Better Boards, Not Bigger

The long shadow of COVID-19 has forced organisations to face disruption and uncertainty, with many having to change their strategies almost overnight. Now, the focus is shifting to setting in place long-term changes for a chance at future stability. These shifts may come in all forms, from restructuring to a renewed vision, going digital instead of extending leases; but my focus, as always, is on the board.

The Financial Times recently released a report entitled “The Great Board Reboot” which contained findings from a global survey of 626 respondents who are currently sitting on at least one company board. This report revealed how directors are embracing evolution in their roles and responsibilities. “In the wake of corporate scandals, a global pandemic and an uncertain economic and social recovery, all eyes are firmly on the board. Beyond regulation and compliance, board members must be able to detect risk and opportunity like never before. Amid greater accountability and governance reforms, boards have to be more flexible, more agile and more responsive.”

In the wake of corporate scandals, a global pandemic and an uncertain economic and social recovery, all eyes are firmly on the board. Beyond regulation and compliance, board members must be able to detect risk and opportunity like never before. Amid greater accountability and governance reforms, boards have to be more flexible, more agile and more responsive.

“The Great Board Reboot” survey identified five key expected changes to board governance over the next two years. One of the trends piqued my interest: “smaller boards will become the norm.” There were similar findings from the research in the Advisory Board Centre’s 2021 State of the Market Global Report. We are witnessing a growing movement of advisory boards supporting smaller governance boards with critical thinking and problem solving to support directors in their decision-making process.

When we research advisory board trends, I am always aware of my personal bias in evaluating the market. The findings from the Financial Times survey provide an interesting lens on the same trend of building better boards – not necessarily larger boards. The indications are governance boards and advisory boards will continue to work side-by-side in a broader ecosystem of good governance.

If this is the case, best practice and ethics in managing boundaries has never been more important, including managing conflicts of interest, ethics, and personal bias through independent and critical thinking. To address this successfully, Chairs must have clarity on their role in order to bridge the gap between influence and impact.

 

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