A board of directors has a long list of responsibilities – strategy formulation, accountability, monitoring, policy making, appointing a CEO – and there is certainly a correlation between strong organisational performance and effective corporate governance.
With a rapidly changing world of disruption and transformation, now more than ever, the pressure is on for boards to demonstrate their relevance and adapt to the opportunities and challenges ahead.
A growing trend is for boards to expand diversity of thought and improve their composition by appointing “next-generation” directors – a term characterised by typically young, first-time directors who are digital specialists. They are experts in fields such as cybersecurity, artificial intelligence and machine learning. They often have direct experience with digital transformation, social responsibility and customer experience strategies. What they possibly don’t have, is bucket loads of board experience (i.e., finance, risk), that are typical of most board directors.
And that’s what makes the dynamic so powerful – the combination of experiences and backgrounds that ignites debate and brings unique and diverging perspectives to the table. If the core responsibility of board directors is to ask the right questions, you can appreciate how next-gen directors can truly contribute and make a difference.
Not too dissimilar from workplaces that are seeing the value of diversity in teams, boards need to start recruiting directors who bring new and contemporary perspectives to debate and decision-making. So how do you find these next-gen directors?
It starts by understanding what motivates them to join a board – it’s likely to be things like personal and professional development, but more importantly, they have a strong desire and belief that they can make a difference.
Getting them onboard is just the beginning and the work really starts after they are appointed. This is where you need to rethink the approach to onboarding – it needs to be an immersive experience that goes beyond providing the usual reading material and documentation like previous minutes. A good induction includes conversations and presentations with executives, the CEO, key members of the team and external industry advisors who can provide context to the challenges faced by the business.
There may be ongoing coaching and mentoring required, to assist next-gen directors to get their footing and learn how they can add value to discussions. Remembering that these are likely people who are still learning to make the transition from executive to governance roles. Your board chair will have a significant impact on how successful next-gen directors will be – they offer guidance while also ensuring that other board directors adapt to the new dynamic.
Ultimately it is worth the effort – bringing on a new director who thinks differently and has different experiences and views is a valuable cultural shift/enhancement for a board. With the unprecedented change ahead of us and the skills that will be required on boards, consider the benefit of adding at least one next-gen director to your board.
If you are looking for direction and assistance on unearthing next-generation governance talent for your business, get in touch with us.
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