Happy New Year!
As we welcome in the new year, my inbox is filled with publications telling directors what they need to pay attention to in 2022. There is no end of new and emerging areas where directors are expected to play an expanded role in oversight, advice, and decisions, e.g., ESG, data privacy, the future of work, DEI, strategy pivot, digitization, and path to net zero – to name but a few.
While all these topics are important, as an advisor to boards across sectors and a director myself, I think there are three fundamental areas where directors can have real impact in the coming year.
- Define your Purpose: Defining your organization’s purpose and how its business supports a stronger global society has never been more important than at this point in history. Without establishing the fundamental raison d’être of the organization with this context in mind, the work associated with governance will not have the impact that directors intend, and investors, employees and other stakeholders expect. To draw on the work of the Enacting Purpose Initiative housed at Oxford University, business purpose is a clear statement of how the organization will “solve the problems of people and planet profitably and not profit from causing problems.”
- Modernize Board Composition: New business models, globalization and stakeholder interests require a broader array of skills and experience at the board table. The old paradigm no longer works. To provide leadership and have impact, board composition must modernize to reflect the skills, experience and perspectives needed in today’s business environment. Today’s pace of change requires the addition of younger directors who are in tune with evolving business models, and increased participation from under-represented groups of talent to broaden perspectives around the table. An intentional approach to board culture and dynamics is necessary to build a strong and high-functioning team.
- Focus on People: HR strategy, people and culture are the board’s business. While we used to say that hiring the CEO was the board’s #1 job, now the board must ensure there is a robust talent strategy, a competent, healthy, and constructive leadership team, and a thriving workplace culture to support the organization’s strategy. Ensuring diversity, equity and inclusion thrive throughout the organization requires more than policies and targets. Many boards need to spend more time discussing top talent, gaining a true picture of the tone at the top set by the leadership team, and understanding the true state of affairs at all levels of the organization. A strategic and courageous HR leader is an invaluable asset to the board.
As we move into the new year, I look forward to continuing the discussion with you on these and other important topics related to governance and leadership.
Wishing you, your families and your boards, a happy, healthy, and successful new year.
