Over the past decade, I’ve found that few factors have influenced the evolution of the board’s role more than new technology. From drones to 3-D printing to the latest cybersecurity tools, the transformative force of technological innovation is reshaping the competitive landscape and redefining best practices for corporate boards.
As I often discuss with our members, this shift presents both opportunity and risk, leaving many of us wondering how to best forecast—or “futurecast”—potential disruptors and achieve desired outcomes.
A great place to learn more about state-of-the-art technologies and how they’ll affect you is the 2015 Global Board Leaders’ Summit from September 26–29 in Washington, DC, where directors, innovators, and leading governance experts will gather under one roof to discuss this shifting corporate terrain and how to effectively navigate it.
For the first time ever, NACD’s largest annual gathering will feature “Innovation Nation”—a hands-on, interactive exhibit displaying the most buzz worthy cutting-edge technologies. Think drones, 3-D printing, Google Goggles, and more.
In addition to “Innovation Nation,” our summit agenda is packed with change-the-world-and-business-as-we-know-it sessions. Here’s just a sampling:
The big ideas and technologies of tomorrow are already changing the way we live and do business, but how we work together to transform those ideas and advances into high-value assets that will create a successful, sustainable future is what’s important.
And that’s our goal at this year’s annual summit. I hope you can join us.
The bar for director performance has been raised. A volatile economic environment, increased regulatory scrutiny, impending cybersecurity threats, and shareholder activism have all shifted the expectations for what should happen in the boardroom.
Responding to those growing expectations for directors, The National Association of Corporate Directors (NACD) has developed a new program—called Advanced Director Professionalism®—that focuses on understanding the market forces and “next practices” that will shape the boardroom in coming years.
At the inaugural Advanced Director Professionalism program in Philadelphia June 1-2, nearly 60 directors joined corporate leaders and subject-matter experts to discuss these market forces and next practices. Five key insights from the event follow:
Avoid the “tyranny of unanimity.” In a structured, interactive, scenario-based workshop, participants were confronted with a board of seasoned directors who were reluctant to dissent from the majority at critical decision-making moments. Such groupthink dynamics preempt consideration of viable alternative strategies and responses—a failure that can lead to disastrous business outcomes.
A healthy board culture is needed. Even effective boards are not immune to dysfunctional dynamics, such as hasty decision-making, disengaged directors, and too much deference to authority; yet the warning signs of dysfunction often go unrecognized. Continuous and rigorous evaluations can identify unhealthy dynamics early on, while periodic rotation of board leadership roles helps infuse fresh perspectives and approaches.
Focus on dynamic agenda-setting. Participants learned how to maximize the limited time that directors spend with each other and with management. While some full board and key committee agenda items are mandatory, these need not dominate meetings. Instead, board leaders should ensure that agenda development is clearly linked to major strategic opportunities and risks, and should plan reviews throughout the year in response to changing marketplace realities.
Cybersecurity is no longer an IT issue but an enterprise-wide strategic risk. The ramifications of cybersecurity breaches now include undermining customer trust, damaging operational effectiveness, and jeopardizing corporate strategy, to name just a few. Ownership of cybersecurity risk is distributed across the entire firm, from the CEO to frontline employees, who must all engage in secure behaviors with respect to system and data access. Boards should examine how effectively cyber risk is governed internally.
Become the keeper of corporate strategy. Board members often have a longer tenure than the CEO, which enables them to see long-term strategies through to completion. They can help ensure an effective strategy development process and engage management throughout strategy execution. Boards should challenge the fundamental assumptions on which the strategy rests—during periods of stability and steady profits, as well as times of disruption and emerging threats—and provide guidance to management as it considers alternative options.
National Association of Corporate Directors (NACD) President and CEO Ken Daly opened the second day of the annual NACD Board Leadership Conference with a status report of where the organization is now and where it is headed.
14,000: Number of NACD members.
75: Percentage of members who are public company directors (about 1,000 are full board members).
93: Percentage of member retention.
3,000: Participants in 2013 NACD education events.
10,000: Number of NACD webinar viewers.
1,000: Number of NACD Fellows.
22: Number of NACD chapters—5,500 people attended chapter events.
28: Pieces of intellectual capital NACD has produced this year.
4: Number of NACD advisory councils, which focused on board committees (audit, compensation, nom/gov, and risk).
NACD Directorship 2020™ is the main vehicle that NACD will use to drive conversation about the future of the boardroom. Directorship in 2020 and beyond will undoubtedly provide new opportunities and thus, will require innovative resources that directors must be prepared to embrace. NACD Directorship 2020 convened three meetings across the country this year that will inform the dialogue going forward, and more events are set for 2014.
Additionally, NACD is planning a meeting on capital markets which will convene institutional investors and directors to begin a dialogue about priorities for the future.