Boardroom blitz: how new skills are shaping the boards of tomorrow
Gone are the days when sitting on a corporate board meant lavish dinners and the occasional meeting. The global banking crisis changed that forever, putting much more of a spotlight on corporate governance and the expectations of governing bodies. .
Over-coming 'group-think', digital disruption and transformation and issues of cyber security have also altered the traditional non-executive profile, demanding much greater knowledge of the risks and opportunities of the digital age
So how are boards changing to meet these challenges in a volatile and constantly evolving market?
According to new research from Harvey Nash /Alumni and the London Business School's Leadership Institute, in this era of flux, business leaders are caught between the old and new and struggling to keep up with the pace of change. But it appears they are becoming less naive about the disruptive power of digital and more aware of where the skills gaps lie.
The global report, Old Game, New Rules: How boards of today are preparing for tomorrow evaluates the views of over 826 non-executive directors. The findings show a growing recognition of a need to adapt to, and in some instances lead, innovation in the digital economy.
Particularly in the UK, the research suggests a heightened awareness of digital change among business leaders, with over a third (38%) of UK boards stating that they are facing digital disruption within their organisation.
While 43 per cent of boards don't think they have the skills to deal with the issue, the research implies that boards no longer consider digital and technology experience as a problem best left to the experts, with over 70 per cent listing this as the most important skill needed for in-coming non-executives.
Just as corporate governance is the collective responsibility of the board, so too is understanding how digital affects the business. This was a view taken by keynote speaker, Rachel Lomax at the report's launch event (14 November), whose board portfolio includes multi-nationals such as HSBC and Serco.
"There has been a major resetting of board expectations and what a good board looks likes. An effective board is not just a collective of specialists," said Rachel.
"Be aware of what's going on around you under your feet; get out of the boardroom and be conscious of the changing world environments."
The launch took place at the London Business School where over 100 board leaders and academics debated the results, particularly the role of the chair and what good leadership looks like.
Given that the whole point of drawing a diversity of perspectives is to effectively challenge 'group-think', a key skill for an effective chair is to be able to create an inclusive culture where all voices are heard.
Interestingly, in response to an open-ended question in the report of what makes a good chair, almost 500 non-executives and chairs rated soft skills, such as emotional intelligence, diplomacy and listening, as more essential qualities than the traditional traits of authority, industry experience and leadership. As a follow on question, it would be interesting to understand whether non-executives currently see these behaviours modelled in the boardroom.
During the Q&A, one audience member asked how much the panel felt boards focused on foresight, referencing how digital has only just moved to the top priority in the four years since the study began.
"Boards cannot afford to be naïve anymore." was a point made by Christine de Largy, Chair of the Harvey Nash Board Practice and one of the authors of the report.
"Even disruptors will be disrupted. Look what happened to Myspace with Facebook and now Snapchat."
The report suggestions the solution to unpredictability is:
"Robust strategic planning that aligns leadership and stakeholders around a common view of alternative futures, creating the will to adapt with agility."
What this would look like in practice, a governing board comprising engaged and diverse perspectives with strong leadership that is both provocative and inclusive of fresh views.
The questions all businesses should then be asking, what is the leadership style of your board? Are they listening?
The Harvey Nash / Alumni Board Report 2017/18, Old Game, New Rules: How boards of today are preparing for tomorrow, created in partnership with the London Business School's Leadership Institute represents the views of more than 826 non-executive directors from the UK, Nordic countries and the Asia-Pacific region.
Find out more by visiting: www.harveynash.com/boardresearch | #HNLBSBoardReport
Amanda Ciske, Associate Director, Harvey Nash