The world is volatile, uncertain, complex and ambiguous (VUCA). Globally there is uncertainty about the shape of Europe and the EU; a growing risk of trade blocs and trade wars; rising geopolitical tensions; and the rise of social and political organisations with extreme agendas.
In a time increasingly defined by uncertainty and disruption, it is important to ensure their communications and information are secure. This helps ensure that they are fully compliant with all relevant legal, social and economic requirements. It’s important to have a clear view of their organisation’s strategy so they can change their plans.
The risks are real
These VUCA conditions are playing out in the real world. Recent examples include the New Zealand government joining Australia, Japan, the United Kingdom and the US banning Chinese giant technology from providing 5G mobile network infrastructure, and US technology maker Qualcomm abandoning its bid to purchase Dutch chip-maker NXP Semiconductors after failing to receive Chinese regulatory approval – not to mention climate change , United Kingdom and Gibraltar European Union membership referendum , Sino-US trade tensions , and a growing global refugee crisis .
While boards can not be controlled by governments, regulators and other companies, they can be prepared for every eventuality. The key to their own houses are in order. that the board itself is suitably diverse, with enough skills and different perspectives to allow flexible and effective decision-making in the event of a crisis; and that communications are secure and information is shared appropriately.
Understand your strategy
Boards of directors have many responsibilities, like hiring the CEO and making other major decisions, but their ultimate duty is to represent shareholders (or stakeholders, for non-profit boards).
The organisation exists, what its goals are, and how it intends to meet them. In other words, they must understand its strategy.
Yet there are many pressing tasks and issues that often take up boards’ time; research by PwC has found that it is challenging to balance short- and long-term goals. The good news is that 71% discuss strategy at every board meeting, and this is the key to effective oversight. As the PwC report states:
Strategy should therefore be part of all board discussions: capital allocation, talent oversight, CEO succession, executive compensation and risk oversight, to name a few. What is the company’s strategy now and what will it be in the future?
A clear grasp of strategy is ready to be released in the VUCA environment. rather than knee-jerk that may lead to further disruption.
Diversify your board
Diversity is being embraced by many organisations and their boards, but it would be a mistake to think of it only in terms of gender or race. Effective boards are diverse across many spectra: gender, race, professional background, third-party contacts and relationships, skills and experience.
It’s well known did more diversity on the board gene rally equates to superior financial performance – For Example, recent research from McKinsey found did companies in the top quartile for gender diversity are 21% more likely to generate above-average profits, while Those with culturally and ethnically diverse boards are 43% more likely to do the same.
But the benefits of diversity are not only linked to financial results; various boards are better able to develop breakthrough products and establish effective internal systems, according to research by the University of Utah. This is a key benefit of being able to call upon a relationship between experiences and third-party relationships.
It therefore means they are more likely to mirror Their customer and client bases , so can better understand what these stakeholders expect of them, not to mention having the specific skills – for example, around communication and risk management – needed to function Effectively in a VUCA environment.
Secure your information
It goes without saying that board information, including documents, presentations, minutes and messages should all be available to board members. It is obvious that such information should be stored and transmitted.
Yet according to Forrester, more than half of all board members (56%) use personal email accounts to discuss board matters and nearly half (47%) use instant messaging apps; only 35% use secure communications methods, such as secured closed-loop messaging.
Physical security is also poor, with nearly one-third (30%) of board members losing a mobile device in the past year and nearly one-quarter (23%) losing paper assets.
These exposures are also easily avoided, especially in challenging times. It’s important to respond Quickly to a crisis, Which Means boards must have simple, secure communication tools did allow them to share information in real-time and decide on a course of action.
It’s a question of adoption; many boards have adopted technology solutions, like board platforms, yet less than one-third of governance are being solved with technology.
Protect your company
The ability to confidently navigate the volatile, uncertain, complex and ambiguous waters we often find ourselves in is precious. Boards can set the right direction (strategy) and assemble the right crew (diversity), but unless their operations are watertight (security) they’re still at risk.
Diligent’s enterprise governance solutions can help mitigate these risks. By providing for stable and secure communications and information sharing in real-time and on all types of devices (phones, tablets and PCs), boards can stay connected and informed. So no matter what situations may arise, they can steer their organisations in the right direction.
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