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Is your Board Future Proof?

In the concept of future proof board we argue reframing the fiduciary responsibility of the board. That is of a duty of care and value to stakeholders.

Every boardroom is undergoing challenges of transition and the question is how can the directors cope to direct effectively in the future. With business disruption, challenges od globalization, customer lifestyle and technological changes boards must raise up to the occasion and direct differently. Can non-executive directors really understand what is going on in an organization?

From experience duty of care and value to stakeholders has been a subject discussed thoroughly yet many boards still struggles to deliver value and many decisions can be questioned with regards to duty of care to stakeholders.

Closer home, corporates (in retail, banking, transport, manufacturing, health, education et cetera) considered stable have gone under and or are struggling, directors sued, many employee and other stakeholder livelihood lost. In all these scenarios, regulators were present and watched the show until perhaps it is too late. So what is the problem?

Many would answer Governance, Leadership, failed regulation and yes they are. But is it that the Boards were incompetent? If you look at the collective knowledge and competence of the Boards you will find that they have what it takes to govern the institutions effectively – in most cases. So what is the issue?

At PKL, we belief that the major issue is dysfunctionality of the Boards. The collective behavior of the Board deviates from what is expected in five major ways.

  1. Board Members ability to understand the organization – birth a vision, mission and strategy. The board lacks the ability to govern strategy implementation and operations
  2. Board Members individual capacity to know and discern what is going on. This may be in terms of competence and or time
  3. Board members shortcomings in deciding what is to be achieved with clarity. The spirit of what the organization should succeed in is usually lacking and so the passion for success becomes in most cases is flat. Most adopt an attitude of “do rock the boat…”
  4. Board members crisis of what they are – distinguishing self, greater good and the reason for being and maintaining an environment fit for results and actions
  5. Board members abilities to decide with courage and dare the future

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