In our work with more than 600,000 directors and executives globally, we’ve collected some great governance stories that we’ve wanted to share with the world for quite some time. Now is finally the time…
Diligent has launched The Corporate Director Podcast, a biweekly program interviewing board members and corporate leaders to understand how board governance is evolving in this digital-tech-fueled world.
In Episode 1, we kicked off the podcast by interviewing two exceptional guests: Brian Stafford, President and CEO of Diligent Corporation and Betsy Atkins, serial entrepreneur, three-time CEO, and corporate governance & growth expert.
This episode is all about modern governance. We’re covering how the role of boards has changed over the past decade—and what changes we can expect to see on the road ahead. Let’s dig in.
Information is Coming In Faster — And You’re Expected to Respond Perfectly, Immediately
Perhaps the single biggest change boards have seen over the past ten years is the speed of information. With the impact of the digital age, there is so much more information coming in…and it’s coming in non-stop. This means that the response time required of boards is much faster as well.
Ten or twenty years ago, boards would meet four times a year, deliberate over a multi-day period of time, and hope to come to conclusions or recommendations. This form of deliberation over issues simply no longer works. In fact, board members are now expected to respond quickly and thoughtfully.
Today’s boards are challenged to raise the bar when it comes to gathering information about their companies and the issues they might face. Instead of waiting for an issue to arise, board must seek continual briefings and do “scenario planning.” This allows a board to be more nimble in its approach.
The expectation is that companies respond to issues very thoughtfully, but also very quickly.
— Brian Stafford, CEO, Diligent
Being a Board Member Has Become Riskier:
A role as a board director used to be something you were offered after a long and accomplished career. It was seen as a prestigious opportunity to give back and share your expertise. Now, there’s a different context—and a lot more risk involved. You could very well find yourself on the front page of the Wall Street Journal if you’re not a great steward of the company. The impact of this risk is threefold:
- First, directors will spend as much, if not more, time interviewing the company as the company will spend interviewing them.
- Second, you can’t take as many board seats as you might have in the past. As we talked about above, to be a great steward you’ve got to stay informed on the issues your company might face. So, holding multiple board seats is more difficult than it has been in the past.
- Third, the role of a board member requires more today. You might need to spend more time with management, walking through physical offices or facilities, going to retail locations, and meeting with employees to make sure you’re up to speed on all issues the company is facing.
Today, the role is still prestigious. But it carries a lot more potential risk than it used to.
You Have to Future-Proof the Company:
Your role is to future-proof the company, to help the leadership team look around the corner and manage the threats.” — Betsy Atkins
As a board member, your role used to be more backward-looking, focused on oversight. But now, with 50 percent of companies expected to disappear in 10 years, you’ve got to “future-proof” your company. You’ve got to help the leadership team look around the corner at approaching threats to ensure the shareholders are well-served and that the company stays relevant. Betsy Atkins had some great ideas on practical ways you can help to do this.
Encourage discussion on pressing topics like digital transformation or how technology enables the customer journey. Consider hosting a working dinner and inviting topic experts to make a presentation to your board. This ensures everyone walks away with a deeper knowledge of these topics and how they will affect the business.
Another strategy you can consider is arranging an annual technology tour. Each year Betsy would arrange for her board members to go somewhere like Silicon Valley or Tel Aviv to get an inside look at emerging technologies.
However you choose to do it, just make sure you’re future-proofing your company.
— Betsy Atkins, board member with several companies
Where We’re Headed
We’ve talked a lot about how the role of board members has changed over the past few years. But how will it continue to change over the next five to ten years? For one, we can expect the pace of change to continue. Given this trend, we can also expect to see companies implementing more tools to help their board members stay up to date on important issues.
How many boards actually reflect, in the makeup of that board, the makeup of their customer base?
— Brian Stafford, CEO, Diligent
Second, both Brian and Betsy anticipate that the opportunities around diversity will continue to grow. Boards will need to continue shifting their thinking around diversity to not just include diversity of gender, but many other types of diversity, as well.
Hopefully we will see increased diversity in age, location, expertise, and experience with technology. We also hope to see more board members who embrace change and are oriented toward innovation.
The responsibilities of board members are changing. But if you respond to these changes, you’ll continue making a positive impact in your company and beyond. And that’s what modern governance is all about.
This post is based on Episode 1 of The Corporate Director Podcast hosted by Dottie Schindlinger and Meghan Day, with guests Brian Stafford and Betsy Atkins. To hear this episode, and many more like it, you can subscribe to the podcast here: Apple Podcasts | Spotify | Stitcher | Google Play | SoundCloud.