheaval that looks set to continue into the autumn. There is a palpable sense of systemic instability in the face of political, economic, technological, social, and indeed meteorological uncertainty.
From News Corp. to the revolution in Libya, from the continuing economic upheaval to Steve Jobs announcing his resignation as CEO of Apple and to HP restructuring their business, and from earthquakes to hurricanes and floods, each event is yet another chink in our sense of stability and control of the environment around us. The reverberations of this will be felt in every organization, and in every stakeholder from employee to customer and to community.
To my mind, this is precisely the time when boards show their mettle. Each director must dig deep and demonstrate wisdom, fortitude, skill, determination and vision, and bring that to bear around the board table.
First, we need ensure a balance of what I call grounding and stargazing. To me, grounding and stargazing are two sides of the future proofing coin of the modern board agenda. Grounding is about making sure the company fulfills all of its legal requirements, manages risks properly and does business in a responsible way.
Balanced with this is stargazing. This is where a board demonstrates its value in making sure the organization is ready and able to become the robust and resilient business that is capable of responding effectively to the unknowns in its future. It is where the board helps address head on the “cone of uncertainty” that all organizations are facing.
To do this, boards need to ensure that the issues they are talking about reflect the key challenges that their organizations will encounter in the next six to twelve months and into the next ten to fifteen years. There are some essential things boards and board members need to think about, no matter the size, location or sector of the organization. They are infrastructure, technology, internationalization, communication, and the balance of continuity and change.
Is the organization addressing issues around energy consumption, including integrating clean tech and sustainability? Is it covering infrastructure and from all angles—from facilities to building stock and rolling stock and the risks they may be exposed to, from changing work patterns and practices to the ways in which companies engage with their stakeholders and the local communities where they are based?
Is the organization flexible enough to recognize important technological developments and incorporate them into existing business models? Does it recognize places where technology and technological innovation may be fundamentally changing the way their organization is run in the future?
No matter what a company’s main business is or where it is located, its success will ultimately depend on grasping the internationalized environment in which it operates. The world today is politically, socially, and economically more inter-connected, and this offers opportunities and poses risks at the same time. Is the company focused on attracting the best people from anywhere and put them in a place where they work most productively for the success of the company as a whole?
Is the company effective and dynamic in its communications, both with all its stakeholders (customers, staff, investors, etc.) and with the board room? Companies that send out a message of a forward-looking, socially and environmentally responsible, and politically aware strategy and do it by old and new forms of communication also send a message about the right balance between continuity and change, about the unity of word and deed, demonstrating in action to which it rhetorically commits.
5) Balancing Continuity and Change
Boards will only succeed in their task of future proofing their organizations if they see the connections between the old and the new. Is the board embracing new ideas and new ways of thinking while at the same time not ignoring or disregarding the old? Is the company being driven by short-lived ‘flavors of the month’ or temptations of every disruptive technology or idea that comes into the room, rather than being guided by the needs and vision of the business?
Asking questions is key. I am deeply concerned as I hear of board members who hesitate to ask questions for fear of looking foolish, straying into territory beyond their scope, or not keeping to the board schedule. If tough questions can’t be answered successfully in the relative safety of the boardroom, then they won’t be able to be addressed in the cold hard world of every day operations or when 20/20 hindsight kicks in because a strategy doesn’t work. It doesn’t do the organization any favors to avoid the tough questions.
Organizations of all kinds, be they public or private, profit or not for profit, educational institution or Fortune 500, will need the best from their boards and from their directors. Whether you have been on summer hiatus or not, make your next board meeting your best. Be productive, generous, positive, and contribute to growth. If we all rise to the challenge, then we can help address and overcome our collective and deep sense of unease. By leading through example, boards will help organizations face the sense of instability with aplomb, and emerge stronger, more self-assured, resilient and capable.