EVENT: Future proofing the board was the topic of a dynamic debate hosted by IE Business School in London last Tuesday night. IE Dean Santiago Iñiguez de Onzoño used the opening line of Dickens’ A Tale of Two Cities to aptly set the scene “It was the best of times, it was the worst of times”.
Chaired by Professor Lucy Marcus, IE brought together a panel of opinion leaders to discuss the evolving role of the board and how boardroom agendas must adapt to our changing times.
Professor Marcus opened the discussion with reference to her belief that the role of modern corporate boards is the juxtaposition of traditional roles and strategic ‘stargazing’. Traditionally boards focus on finance, corporate governance, compliance, corporate risk, etc. Stargazing is where a board focuses on the organization’s strategy - is it robust, resilient and, as the panel put it, capable of responding to Donald Rumsfeld’s “known and unknown unknowns”?
Panellist Manny Amadi, a former WEF Global Leader for Tomorrow, stressed sustainability as a core boardroom responsibility. Boards of sustainable organizations need to consider both securing resources for their future development and their wider societal impact. They also need to understand and anticipate change. He suggested these labels for a clear set of boardroom levers to monitor sustainability: Risk (including reputation risk), Opportunity, and Values.
Rory Cellan-Jones, the BBC Technology Correspondent, described a disquieting visit to a large UK corporation where he found a distance between the board and the concerns expressed through the rest of the company. This disconnect was exemplified by board’s obsession with analysts. He felt this board was more interested in its short-term presentation to City analysts and its investor relations, than in long-term strategy or stargazing. He felt future boards need to fix their attention far more on the rapidly changing business environment brought about by technology and the burgeoning social media.
Trevor Philips OBE, chair of the Equal and Human Right’s Commission, moved the discussion on to the composition of the board and the question of diversity. His definition of diversity in a boardroom context was very interesting. Quotas or ethnic/gender balancing acts were not the critical thing. What was needed to future proof the board was to ensure a wide range of strong voices that reflect our changing society. The number and structure of the board might vary according the place the organization was in its life-cycle but vitally the board must be open to a diverse set of views.
Sir Robert Worcester, founder of MORI, emphasized strategy and establishing a corporate culture as key roles of the board, at a time when stakeholders now also see ‘ethics’ as a boardroom issue. He also raised a question about paying non-executive board members. In the past board members were paid a small honorarium, today fees of £70,000+ are the norm. In the past non-execs had little to lose whereas today they have a significant incentive not to rock the boat. He said it was the chairman’s role to act as a facilitator but it was also the chairman’s duty to ask the ‘last question’- the difficult question others had avoided.
Sue O’Brien, CEO Norman Broadbent, took up the diversity theme. As an executive search professional, she had observed a lack in functional diversity. She believes that an effective board should comprise a broad range of expertise, experts that mirror the company and reflect the company’s wider impact. Too often she had seen boardrooms dominated by accountants at the expense of other functions, HR for example was often not represented at top board level. She also noted that aspirant board members often asked her to find posts at FTSE 100 companies, whereas she knew they would do far better to build their experience first by serving on the boards of mid-cap and AIM companies.
Held in the Grand Hall of the British Medical Association, the large audience had just too many questions to fill the allocated time. Clearly this was a popular subject and one ripe for further debate.
A quote from the other city: “Reason must first be established in the minds of the leaders; then gradually it descends and at length rules the people, who perceiving the moderation of their rulers, learn to imitate them.” Voltaire.
Lucy P. Marcus, was recently recognized with the ‘Thinkers 50’ Future Thinkers Award . She is Professor of Leadership and Governance at IE Business School and CEO of Marcus Venture Consulting. She can be found on Twitter @lucymarcus
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