After two decades working with and on boards, I have come to the conclusion that boards are not fit for purpose in this age of complexity and disruption.
We have everything from increasing global competition to climate change and security threats. We have a tsunami of generational transition occurring. We have digital disruption to business models. We have technology advancing at a compounding rate. These add up to seismic changes not only to the way that we make money or deliver community services, but also to the way that we live.
Over the course of this three part blog series, I will:
• Consider “disruption” and its implications for boards;
• Present arguments for restructuring our current corporate governance model;
• Challenge the notion of “best practice” and how it impedes competitive advantage; and
• Advocate abandoning the traditional directorship mindset, in favour of a “directorpreneur” thinking
I make the case for achieving board-created competitor advantage through an enhanced mindset among directors, supported by a restructure of our corporate governance models, and an awareness of the challenges and opportunities that continued disruption will bring.
In the age of complexity and disruption what is needed is increased presence of mind. We need to be able to consider and to think deeply about the unthinkable. We need to be able to respond to the unimaginable. We need to be able to chart a course that provides stability on one hand and dynamic change on another. We need to be able at one moment to address hardwired compliance requirements and at another to think about how our business model might change forever in the blink of an eye.
The current operating model that we have been bequeathed is what I would call “directorship by numbers.” That is a set of frameworks, tools, processes and mindsets that admittedly, in large part have served us reasonably well. Indeed, directorship by numbers has been strengthened as a result of the global financial crisis as, more and more, the regulators, our stakeholders and even directors ourselves have “sought to protect what we have rather than look to what we could have”, as my colleague in the directorship space, Dale Simpson, has described it.
We have learned certain ways to set and manage the appetite for risk, to develop strategy, to meet compliance, and we’ve learned certain ways to manage ourselves while overseeing management. We are, in effect, merely painting by numbers.
What would it take for directors to become artists again, to actually be themselves, to bring a presence of mind, to imagine, to create, to be “governance creatives”, thinking and acting in the moment? These days the world is full of creatives: digital creatives in media and technology, traditional artistic creatives, and social creatives in the social media environment. What would it look like to be director creatives, working with management and with other partners to develop value without such a prescribed model, without a framework, without a safety net? Because the world may not serve us up situations, opportunities or crises that we have ever seen before.
That would, for me, require the mindful director, and from the mindful director comes the mindful board: the idea of being able to sit with one’s conflicting views, even at times one’s afflicted emotions, as the environment presents itself in a chaotic, challenging and sometimes threatening way.
What would it take for directors to be able to say that they spend more time reflecting on the business than reading about the business? What would it take for boards to spend time to consider how the organisations and their business models could be disrupted? What would it take for a board to spend time thinking without trying to move to action? What would it take for boards to let go of preconceived notions and ideas around any of the domains in which they operate but be able to return to what historically may have proved valuable?
This journey is something that many innate mindful directors have done throughout their entire career, and it would be easy for all of us to hope and lay claim to such capability. Yet the reality is that we see little of it in the boardroom. We see people distracted by technology, distracted by other board commitments or by competing life commitments, by compliance and consent.
We see management distracted by a heavy workload and imperatives heaped upon them by the board. We see chairs and CEOs distracted, just trying to get through the process. We see boards distracted by their attempts to manage competing priorities and stakeholders.
What would it take for the board to sit with chaos and let a solution arise? That, to me, would be the mindful board.
Next: Restructuring the Model