Following their inspiring message of peace and love, Dr. Reatha Clark King, chairman of the National Association of Directors, thanked the World Children’s Choir, for “reminding us who holds the future.” She remarked that the numbers at the NACD Board Leadership Conference continue to grow, “tracing diverse participation in every way.”
Dr. King focused her remarks on the idea of the future saying that we are “watching entirely new landscapes rushing to us at lightning speed.” She took William Gibson’s quote: “The future is already here, it is just not evenly distributed yet” and applied it to the audience by stating that “the future is here and having a direct affect on our companies and boardrooms every day.”
Dr. King observed: “New times call for updated challenges for board leadership” and recommended five areas of focus for the updated agenda:
World class excellence in board governance functions: Emphasize the basics. If we don’t take care of the basic functions we won’t have time to take care of the next compelling need.
Innovation: Enable value creation to benefit shareholders, investors, customers, communities, and other stakeholders.
Harness the transformational effects of new discoveries: Mitigate the risks and potentially harmful effects from these discoveries.
Understand and embrace a broad view of our companies’ contributions to society: We need to shift away from being “place-bound” thinkers to being “global” thinkers.
Communicate and keep the public’s trust: The challenge is to communicate clearly with stakeholders.
Warren Bennis has said: “Lleadership is the capacity to translate vision into reality,” and Dr. King pointed out that a major challenge for directors is, “to lead when the rate of change is accelerating rapidly.” She continued by noting that the concept of change is not new; to keep businesses fresh there must always be change. Now, however, simply keeping up with the pace of change is not enough, it is a matter of wholesale reinvention. She mentioned a number of companies and ideas embracing change such as Uber, Lyft, Zipcar, Airbnb, Coursera, Bitcoin, and Square that exemplify the idea—“revolution is relevance.”
Dr King concluded by observing that we cannot wait for the future; the future is here now. There are four things that directors must do in order to ensure their organization’s relevance:
On the heels of the NACD Directorship 2020™panel, Virginia Gambale, director, JetBlue and managing partner, Azimuth Partners LLC; Helene D. Gayle, president and CEO, CARE USA; director, The Coca-Cola Co. and Colgate-Palmolive Co.; Michael D. Rochelle, founder and president, MDR Strategies LLC, director, Military Officers Association of America, trustee, U.S. Army War College Foundation; and Clara Shih, CEO, Hearsay Social and director, Starbucks, discussed the perspectives, expertise, and skill sets that will be critical for boardrooms of the future.
Gambale noted that some of the issues that will confront boards in 2020 are obvious today. Globalization, technology and innovation, the drive for transparency coupled with short-termism, and a focus on shareholder returns will require a certain expertise at the board level. To meet these challenges, Gambale suggested one valuable mindset is contextual awareness—the ability to lead and make decisions in the context of what is going on in the environment around you with the information you have.
“Another way of thinking about contextual awareness is as the intersection of situational awareness and the ability to use intuition to take advantage of opportunities,” said Rochelle. “It’s a 360-degree awareness.”
“Part of situational awareness is to ensure that in a globalized world you have the ability to speak each other’s language and talk across the divide,” explained Gayle. “We can be brokers for merging creating wealth with creating social value.”
Reinventing the Future
While some technologies, such as social media and mobile, enhance existing business models, some companies are developing technologies that will completely alter the future. Shih pointed to the examples of 3-D printing and self-driving cars, noting that embracing embrace rapid innovation can redefine the customer experience.
Directors and management will need to prepare to keep pace with evolving technology. “The bylaws in corporate governance were meant to maintain stability. We need to be aware that in that environment we need to try harder to carve out time to brainstorm about how businesses can be transformed by these technologies.”
Onboarding Future Directors
“Ensuring a board is prepared to embrace emerging technologies starts with an effective onboarding process. Boards must do a better job of thinking about diversity as more than numbers,” Gayle explained. “How do we make sure what that person has to offer is brought to light? In onboarding, we need a focus on dialogue—having a discussion about what that member brings to the table.”
In addition, considering younger directors may also prove fruitful, she continued: “We have deliberately looked for younger candidates on my board—they understand some of these worlds better.”