Boards can be slow to react, mired in debate, or simply lack curiosity regarding events, ideas, opportunities, and risks. Directors (and others within an organization’s senior leadership) can be quick to table items for further deliberation or delegate additional investigation to a committee. This behavior is one of the many symptoms of information disengagement, an issue which has become increasingly detrimental in the modern boardroom. The quantity of content available online is greater than ever before. Information moves at speeds that would have been unimaginable only two decades ago. Some leaders have abandoned hope in their ability to commit to proactive governance (effectively prioritizing “crisis management” over “prevention”). The waning of this hope often leads to bad habits—e.g. willful ignorance towards a potential risk and the hasty dismissal of research-intensive issues.
The mounting demand to cut through the noise and determine when (and how) to act has given rise to a new methodology in modern governance. Governance intelligence is a framework for collecting and interpreting market or competitive intel and distilling vital information and action items to inform directors’ decision-making.
Starving for insights, board members have increasingly leaned on the general counsel or corporate secretary to synthesize actionable intel (often from within a mountain of information). As such, knowing when to employ the governance intel methodology becomes an instrumental skill in championing proactive governance. There are four key calling cards of a boardroom in need of governance intel.
1. Slow Response Times
Whether through the press or social media chatter, the more coverage a topic receives, the less time it takes for the story to spread. The less time it takes a story to spread, the less time it takes to go from “rumor” to “scandal” to “crisis”. The window to act on risks and capitalize on opportunities closes fast. When it comes to crises, if directors struggle to get out in front of slow-moving softballs like squabbling in the C-suite, they don’t stand a chance of dodging bullets like a DDoS attack exposing customers’ login credentials. Using the governance intel methodology to guide the decisions of executives and board members can be an effective means of addressing a problem before its becomes public spectacle.
2. Overworked Advisers
While the exhaustion of an organization’s general counsel or corporate secretary is a surefire sign that they stand to benefit from governance intel, it says just as much about the board. Burning out the most valuable advisers in the boardroom suggests one of two things:
- They’re too busy devote adequate time on informing decision-makers, or
- Board members are demanding more than can a counsel or CoSec can deliver.
At some point, even the most dedicated adviser will reach a threshold past which they’re unable to spread 100% of their effort any thinner. Keep an eye out for this threshold and consider introducing the best practices of governance intel the second you notice its approach.
3. Flimsy Follow-Up
So long as you avoid the situation above, advisers should have ample time to prepare the intel needed to keep board members informed. However, the work they do ahead of board meetings is only half the battle. The other half involves some amount of follow-up after the meeting is adjourned. GCs and CoSecs are bound to come across topics that never made it into the meeting agenda. Things come up in conversation that diverge from anything an adviser could expect or anticipate. The more there is to research in the wake of a board meeting the more that is demanded of those supporting an organization’s decision-makers. Inefficiencies in gathering and interpreting valuable insights can lead to underwhelming follow-up (and follow-through should it sap directors’ enthusiasm, and hampering engagement in the boardroom). Governance intelligence offers two strategies for assisting advisers in this regard.
“Active collection” describes the construction of actionable insights in two distinct instances:
- Ahead of board meetings (typically focusing on specific agenda items), and
- After board meetings as advisers follow up on topics which emerge spontaneously in the course of boardroom deliberations.
Even if advisers aren’t overworked, it’s impossible to predict the time it will take to gather intel without knowing both the number and nature of the topics in question. Struggling to perform effective follow-up signals the need for governance intelligence, regardless of the cause. The methodology improves efficiency. The less time it takes to synthesize actionable insights, the more time advisers have to react to the topics that directors may throw at them.
4. Failing to Expect the Unexpected
Because it’s impossible to prepare for issues they’re unable to anticipate, an effective decision-maker must reasonably anticipate everything. At the very least, this demands that they maintain a general plan of action for any and every reasonable eventually.
“Passive Collection” refers to the ongoing monitoring and collection of information and actionable insights. The passive collection of governance intel is often performed without a specific target in mind and is facilitated by tools (typically some form of software or web scraper) designed to filter, sort, and search for information from a quality source. The best practices of governance intelligence outlines a means of configuring these tools to detect the information your organization can’t afford to miss (and nothing more). The primary goal of passive collection is to prevent important developments from slipping through the cracks. If board members regularly find (for example) regulatory changes or the industry’s hottest topics and developments catching them off guard, implementing elements of governance intelligence may prove to be an effective safety net.
Understanding the indicators of a boardroom in need of governance intel can help both directors and those who work to support their decision-making. Of course, while taking the plunge on proactive governance by implementing practices in governance intelligence demands more time and effort, it yields advantages more immediately than waiting to act out of necessity.