A high-performance corporate board not only oversees corporate strategy but also influences processes & practices; enhances the healthy cycles of business reinvention.
The digital world is dynamic, nonlinear, uncertain, and volatile, emergence becomes apparent. What’s fundamentally changed is that top business leaders, especially at the corporate board level, no longer get to sit on the sidelines, they need to proactively lead changes, uncover hidden or loose coupled business logic.
Innovative boards review the “planning – adjusting – evolving” business cycle in leading change vigorously: The focus of the board is to oversee strategy management and monitor performance results. Due to the ever changing business environment, the linear strategy-execution scenario needs to be replaced by the iterative strategy-execution continuum. Corporate boards need to work closely with management, to figure out the “right level” of planning, keep iterating, adjusting, evolving, and working on a rhythm of sustained business solutions, creating the business synergy to strive vigorously in leading business transformation.
An effective governance system would have the corporate board involved in co-developing the companies’ strategic goals, and orchestrating business transformative across the enterprise. Corporate boards present insightful leadership by pushing the boundaries of a more sophisticated business mix, build a highly collaborative and motivated workforce, keep simplifying, optimizing, and energizing the business to gain competitive advantages.
Visionary boards reinvent the organization by “realigning-refining-refocusing – restructuring – redirecting – rebalancing” cycle: The digital organization has an hyper-connecting and interdependent nature; for any company to improve business agility, people-centricity and succeed in the long term; it is essential for the entire company to be pulling in the right direction by allocating resources, time, and assets scientifically.
Corporate boards gain contextual understanding of their organization, oversee resource realignment and capacity refinement cycle to ensure that resources are available before they are needed, refocus on the most crucial issues popped up on the business executives’ agenda, break down silo mentality, redirect workforce to build their unique competency; rebalance the long term concerns and short term benefit. The goal of business reinvention is to make the organization more fiscally responsible, increase technical capabilities, to ensure businesses are built to change.
High-performance boards enhance “performance-conformance cycle” to improve organizational coherence: Performance without conformance is risky; conformance without performance adds very little to the firm value. As conformance is inherent within value-driven performance, to some degree. So the corporate board’s oversight of the performance- conformance cycle to enhance governance discipline helps the management see the interconnection, incorporating conformance into the performance management cycle, focusing on maximization of capital allocation, company performance and shareholder value.
The dynamic business environment enables companies to leverage varying business elements to catalyze innovation and accelerate business performance via cross-functional collaboration. So the governance models need to be flexible. If governance is top down or even dictate, you’ll have a revolt on the ground and foster a culture whereby people look to bypass governance. It takes a holistic view to optimize organizational performance and conformance in order to achieve the set goals in a structural way.
Leading digital paradigm shift is not a passive activity, it is a proactive pursuit. To improve leadership effectiveness and governance maturity, a high-performance corporate board not only oversees corporate strategy but also influences business processes & practices; enhances the healthy cycles of business reinvention. An effective corporate board enables and directs management towards good outcomes, and ensures the business long term competitiveness.