The National Association of Corporate Boards' latest report states that "boards, in close partnership with management, will require a greater speed of decision making, proactive behaviors, adaptability, and innovation.” I pose that your board or at least the Governance Committee should take a glance at this report to consider what changes might be made. The report emphasizes the role technology is playing in advancing the world and boards must be ready. But equally important, the report stresses that the board who is reactive versus proactive, strategic versus tactical, will never see its organization thrive if not survive. There are five specific shifts that include increased board accountability and an understanding of what is risk are outlined below by Yahoo Finance.
In the Face of Seismic Change, NACD Issues Blueprint for Board Leaders to Effectively Lead Their Boards Into the Future
The Board Leader Has New Imperative to Make Their Board Fit for the Future
WASHINGTON, Sept. 23, 2019 (GLOBE NEWSWIRE) -- The National Association of Corporate Directors (NACD), the authority on boardroom practices representing more than 20,000 board members, today released the report of the 2019 NACD Blue Ribbon Commission initiative, Fit for the Future: An Urgent Imperative for Board Leadership. The report sounds a call to action for board leaders (independent chairs or lead directors) to meet the demands of a fundamentally different operating reality by reshaping how the board thinks, operates, and interacts with the business.
The report addresses major, fast-moving, economic, technological, and social trends and their long-term implications for board oversight, and recommends specific actions board leaders can take to renew the board’s human capital, adapt board structures and operations, and deliver incisive oversight on critical issues. The report also offers practical tools, examples, and case studies that board leaders can use to initiate change.
“As businesses are confronted with a multitude of unforeseen changes—from exponential technological change to demographic shifts to increasing geopolitical instability to growing social activism—board leaders will need to set in motion difficult changes to make their boards fit for the future,” notes Cari Dominguez, Commission cochair, former director of Calvert SAGE Fund, and current director of ManpowerGroup, Triple-S Management Corp., The Calvert Funds, and NACD. “This initiative offers a blueprint for making board leaders more effective in transforming their boards over the next few years by sharing new data insights, specific recommendations, and practical examples and tools.”
A recent NACD survey showed that nearly 7 in 10 directors (69%) believe that exponential technological change will shift how boards govern their enterprises in the future. Eighty-one percent of directors expect much deeper board engagement on entirely new drivers of growth and risk. Seventy-six percent expect that board structures will need to become more dynamic. And 74 percent expect that directors will need to significantly increase their time commitment to fulfill their mandate.
“It is crystal clear that the seismic changes confronting business will require a new modus operandi for boards,” said Lester Lyles, Commission cochair, recently retired director of USAA, and current director of General Dynamics Corp., KBR Inc., Battelle Memorial Institute, and the NASA Advisory Council. “Their companies can no longer rely on historical growth strategies. And boards, in close partnership with management, will require a greater speed of decision making, proactive behaviors, adaptability, and innovation.”
The report of the 2019 NACD Blue Ribbon Commission initiative—led by a group of 30 experienced directors and leading governance professionals—outlines five governance shifts that board leaders should help orchestrate:
- Deeper, more proactive board engagement with management on entirely new and fast-changing drivers of strategy and risk
- A more strategic, forward-looking approach to board renewal through the lens of the shifting needs of the business
- A more dynamic and flexible board operating model and structure
- Increased internal and external transparency about the workings of the board
- More rigorous accountability for board and individual-director performance
“The board leader plays a pivotal role in catalyzing the changes that are required for boards to lead in these unprecedented times,” said NACD CEO Peter Gleason. “This Blue Ribbon Commission initiative provides board leaders with a framework to keep their boards fit for purpose and relevant.”
The report of the 2019 NACD Blue Ribbon Commission initiative, Fit for the Future: An Urgent Imperative for Board Leadership, and the report’s comprehensive toolkit (available exclusively to NACD members) can be accessed http://www.nacdonline.org/fitforthefutureboards.
The report’s Commissioners comprise distinguished board directors, executives, and governance experts. In aggregate, they serve on the boards of 32 publicly traded companies, 21 privately held companies, and on the boards of 24 nonprofit organizations. The Commission includes 10 current and former CEOs.