• Jesper Beck

#3 Is the board election cycle to blame for the lack of your digital growth ?

Updated: Aug 6, 2018


In summary

  • A good supervisory board ensures stability and maintains a sense of calm though times. On the basis hereof, a majority of boards comprise solely of executives with past operational experience who bring pattern recognition as key skill

  • However, navigating the future with its new business paradigms requires profound understanding of the digital economy and the drivers hat accompany it. The inclusion of digital nativescan bring these competences to the board and help navigate the company into tothefuture

  • If your board lacks competences within the new economy - consider powering subcommittees to drive the development until the election cycle opens for formal seats on the board

Adopt native digital to accelerate the growth


Are only CEOs with past operational experience suited ?

A year back I was discussing diversity at the supervisory board with a seasoned chairman. With a comforting stern expression he said,


“The supervisory board’s role is to steer the company through tough times. Only past operational experience can help you here. The truth to diversity is that only CEOs having served the hard years from age 45-55 have the experience required to stay calm in high waters.”


I concurred that a steady hand and pattern recognition are key characteristics, but when moving the focus of the discussion to the key challenges of today – facing an unknown/unpredictable future with new technologies as the driver – past experience will not do…

After a short pause of reflection, we continued the discussion.


Generational diversity

Our short discussion concluded with a nod and pensively smile. We commonly agreed on a three factor checklist for a good board composition.


Neither exhaustive, nor ground-breaking new, but the discussion and the conclusions opened a profound acceptance of the need for the “past operational experience” and “the new aged competences” to be present at the board.


Highlevel checklist for board diversity

Have you come to the same conclusion ?


Election cycle should not be a blocker

I have heard traditions and the corporate governance structure itself being blamed for the not yet having ensured the profound digital mindset (compression of both tech-savviness/usage and new business model understanding) on the supervisory board.


If the above simple checklist is to be followed, then many supervisory boards have gaps to bridge. With a current standard of 1-2 members on election per year, it will take time to achieve )not to mention getting the new mix to work) in practice.


Therefore, whilst we spread the word and call on the action to happen, we have to look for intermediate means that will ensure progress, until a true and profound digital mindset has been adopted across the board.


Empowered subcommittees

One such mean is an accelerated and empowered use of subcommittees.


To prevent that the work of the subcommittee becomes "yet another consultancy report without further action" an anonymous board member has shared below check list for future mandates:


CHECK LIST:

Involvement by the board:

  1. Must be chaired by the chairman

  2. A minimum of two members of the supervisory board should participate to benefit from new learning, project details and support for further actions when discussed at the board meetings

  3. The "new economy growth initiative" must break the traditions of supervisory boards not getting personally engaged in projects. Ambitious initiatives will demand minimum biweekly engagement in form of input, discussion and decisions from the chairman

Resources:

  1. Engage a dedicated Division-X team of experienced external professionals together with 2 fully dedicated senior resources from the company (the future CEOs of the new business that is being created) to orchestrate the process

  2. Prevent disturbance of the organisation, by keeping ownership with the supervisory board and limiting the CEO's involvement to interview, access to data and monthly status on progress (in countries with a two tier governance structure)

  3. The project must be funded by the supervisory board - NOT operations, i.e. either funded by Holding or Balance Sheet - not P&L


Expectations to outcome:

  1. The project charter should be ambitious - listing growth opportunities and stipulated execution plans for growth measured in multiples

  2. The growth plan should be used for the supervisory board to discuss the impact and opportunities that the new economy opens

  3. The work of the subcommittee should not only inspire, but help drive the change


So Mrs. / Mr. Chairman…

My call to you is to take a look at your supervisory board – do you have the mindset- and profound understanding of the new drivers that define the new economy ?


If not, how will you lead a change ?


So Mrs./Mr. Chairman please stand up, show your leadership by taking personal action and responsibility for bringing new aged capabilities to the supervisory board.


Hence, make time within the coming two weeks to review your board’s capabilities and mindset. I believe it will:

  • Create a new momentum on the supervisory board

  • Inspire you to take new exciting initiatives

  • Increase the value of your company significantly

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