The exceptional pandemic period, which is still ongoing with all its consequences, means that most boards need to adapt quickly to new ways of operating, both in terms of delivery and ways of interacting. This post aims to outline the prevailing 2021 shifts for boards in their interplay with owners and corporate management.
Some of the strongest trends we can see are:
- THE INCREASED IMPORTANCE OF BUSINESS INTELLIGENCE
It’s increasingly important to continuously learn about and understand events in the competitive environment in which you operate. One of the board of directors’ challenges is acquiring up-to-the-minute intelligence about market developments and using this insight to drive development issues in harmony with the corporate management. Because what happens if you’re late to the party? Customised and usable business intelligence enables you to take strategic decisions, thereby enhancing your business competitiveness.
- STRATEGY ISSUES IN FOCUS
Strategic issues are high on the agenda, as a direct consequence of the previous point. It goes without saying that businesses should continuously revise their strategies, but recent events have made it necessary for many boards to re-evaluate or even transform those strategies for the future.
- THE DIGITAL TRANSFORMATION
Given our increased reliance on technology to interact with customers and employees, it comes as no surprise that the increased pace of digital transformation is the most often cited trend for boards and corporate management. Many organisations rushed to change their IT infrastructure to enable and secure remote working and/or accelerate automation initiatives. Meanwhile, many businesses are also still grappling with the implications of their digitisation work and how this work should be carried out. The boards need to clarify their role in this context. What is the best way to focus on the digital business investments for flexible and fit-for-purpose operation and cybersecurity that your company needs to make?
The boards themselves must also continue to digitise their methods as a means of improving the flexibility and effectiveness of their own work.
- RISK MANAGEMENT
The management of various kinds of business risks is another high-priority area for investors, boards and corporate managements, as well as for legislators and the media. Risk management is no longer just a business and operational responsibility for management, but has become an issue falling within the board’s overarching responsibility.
Sustainability issues are so self-evident in parts of the world that they have already moved on or at least expanded the importance of sustainability into a holistic approach to leadership and business development. However, we should remember that large parts of the world have yet to come as far – hopefully they will fall in step as the value of professionalisation in this area becomes too obvious to ignore.
- ES&G (Environment, Social & Governance)
ESG remains a top priority, and boards are facing a growing demand from different stakeholders, investors and the media. Organisations must increasingly be aware of their contributory role in society. Boards should also expect increased scrutiny of ESG reporting and will need to be able to benchmark against the work of other businesses in this area.
- DE&I (Diversity, Equity & Inclusion)
Diversity, equity and inclusion (DEI) are increasingly central issues for many organisations and thus also for boards. Increased diversity for the boards themselves follows close behind. The trend in many quarters is that more time should be devoted to listening to different voices and increasing the diversity of management voices that are presented to the board. Discrimination needs to be combated with greater clarity. The board’s own composition will also increasingly be used as an indicator of an organisation’s commitment to diversity.
- TRANSFORMATION OF WORKPLACE MANAGEMENT
Many organisations will continue to work remotely or at least transition to a hybrid model of some description. It will be important to design a holistic way of working with Workplace Management that is optimal for the business in question. Different solutions are more or less suitable for different business flows, professional categories, employee preferences and different time periods. The key is to enable growth and drive change, while ensuring that management and employees have the conditions they need to thrive.
- LACK OF TIME AND TIME PRESSURE
Lack of time is a problem for many boards. Perhaps not in the sense of finding the time to hold their meetings, but rather insufficient time to devote to business intelligence, strategy and reflection. Time pressure complicates matters when a rapid response is make or break. By its very nature, lack of time may present a threat to the organisation and places high demands on an active board. The requirements in parts of the world that one person should not serve on as many boards as has previously been customary make this an even more critical issue.
- NEED FOR INTROSPECTION AND PROFESSIONALISATION
Depending on business orientation and where you are located in the world, boards are in need of different types of professionalisation work. Businesses need well-functioning boards that are in harmony with the world around them, owners and corporate management, and thus deliver successful strategy work. In many places, this means starting up or revitalising board work, while in already well-developed boards it means taking a long, hard look at what can be done to strengthen the work even further. Generally speaking, we’re seeing a greater need for executives and directors who have the right profiles to drive change. In addition, the board’s working method can almost always be made even more focused and effective.
The Board Services Practice at AIMS International specialises in collaborating with boards of directors to enable them to succeed in their assignments. In addition to Executive Search assignments, we assist with surveys, evaluations and coaching assignments in order for the boards of directors to address their areas for improvement.