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  • Author: Graeme Nahkies
  • Published: Dec 20, 2021
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Each month we sign post for you some good reading on governance from around the web

The Dissenting Director

Sometimes, after healthy and robust debate, a director cannot reconcile herself to the direction the board as a whole has decided to take. When disagreement turns to dissent, directors need to carefully consider their position and the options available to them. The Institute of Directors (South Africa) has set out guidelines and considerations for directors if and when they are faced with this situation.

Beyond the decision an individual may be faced with, this report also addresses the circumstances where this situation might arise, regardless of the specific issue at hand, e.g., if the culture of the board and the capabilities of its members are not conducive to dealing with and reconciling divergent views. 

 

The Chair of the Future

The chair is a critical determinant of whether and how boards rise to the challenges of their many new and growing responsibilities. Boards are already addressing a much broader range of issues, including diversity, equity, and inclusion; workforce health and well-being; climate change, sustainability and the very nature of the corporation’s role in society.

The pressure to maintain momentum is high in these areas and also in emergent ones like the post-COVID return to work, employee safety, and meaningful action on social issues. These decisions fall ultimately on the board.

In this report from Deloitte the focus is on the need for ‘chairs of the future’ who can create ‘boards of the future’. Deloitte has identified nine areas that chairs are keeping front and centre as they seek to transform their boards. These represent not only the substantive matters boards oversee, but also their processes, and how the two intersect and may need to evolve.

 

Why you should strive to use more concrete language

Lloyd Mander explains in a recent blog how and why we should use more concrete (i.e., less abstract) language wherever possible. He highlights the way in which humans rely on short-cuts to reduce cognitive load and speed up decision making. These short-cuts often include commonly used abstract terminology or metaphorical allusions. While meaning something to the speaker or writer they may be interpreted quite inaccurately. Different groups also have their own ‘in-crowd’ language which may be quite puzzling or misleading to a newcomer.

Concrete language, by contrast, refers to tangible qualities or characteristics, things that we can all experience through our senses and, therefore, have a, mostly, common point of reference.

This issue is important because of the tendency at both board and executive levels to use – and use loosely – a wide range of abstract terminology. Take the word ‘strategic’ and its variants, for example. Even when used in a context-specific situation it is likely that board members and executives will jump to quite different conclusions about what is meant.

 

Boosting the tech savviness of the board

It is rare, these days, that a board skills matrix does not point to the need to improve the quotient of tech expertise on the board. In its absence, boards risk making mistakes and overlooking key issues when, for example, they develop tech strategy, evaluate vendors, and roll out new systems. An article authored by Greg Douglass of Accenture sets out a number of critical actions boards should undertake to raise their digital and technical literacy. Collectively these will enhance the board’s tech capability and help to put technology on the agenda. This is particularly important for organisations considering or undergoing digital transformation. For an increasing number of organisations this is not a matter of choice but rather necessity.

 

Succeeding in the face of disruption

When disruption strikes a business, the usual response is to try and improve existing products and/or create a sense of urgency of the proverbial ‘burning platform’ kind. However, authors Constantinos Markides and David Lancefield (Creating the right kind of urgency to bring about change) show with numerous interesting examples, that these actions are not enough.

Scaring people, for example, wears off too quickly. The initial situational analysis is important; it is hard to find faults in ‘your baby’, so a different perspective, e.g., taking a fresh look at the needs of your customers as if you were an entrepreneur is needed from the outset. A compelling purpose focusing on customer is also vital as it helps kick start active thinking.

 

The impact of stress on chief executive aging and mortality

Given their Good Employer responsibilities boards should be interested in a piece of research on ‘How Stress Affects CEO Aging and Mortality’ that has received a lot of attention recently. Using data on the dates of birth and death for more than 1,600 heads of large, publicly listed U.S. firms, researchers estimated the long-term effects of high levels of job demands on the mortality and aging of chief executives. The findings suggest that relative to known health risks there are also significant health costs attributable to managerial stress.