Board Chairs and Directors are committed to the oversight of their organisations in order to achieve effective performance and sustainability. While the challenges of achieving this are various and multiple there is one stand-out challenge which requires the organisation to be aware, agile, change focused and brave. Namely the challenge of Technology-Digital transformation.
AI and The Board, a Take-Over or Liberation?
The search for Board Effectiveness is often an elusive one. It is highly specific to the Company, the sector it is in, the business challenges it faces, the Board Chair and the history of the Board, to mention but a few of the contextual factors impacting on a Board’s performance.
Creating a Dynamic and Adept Board Leading a Resilient and Responsive Business
As Boards scan the strategic horizon there are plenty of threats and dilemmas to be faced. The likelihood of one crisis or another impacting on the business is high, with threats from: pandemics, wars, financial crisis, environmental crisis, political turmoil and technological disruption.
Boards need to continue to think long and hard about how they can ensure that their businesses are resilient and responsive.
How can a Board respond to these challenges? Critically before starting to dapple with the business, some self-reflection may be necessary, evaluating what shape the Board is in to face the future. A number of key areas for evaluation on ‘fit for purpose’ are.
Independent External Board Evaluations every three years became a key element of the 2010 Governance ‘Code’. Since then, there has been a growing development and focus on the Board as an independent entity. The ‘2010 Code’ stimulated an increased depth of Board effectiveness evaluation across the FTSE 350 and allied companies and organisations who now use the ‘Code’ as a benchmark of governance excellence.
We are seeing more and more discussion, debate and concern about the concept of ‘Overboarding’ in the Boardrooms of our Businesses, Enterprises and Organisations. This is essentially a question of capacity, does the individual sitting on the Board have the ability to effectively contribute to the oversight and strategy of the Business- Enterprise.
It is a good question and an emerging one as the Fund managers, Shareholder Advisors and Compliance Index compilers seek to provide data and information to enable informed ‘voting’ choices on the effective make-up of a Board. This data availability has been used to particular effect on the question of climate change readiness, where individual directors have been voted down due to their lack of climate change credentials. It focuses more attention on the make up of the Board.
This year’s KidsOut Trolley Dash was a phenomenal event. We want to congratulate everyone who took part. They collected over 5000 toys. This is a new record for the organisation.
It took a long time to collect the toys and move them upstairs. However, as you can see from the photos, everyone had so much fun. This charity and the group of volunteers are brilliant. Also thank you to all the vendors who donated the toys.
As a regular contributor on the January ‘Pipeline Top Flight’ flagship Leadership programme for senior female executives targeting at CEO, COO, CFO and other senior leadership roles. I come away with a refreshed sense of what can be accomplished and a determination to support the further achievement of women to the senior levels of our companies, organisations and Boards. It is my annual visible glimpse of the talent pool awaiting to be released on to our Boards.
On the programme we collectively ‘dived’ into the world of Boards, to better understand what Boards need and the role the individual can play. This enables the participants to understand what drive Boards and to target the senior leadership roles which support the Board with more precision.
The drain of talented women from the executive ranks is appalling and hits at the fundamental bedrock of our talent pool of candidates to participate on and run our Boards.
As a regular contributor to the ‘Pipeline Top Flight’ leadership programme, I see a stream of talented women who are fortunate to have been supported by their organisations to get impactful strategic learning and guidance on making it into the top Executive, CEO, COO and CFO roles of our businesses and organisations and to improve their retention in those roles.
Switched-on non-executive directors will ensure climate change remains on a board’s agenda.
The exciting world of the non-executive director (NED)! Just as you thought we were emerging from Covid, companies are thrown back into the choppy waves of ‘climate change, with a surge of motivated interest groups, governments and ‘woke’ investors. With plenty of isolation time to fill during the pandemic, COP26 and the plethora of climate change documentaries and shows became avid viewing.
Switched-on non-executive directors will ensure climate change remains on a board’s agenda.
The exciting world of the non-executive director (NED)! Just as you thought we were emerging from Covid, companies are thrown back into the choppy waves of ‘climate change, with a surge of motivated interest groups, governments and ‘woke’ investors. With plenty of isolation time to fill during the pandemic, COP26 and the plethora of climate change documentaries and shows became avid viewing.
The FRC (Financial Reporting Council) Review of Corporate Governance Reporting published in November 2021, continues to document the slow glacial creep towards better corporate governance reporting.
We have as Boards, a period of grace to ‘get our act together’ and improve the consistency and general standards of Board Reporting on governance matters in the Report and Accounts. Or it could it be taken out of our hands by the newly created Audit, Reporting and Governance Authority (ARGA).
The Report highlighted the lack of illumination of the Boards reporting on governance matters, with a patchwork of minimal, lawyer driven ‘what’s the least we have to say for this compliance point’. This contrasts against the FRC’s desire to see a coherent, integrated and strategic approach to governance development reporting.
As we reflect on the decade since the Davis Report on Women on Boards, there is the opportunity to celebrate and commiserate on what has been achieved.
As we see from the recently published Spencer Stuart Board Diversity Index 2021 and the Female FTSE Board Report by Cranfield University, there are many successes to proclaim on the gender progression and minority representation on Boards. However, there are two glaring and highly impactful ‘black holes’ in key crucial positions which mute this celebration. We have got nowhere near solving the inequality of women in the key CEO leadership positions and nowhere near a 40% women leadership of our Boards.
Leaders need to provoke and challenge the whole board to participate and engage as a group, to be ready for challenges ahead. But do they have the necessary skills?
The role of the chair has changed significantly over the past 10 years and now requires a set of skills that can balance the significant step change in a board’s responsibilities and reporting, embracing the challenges of widespread stakeholder lobbying across the environmental, social and governance (ESG) landscape.
I have been advocating for some time the necessity for accelerated action to appoint more woman as Chairman in the FTSE 350 as a driver of change at the Board level (Article: Women Covid Leadership – The Head, The Heart and The Egos, The Gender Bonus Beyond further articles on our website). My view is that greater gender diversity in the Chairman role would have a leverage effect and directly hasten and advance Executive pipeline diversity at senior leadership levels, with the percentage of women in executive roles flatlining in both the FTSE 100 and 250 in 2021. Also it would actively facilitate tackling pay gap differentials at the Board and executive levels and provide a more effective response to the growing board challenges on ESG issues, especially climate change. While advances have been made on the gender balance on Boards, the Chairman stands out as an unacknowledged ‘blind spot’ in advancing our Boards into a modern era.
We are pleased to announce that Helen Pitcher OBE has been elected as Chair of PCF Management Committee, for a two-year term until October 2023.
We wish her all the best in her new role.
Helen Pitcher will be chairing CRF's annual conference on Building and Sustaining Great Organisations on the 12th October 2021. The conference will be both in-person and online. You can register for the event here.
