It's time to push kicking and screaming board executives into the future
We need to free non executive directors to take a more outward facing perspective and to develop their understanding of the emerging frontiers of business
That wonderful BBC news headline Algorithm appointed board director brings home the impact that artificial intelligence has already had, and will continue to have, on the workforce and organisations – in fact, on everyone. So it’s not surprising that the Deloitte Global Human Capital Report 2017 cited 'workforce and organisational changes' as the number one most important trend facing companies, with agility being the watchword solution. Another sobering statistic from the same report, underlining the pace of change, was that 'only 12% of the Fortune 500 companies from 1955 are still in business, and last year 26% fell off the list'.
Increasingly there are calls from many directions for boards to become more strategic in their deliberations and shift from being predominantly backward looking to becoming forward looking, outward 'headlights' for their organisations. For this to happen, the combined experience, wisdom and independence of non executive directors (NEDs) should be leveraged to engage and shape the executives’ vision of the strategy as it applies to the company in its business context. This in turn requires an upscaling and shift in our thinking on the knowledge, capabilities and skills of NEDs.
Louder and louder voices are calling out the disruptive potential of future changes in technology, workforce profile and the sheer pace of innovation. While many of these voices have been around for years, there is a more recent sense of convergence of ideas from closely aligned streams. The 'big bang' disruption of digital technology and innovation is increasing in pace. The social structures are spinning people off earlier and earlier into new entities where many who have never reached the corporate ladder see their own ideas, control and reward as their only way ahead.
INSEAD, among others, is illuminating this converging sense of speed and interdependency fuelled by increasingly accessible, useable and intelligent systems. As a board, you may be operating in a business context where the speed of change and levels of dependency are both low, which means that these trends will be somewhat muted. But for the majority of us, speed, interdependency and the underlying rapidly shifting sands, are becoming increasingly a way of life.
The impact on boards is to push them, sometimes kicking and screaming, into the future. The current method of choice is to set up a separate 'digital board' to advise the board, a very old school response to a critically modern issue. Board directors of the future will need a more outward looking focus on the strategic landscape. They will need to be knowledgeable, experienced and strategic beyond the narrow confines of a single specialism, sector or country. The multifaceted, international director will know finance, but more importantly will be able to understand, conceptualise and surf emerging trends, and coach an organisation and its executives to build a fast, flexible and agile company where sustainability is the new watchword.
As the robot financial controllers take their spot on the board, they will rapidly process in real time myriad pieces of financial information into an accessible, understandable and accurate financial and organisational picture of the business, with appropriate call outs for off-plan performance. Robots are good at this. They will support and free the NEDs to focus on understanding the more fragmented and emerging frontiers for the business, where human intuition, interpretation, insight and connections can be readily leveraged and applied to discern the routes ahead. Humans are good at this.
This is a call out for all who appoint and vet NEDs on to boards to be careful what they wish for. Deeper and deeper levels of financial knowledge and expertise will tend to produce a myopic view of what constitutes effective company performance, as well as a disconnect with the real world outside the financial bubble. We need to open up our boards to wider thinking, diverse viewpoints, multifaceted experience and real world engagement to make them increasingly relevant in a modern, dynamic business environment.
The current method of choice is to set up a separate 'digital board' to advise the board, a very old school response to a critically modern issue. Board directors of the future will need a more outward looking focus on the strategic landscape