Adding ‘foresight’ to ‘oversight’ responsibilities – Part 2

Welcome back.

Our next trend that needs to be on board agendas is thinking the unthinkable. Astute and visionary boards will consider what’s out there, even potentially out there, that could seriously destroy their hitherto successful business model. They will keep this question in their collective heads day in and day out, forever examining the landscape and quizzing the shifting sands.

And when new marvels like Uber and airbnb suddenly present themselves, as if out of nowhere, you’ll have considered the impacts of such entrants and devised plans and strategies to deal with their presence.

Which brings us to the right tone at the top – in other words, practicing what you preach or, in the more modern vernacular, walking the talk. The board members simply cannot preach one message through the organisation and then fall down miserably in their own worlds.

By way of example, imagine a board strongly committed to a work, health and safety policy with a zero tolerance approach to bullying, only for the board to have a number of serial bullies within its ranks and a chair who turns a blind eye to their contrary behaviour.

Mission is always a difficult one, but when organisations get it right and come up with a highly motivating and inclusive mission statement rather than some motherhood it’s invariably pure gold. And communicated repeatedly to all in the organisation ensures that all buy into it, pull together and work as a team in pursuit of a shared goal.

The trend of a growth in activist shareholders is hardly surprising given the advent of the triple bottom line, where social, environmental and financial measures are used to evaluate a company’s performance. But activist shareholders are not confined to those demanding ethical investments; they can also be found when the board makes poor investment decisions and loses money.

Regardless of the motivation behind the activist shareholder, the best – indeed, the only – way to manage them is by transparency and strong, meaningful engagement…and operating under a social as well as legal licence.

We’re almost back where we started, with the need for strategy to always be on the agenda. Interestingly, in our Governance Matters board evaluation exercises where boards rate themselves, the most common feedback is along the lines of “we get so caught up on things that don’t matter and really need to spend more time on strategy, on being visionary…”

And that gives us a fitting segue to the final trend: competing for talent.

Simply put, you’ll get the talent when you get the other things right. When your board is visionary, when strategy is on the agenda and when the kinds of trends we mentioned earlier are under the microscope, the talent will naturally flow.

Which leaves us with just one or two questions:

If the world’s top CEOs are saying these are the things that should be discussed at board level over the next 12 months, are they on your board’s agenda?

And if not, why not?

Until next time,
Kate.

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