The corporate board’s succession plan needs to be well aligned with the board composition, the business’s strategy evolution and transformation.
Due to the “VUCA” characteristics -complexity, uncertainty, ambiguity, and velocity of the digital era, the directorship in any organization becomes more critical and challenging. Contemporary corporate boards have many responsibilities, and also get a lot of distractions.
As one of the most critical leadership pillars, visionary BoDs steer the organization in the right direction: Due to continuous disruptions and ever-changing business dynamics, companies today have huge pressures to survive in today’s hypercompetitive economic dynamic. Corporate board oversees business strategies. Vision is an integral part of the directorial role because organizations have to step into the uncharted waters and blurred business territories. To provide invaluable feedback when overseeing the strategy, BoDs must become information-savvy, be forethoughtful to emergent trends and keep balanced views, not via stillness.
Strategy management is not linear steps, but an iterative continuum. The greater that conditions of uncertainty prevail, the more likely it is that the strategy will be a product of emergent thinking rather than the original formulation. BoDs as top strategic decision makers require unique viewpoints to improve decision effectiveness. Besides strategic planning, corporate boards oversee other broad areas such as governance, investing, performance, and talent development, etc. They should be self-aware of their role in problems and show professional maturity to understand their intention, capability, and capacity for the strategic problems they intend to co-solve.
Influential BoDs apply critical reasoning and independent thinking to make sound judgment, provide insightful advice via objective communication: Under today’s “VUCA” business dynamic, the Corporate Board’s role, in large part, is to make good decisions that enhance the value creation for the organization. They need to work closely with the management for identifying both business opportunities and risks in the business eco-environment, spend more time concentrating on getting to the root of the problem, solving it, and understanding the outcomes based on the facts alone.
Corporate board directors are great independent thinkers to make sound judgment. They are not just the followers to chase the tidal waves blindly, but are able to capture the invaluable business insight to make sound judgments and effective decisions in a consistent way. To be objective, corporate board directors need to apply critical thinking, step out of what they are trying to understand, remove the “old box” shaped via the conventional wisdom or group thinking, learn to be impartial, practice fact based communication, and keep steering their organization in the right direction.
Innovative BoDs need to oversee innovation management and management innovation: Innovation is a unique business competency that differentiate leaders from laggards across the industrial boundaries. Being innovative is the state of mind to think and do things from a new angle, solving either old or emergent business problems alternatively. The commitment from the top is very important for any change or innovation to be successful. Innovative BoDs oversee innovation management and management innovation, co-develop the innovation agenda for their company to build competitive advantage.
In practice, the corporate board’s innovation management oversight helps to de-risk the introduction of innovation into the marketplace, establish clear proofs-of-concept before making the investment to launch and scale. Corporate boards also set the tone for advocating culture of creativity, creating the space for dialogues and debates about digital innovation, practicing open-minded leadership, encouraging innovation and advocating changes. They can tie innovations and the innovative culture to the organization’s strategy and ensure that innovations will be supported by management and by all stakeholders.
Corporate board leadership maturity directly impacts the overall business competency and maturity. The corporate board’s succession plan needs to be well aligned with the board composition, the business’s strategy evolution and transformation. The increasing speed of change and global dynamic brought much-needed oversight and additional rigor to the leadership succession planning process at many companies. Corporate boards deepen their understanding of the organization, share a holistic perspective of business growth, harness innovation and enhance a healthy cycle of performance-conformance to improve organizational maturity.