Future of Board of the Directors
Industries were already moving quickly toward digital business models pre-pandemic. The knowledge and experience gaps in the boardroom were becoming more pronounced. Then the past year pulled the curtain back on several systemic failures – in health and eldercare, business, politics, and society’s tolerance around racism, social justice, the environment, the future of work, and the expanding wealth gap.
Many boards have been paralyzed over the last year trying to manage a wide range of complex issues often in opposition to each other, such as ensuring the business’s financial health in the current quarter while remaining focused on the longer-term interests of their stakeholders. Directors have been forced into the trenches with the executive team to manage these crises, and board meeting frequency has increased as a result. This disruption has made for a more dynamic working environment where board directors learn to test new governance approaches proactively.
Technology is now the core of every business
Times of upheaval drive innovation, break barriers, flatten traditional hierarchies, and create porous organizations. Technology is now the core of every business. Leaders need to seek out internal opposition to change, including the culture that clings to the past and believes that failure is not an option.
Pre-pandemic digital transformation projects did not require senior leadership or the board to prioritize their understanding of their information security strategy,” says Lloyd Komori, C.Dir., faculty for The Directors College and former chief risk officer. “The rapid escalation of technology-related initiatives in response to the pandemic has now caused a major shift in the risk landscape.”
Organizations have raised the bar on accountability. Digital and organizational success, and failure, begin with the board of directors. Still, it is challenging to lead organizations under the strain of constant change. Today’s directors cannot provide meaningful oversight for business models and value propositions that they don’t fully understand. They can no longer claim ignorance when issues arise. Directors need to understand the new standards around accountability, liability, and their duty of care. They must learn today’s realities to be well equipped to make decisions in the new normal. With the increase of swift innovative adaptations, the skills and capabilities of corporate boards need to expand.
New approaches to governance are discussed and the opportunity to reflect on your response around ethics, reputation, and crisis management is a value-added approach to the learning environment. My leadership skills and courage to engage confidently at any board table has been enhanced by The Directors College,” says Christine Williams, C.Dir., The Directors College alum and guest speaker.
The digital economy
Boards who can evolve, expand, and learn will better survive adaptation. To gain a deeper understanding, directors need to develop both the general knowledge and the confidence to ask the right questions, challenge the answers, and fully understand the digital economy. Boards need a firm grasp on what is next and the ability to apply diverse domain expertise to that vision quickly.
“In addition to a solid foundational understanding of governance, a truly effective board has to develop the behavioural competencies to navigate complex problems around issues like innovation and new technologies, ESG and ethics, and around dealing with the sometimes contentious and difficult agenda items that have arisen over the past year,” says Dr. Michael Hartmann, principal of The Directors College, DeGroote School of Business with McMaster University.
The pace of change will continue to accelerate. The boardroom remains a critical part of successful organizations. Tomorrow’s board director must bring current, modern, and diverse expertise to the table.
The Directors College
The Directors College has been offering governance education to senior executives and board directors since 2003. Courses include the signature five-module Chartered Director (C.Dir.) program, Innovation Governance for Directors and custom programming tailored to the unique needs of individual boards.