The BoD assumes the dual role of guidance and governance steering.
Due to the complexity, uncertainty, ambiguity, and volatility of the digital era, the corporate directorship as one of the most critical governance bodies in any forward-thinking organization must have the ability to guide, inspire and motivate people top-down and bottom-up toward accomplishing shared visions and strategy goals.
Abstract unification: Running a successful business is never simple, it has a multitude of complexity today due to the digital “VUCA” reality. Many board directors are top seasoned executives with decades of experience, they must be progressive and advanced enough to lead ahead rather than lag behind. Either making communication, negotiation or presentation, corporate board directors should enforce communication to tailor their audience via different styles to improve leadership effectiveness.
From abstraction to elaboration, from strategic to analogous communication, corporate BoDs need to step up communication quality between themselves and management, as well as between business management and its investors, etc. Information-based strategic communication at the board level can harmonize business relationships and improve governance effectiveness. Open your mind, listen carefully, read between the lines, and expect to find some fresh insight. At senior leadership level, as many times, abstraction enables an agreement; unify the difference and improve governance effectiveness.
Innovative skepticism: The corporate board directors play a critical role in challenging the strategy of business. Knowledge is important but more than that, is complete awareness of what is happening in the context, be skeptical of conventional wisdom. Innovative BoDs are the “outlier” who can see around the corner and discover some “hidden problems” which are not always obvious, and help the management close blind spots, strategy gaps, or common sense pitfalls.
The constructive skepticism in the boardroom often challenges conventional thinking as a sole path; brings unique insight, broadens the perspective, removes negative self-talk, and enforces proactive interactions, no matter what the situation is; eliminates stereotypical thinking and leverages empathetic listening to deepen understanding of business context, leading to innovative problem-solving.
Accountability enhancement: The corporate board is responsible for contributing to both protecting values and creating value for the organization. Don’t just see governance as constraints, but rather an opportunity. The corporate boards play crucial roles in taking an oversight of management assessment, gauging conditions and choices; taking an oversight of priority and resource management; as well as oversight of accountability -scoring activities and net results. Effective governance facilitates the successful functioning of an organization to ensure there are adequate controls in place to operate responsibly in accordance with multifaceted corporate values and enhance accountability across the organizational hierarchy.
It is important to emphasize that governance is fundamentally about having a systematic approach to improve decisions coherence and enforce accountability. To enhance effective governance disciplines, accountability and oversight are all part of the governance practices that corporate boards must address. Corporate BoDs should have sufficient knowledge to understand the digital business ecosystem, capture collective insight to present today and foresee the future.
Guidance of delegation: Leadership is about delegation. From top down, effective delegation improves strategic alignment, talent development, culture reinvention, and people-centric management maturity. Corporate board governance is the delegate process by which a board carries out the governance of the organization. Because unclear and ambiguous delegation inevitably leads to unsatisfactory results. Delegation without collaboration causes silo effects; delegation without clarity leads to underperformance outcomes.
The corporate board as an oversight and guidance role should present multi-intelligent wisdom, work closely with the management to envision and lead the organization towards its future confidently. Trust can make the delegation process frictionless. There is a logical scenario to enforce good delegation practice. There needs to be the real delegation of responsibility with well-defined boundaries and clear accountability. The insightful BoDs should take the key responsibility for ensuring that whoever is delegated has all the systems and controls, along with the necessary authority, required to produce high performance results.
Risk intelligence: Organizations encounter more risks than ever due to over-complex business dynamics. Lacking risk-awareness creates more blind spots uncovered and gaps unfilled; lack of the right dose of risk appetite perhaps makes management to be overly cautious, miss growth opportunities, and even causes business stagnation. Corporate board’s oversight of risk management helps to improve the level of organizational risk intelligence.
In reality, risks and opportunities co-exist in today’s business dynamic. There are all sorts of risks such as strategic risks, operation risks, innovation risks, reputation risks, etc, Some risks can be quantifiable; others can only be approximated, It’s always important to identify both business risks and opportunities, focusing on improving governance effectiveness. Organizational BoDs do not manage risks but oversee risk, set good guidelines to ensure that management has put in place an effective risk-management process, establish an effective risk framework, and manage risks in a more integrated fashion for the long run.
The corporate board of directors as top directorial roles is responsible to steer the organization in the right direction. Whereby the BoD assumes the dual role of guidance and governance steering, leaving the day-to-day leadership/management process in the hands of the C-level executives. The BoDs should understand what’s required and how a high-level basis of going digital means to the business; what’re the disruptive trends; how their organization catalyzes the progressive changes and how much better they can do to leverage creativity and lead business transformation seamlessly.