What is the importance of digitalising the board room?
Year is 2019, new horizons have opened up in conjunction with this digital era. For a board room to stay ahead of the competition, it first needs to be able to keep up.
This quote alone, detracted from an article in the Harvard Business Review, made so much sense to me the first time I read it. It also couldn’t be more true when it comes to the topic of assessments in general – with a focus on Board of Directors.
In this post I will briefly touch on some of the drivers behind board assessments, while promising to make a habit of providing more content as the year goes on.
In order to be successful, a company needs to have competent individuals in place in the board and management team that posses the right skills and can work seamlessly together in alignment with the company’s strategic direction.
Entering 2019, the stakes couldn’t be any higher in today’s dynamic corporate governance landscape. As companies’ strategies, business environments, challenges and the general expectation of the performance of boards and directors evolve, expectations for the right mix of skills, experience and perspective constantly change too.
Directors want to safeguard themselves from risk, achieve more efficiency in the boardroom and ensure that they are developing strategies for talent management and more. Evaluating your board, CEO and management team will shed light on how to tackle these challenges and improve where skills are lacking.
Partly thanks to assessments, boards are increasingly looking to recruit more global and diverse directors with backgrounds from e.g. cyber-related areas, social media and technology.
Progressive boards see an assessment as a key tool to essentially optimise their boardroom efficiency. Assessments can not only expose performance issues and shortcomings, but they will provide a fact-based platform to address those issues from.
So why should you do a board assessment?
- Board Assessments will enhance the efficiency of board operations.
- It will further clarify the roles and responsibilities of your fellow board members and C-suite.
- To avoid unnecessary conflict due to lack of communication.
- To identify the appropriate mix of skills, experiences and perspectives. Find out exactly where your boardroom is making you proud and where you have room to improve.
- To create alignment between shareholders, Board and C-suite. The best companies prosper because all essential parties are on the same page.
- A combination of all of these will ultimately increase shareholder value. Investors and shareholders are requesting more information about the progress and efficiency of their boards. Having a well thought out assessment plan has become key when it comes to whether to invest or not these days.
In addition to all of the statements above, there are requirements and/or guidelines in many countries that call for a performance assessment of boards to ensure compliance in different markets (e.g. US, UK, Germany, Japan, Canada, Australia and Singapore). Although there are no requirements to compile externally facilitated annual board assessments in Scandinavia, the subsequent results show good corporate governance for the companies that do.
The bottom line is: if you have an active boardroom, it doesn’t hurt to have an evaluation plan in place. It can only help, getting everyone on the same page to ensure the main goal and target is being pursued.
Would you like to get your assessment game started or take it to another level?
Chief Commercial Officer at BoardClic