How best to get Boards focussed on emerging issues?
The Grant Thornton Global Governance Report 2015 identified 3 key challenges for Boards and CEOs for the future which signal some of emerging issues that Boards' should be driving and focussing on.
What role should you as CEO take to support your Board in these discussions? I'd welcome your thoughts and ideas on how active or what role a CEO should take in tackling these issues.
I will be following up with a couple of practical 'how-to' articles that will support you in driving and leading these conversations at a board level – please feel free to sign up to the blog to get these articles delivered direct to your email.
CEO's and Boards clearly have a responsibility for setting the tone or culture of their organisation and this was supported by survey results. So why aren't we consistently committing to do this, and how often should we be doing this?
The report found many felt that not enough time was being spent exploring and leading on culture.
Maybe tackling the culture settings of your organisation is hampered because culture is too 'ethereal' and not a 'hard edged' business output. It could also be that we have a limited appreciate of, or ability to directly link culture to financial outcomes.
'Culture' it seems only really rates a mention at Board level when compliance issues raise their head.
So how can you assist the Board to focus on culture as a priority?
I'd love to hear your ideas. I will be posting a practical 'how-to' article in the coming days which will share my insights on this question.
Directly connected to the issue of culture is the issue of Board diversity.
The report identified that 2/3's of respondents believed they encouraged diversity. This wasn't supported however by the data, with only 1 in 6 Board directors globally being women.
Diversity is not just about gender mix however, it is much broader than this as the report outlines. The report's findings alerted the authors to the pervasive influence of the status quo and a resistance to change that exists at the highest levels in organisations. Without a commitment at Board level how can we invite and encourage diversity?
There was also resistance by Directors to the notion of quota's, contrast this with the supportive views of management teams to quotas. They it seems believe that this option was viable given the failure to move fast enough to achieve gender diversity.
The report identified the danger of 'group think' when Board's do not reflect the diversity of their community.
Interestingly, but perhaps not surprisingly, in the areas of future/current skills needed by Directors there was a mismatch between what Directors saw as essential as compared with the management team views. Board Directors are looking for new ideas and insights from their fellow Board members while management teams are looking for industry knowledge.
Do you see diversity as a key Board consideration?
Again I'd love to hear your ideas. I will be posting a practical 'how-to' article in the coming days which will share my insights on this question.
The issue of what horizons are being used to measure and report on business achievements was explored with results showing that a mix of a short-term (1 year) or mid-term (3 year) business cycle were the norm.
The concern raised in the report was that a short term focus hampered the outlook and vision of Boards.
The report highlighted a range of strategic horizons with the bulk sitting in the 2-3 year time span, relatively few looked beyond a 3 year time span for their strategic horizon.
It appears that a lot of Boards are focussed on short-term 1 year planning or business cycles which don't allow for focus on the longer term vision or goals. Getting the long term strategic plan set without being hindered by a shorter term focus on growth and earnings is the balancing act that Boards need to grapple with.
It is important then, with these words of caution, to balance short-term business cycles versus long-term strategic goals so that each supports each other.
Again I'd love to hear your ideas about the appropriate strategic horizon for your not for profit or aged care organisation, and why you've come to this view?