I recently co authored a publication, Wired to Govern with 2 senior colleagues. It was birthed as our attempt to craft a strategic framework that incorporates social media and new technologies. Exploring opportunities, threats presented, the potential of governance as well as some legal and good governance guidance, Wired to Govern outlines best practice guidelines, templates and checklists. You can also see an analysis of how the Code of Good Governance is interpreted against digital responsibilities.
According to recent McKinsey’s insight most directors don’t understand the company’s strategy and prioritise short –time gain at the expense of creating long-term value. Boards are not delivering their core mission which is providing oversight and strategic support for management’s efforts to create long-term value. The challenge is to strengthen the knowledge of boards and help directors build, maintain and refine a long-term mind-set.
Six Essential Steps to Take
1. Identify what a director’s ‘fiduciary duty really is. This entails placing the company’s interest ahead of one’s own – a duty of loyalty), prudence (applying proper care, skill and diligence to decisions) and help the company thrive for years into the future. The board should time more time discussing potential new goods, services, markets and business models as well as what it takes to capture value-creation opportunities with big upsides over the long term.
2. Select the right people – appoint directors who are independent thinking and whose experience has specific application for the organisation.
3. Spend quality time on strategy – this may involve more time on the role, devoting more time to understanding and shaping strategy. Board members may need to dedicate more time on a mixture of field trips, the quality and depth of strategic conversations and the strategic engagement with the organisation
4. Engage with stakeholders which involves understanding the stakeholders and their needs, facilitating dialogues and engagement with them. Stakeholders are not an optional extra and there should be channels for direct feedback and awareness of stakeholder views.
5. Ensure there is deft handling by board chairs or lead directors alongside CEOs. There may be a need to shift the culture, behaviour and structure of the board. Sometimes there is no pain without gain.
6. Consider the significance of digital technologies (especially social media) and the associated reputational and cyber security risks. Social media policies should be discussed at board level and this relevant area should not be managed from outside the boardroom.
Craft the steps with into clear and specific goals and deadlines. 2015 is already looking like it is full of promise!!
With social media connecting more people, networks and causes, there is a viable avenue to addressing the deficit in trustee placements. Delivering Effective Governance: Insights from the boards of larger charities (by Mike Hudson and Jacinta Ashworth) found that the most effective methods of recruiting candidates for board membership were reported to be board member, staff contacts and public advertisements. 68% used external methods and 10% used only external methods.
Admittedly, more than one approach is needed to counter the board recruitment challenge. LinkedIn, the professional networking site, offers a free new service called Board Connect to help charities recruit board members who have much-needed skills. LinkedIn prides itself in matching talents to the right people and engendering strategic partnerships online by professional online connections and sharing. . Continue reading
I love the line in Pirates of the Caribbean where one of the actors alluded to policies that needed to be adhered to by the Pirates. The other Pirate retorted, ‘they are not so much policies; they are more like guidelines’. With this in mind, I usually find it helpful to reflect on rules of the road that can build and sustain effective governance. Six of these listed have been of immense worth as I walk the journey with boards.
Rule1: Address Board/Staff relationships
Lack of clarity about what is governance and management can plague even the best of boards. Effective governance emerges by board members, the Chief Executive and the Senior Executive Board members agree the nature of the contact between trustees and senior staff. This level of clarity helps them to recognise appropriate boundaries and how they can work better together. More boards are introducing confidential sessions attended by board members only. These sessions are useful where the board members need to discuss their performance and matters that keep them awake at night with a view to working better as a strategic team. Continue reading
I have just attended the Institute of Chartered Secretaries (ICSA) Technologies Summit 2013. I did not know quite what to expect, but it turned out to be a good investment of time and money. The five sessions at the Summit covered the following areas:
Reshaping the board: looking at some of the technologies shaping the boardrooms of the future.
The dog that’s had its day? There has been a shift in emphasis with companies moving away from the traditional Annual General Meeting (AGM), experiencing falling stakeholder attendance and facing increased attention from the media and pressure groups. This discussion looked at if technology holds the key to renaissance. The Virtual AGM offers a space that can assist member engagement, but it needs to be properly designed in order to achieve what we want.
The global village: This interesting exploration looking at companies operating branches and subsidiaries spread across the world. Key to their success is to be run efficiently and in a compliant manner. Participants focused on the benefits that technology can bring to streamlining companies’ global operations. Entity Management Systems can support integration and enhance accessibility, consistency and coherence. Web filing and annual audit returns can efficiently be done online at lower cost. Board packs can now be accessed electronically (BoardPad for meeting organisers and participants is a great tool). And even better Companies House now has its own Mobile App.
Protecting your information: Even modest companies retain huge amounts of date and risks posed by data loss has very been higher. We looked at data security and the board and asked what can boards do in a crisis. A practical agenda would look at risks involved, guidance to address these risks and practical steps we all can take individually and collectively. Specific examples include how we dispose of portable devices, how we observe our behaviour and act carefully in public places, how we secure our websites and other security measures in relation to people issues and data predecessors. Regular back ups are a must as are encryption, putting in place firewalls, virus check and undertaking automatic updates. The Information Commissioner’s Office (ICO) has useful guidance on the use of emails. What are the authorities in places, have access issues been addressed? Are people prepared for their changing roles?
The Summit ended with a session on technology and the board. Board level responsibility is often handed to a dedicated Chief Information/digital officer. With technology pervading so many aspects of modern business, what exactly should that person take responsibility for and what board needs such a function?
I am glad I took time out to reflect on these matters.
The key messages for me are that the Board must have a good understanding of digital business and the role technology can play.
Successful Chief Information Officers are passionate about technology and what it can do for business. They need to spend time outside the IT function building relationships, influencing and collaborating in order to secure engagement.
The Board must be brought together by investing in tablet technology video/telephone conferencing, if affordable investing in telepresence (or halo technology) and last but not the least investing in ourselves as we get to know and be confident with technology. With confidence we can be innovative and creative thereby achieving those breakthrough advances we need in today’s uncertain environment.
Culture and behaviours matter. Any security and development is just as good as the people behind it. Surprise, surprise, some fatal flaws have been down to human error. So there a vital component in any IT strategy is the support we give to the people who will use it – training, appropriate policies and procedures and step to step engagement on how guidance can be implemented.
I did say it was worthwhile!