By Nancy Falls – Chief Executive Officer of The Concinnity Company
The world of business is a world disrupted. Digital advances are changing the way we communicate, the way we work, the way our organisations deliver products and services. Capital allocation is shifting toward technology, away from physical and human capital.
Companies are faced with complex and evolving choices around how to utilise new technologies while protecting themselves from cyber risk. The shifting sands of globalisation, market instability, geopolitical and cultural shifts, regulatory imperatives and new investor criteria, such as ESG (environmental, social and governance), make it apparent that not only is the playing field shifting, but so are the goalposts.
Boards cannot afford to do what they’ve always done and stay ahead of this level of disruption and innovation. The only way forward is to become an ‘agile board’.
Defining the agile board
The Oxford English Dictionary defines agile as ‘able to move quickly and easily’. But
what does ‘agile’ really mean to the board responding to the wake-up call of disruption? What characterises the agile board, enabling it to govern well in an age of disruption?
1. The agile board embraces disruption to drive winning strategies, risk management and improved performance. The agile board values forward motion, separating productive risk from reckless risk and over-cautious avoidance. Many boards get comfortable with letting someone else be the first mover. This often feels safer but can in fact be a choice that misses opportunities. Waiting for others to move first today often means being late to the party, getting left behind. The agile board fears being disrupted and embraces being the disrupter. Bringing advisors, if not directors, to the table who are expert at seeing around the bend can make divining the difference between recklessness and over-caution easier, more comfortable. At one of my companies, we had a futurist sit on our board. We literally gave the future a seat at the table and built a forward-thinking perspective into every conversation. This is the kind of thinking an agile board builds into its DNA. The agile board often chooses change as a way of being proactive, staying in front of change that is always coming.
2. The agile board values change over fear in its own work. We know that growth and improvement require organisations to change. We expect management to embrace this. Agile boards demand it from themselves. This means looking at things like board composition, board agendas, board processes and tools with an open mind. The director afraid of change and retooling will get in the way of progress eventually, no matter how profound the wisdom they impart. Carefully chosen leadership, responsibilities, activities and tools will make board work more efficient, effective and safer, even as it inevitably asks us to shift our habits and perspectives. The agile board has a healthy fear of not changing, rather than a fear of change itself.
‘To build agile boards, we must fundamentally shift how we think about what board work is, how that work gets done, and what it means to sit on a board’
3. The agile board prioritises collaboration and dialogue. The role of a board has long been to advise, support and challenge management with a focus on strategy, risk and performance. This will not change. Agile boards are always focussed on oversight, not getting in the weeds with management. But in a world of disruption, they prioritise collaboration, with management and with each other. This means communicating frequently – and differently. The ‘flipped classroom’ model in education, which advocates for using classroom time for problem solving and homework time for reading and watching presentations, is just as powerful in board work. We see strong results when CEOs ‘flip the script’ on the classic boardroom flow, using 80 per cent of the meeting time to listen and problem solve rather than 80 per cent of the time making a presentation. The agile board likewise leaves most if not all administrative activities to pre and post meeting, ideally handling those things via technology to make room for expertise and strategy to take centre stage when everyone is together
How to build an agile board
To build agile boards, we must fundamentally shift how we think about what board work is, how that work gets done, and what it means to sit on a board. We must be willing to ask questions. Do classic tools like the board book and the quarterly meeting cycle still serve us in a disrupted, always-on world? What does it mean to support the management team that is facing fresh disruption almost daily? How can we create boards that are up to the challenges of today’s business world? All this means thinking deeply about the people, processes and systems we choose to do our work. Here’s how:
Modify your mindset. Everyone’s area of expertise is affected by disruption, which makes everyone responsible for agility, for considering disruption. This is a new mindset, not a new department. This is a thing that everyone needs to include in how they think about their board work from now on.
Next step? Make ‘becoming agile’ a priority discussion for the next board meeting, possibly bringing in a dedicated facilitator, and create space to talk through everyone’s opinions and generate concrete next steps. Are you already thinking to yourself about how that feels a little sudden and disrupts your plans, even while you acknowledge it is necessary? That’s what disruption feels like, and what an agile response looks like. Don’t put it off. Shift your mindset now and take action.
Embrace education. Ongoing learning is critical. This means every board director, even those who are experienced, long-term directors, should be learning how to improve at their work. Disruption will not let anyone ride out their term!
Next step? Require everyone on the board to pursue board director education as part of what is required to be a director on your board. Be specific. Organisations, such as The American College of Corporate Directors, The National Association of Directors and Private Directors Association all offer good ongoing education, but it’s fine to get creative about what this means for your board. The point is not to get the certification for its own sake – the point is to cultivate the agile mindset of ongoing learning so that the board keeps growing.
Continually improve board composition. The data show that board diversity can have a positive social and financial impact for those who embrace it. But board diversity is also a way to incorporate more agile thinking into your board makeup. Fresh thinking moves everyone forward.
Next step? Make agile thinking part of your next board director search. Look for directors with experience in industries that have successfully navigated disruption as well as directors who embrace 21st Century governance practices and systems. Prioritise how new candidates approach problems and how important they think this new, agile direction is to the future of the board and the company.
Elevate your engagement. Elevated engagement is a core facet of the agile approach. This requires redefining the rules of good engagement. Spread the consumption of information, interactions and collaboration more evenly across the year. Cultivate ongoing conversations, ongoing research and reading. Find ways to nurture ongoing thinking about how to move the company forward.
Next step? Put redefining engagement expectations on the agenda. This can start with the CEO and chair or with a small committee. Consider how to prioritise ongoing engagement over sporadic interaction. Add a line item for ‘engagement’ to the board scorecard and define what that means in terms of collaboration between board members or communication with company management. Measure, learn, and adjust!
Come together with communication. Historically, boards are in touch in the
time leading up to a meeting, but not much in between. This is changing in many companies and needs to change in all of them. The agile board communicates before, during, after and in between board meetings.
Next step? Shift the expectations around communication for everyone on the board by creating and agreeing on some shared guidelines. To begin, this might mean discussing guidelines for information sharing between meetings and communication expectations. Ask what the management team can do to smooth information consumption for directors and look into making more real-time information and communications available. Also, begin discussing how your team might automate the routine to make room for the urgent.
Choose a committee for disruption. A few years ago I was at a conference for public company audit committee members. The subject of where to house ‘risk’ was on the table. While everyone agreed that boards needed more focus on risk management,
the debate was about whether or not risk needed a committee home, at least initially to elevate attention to it. Many boards had lumped risk into the audit committee, but audit committee agendas are already packed. The reality is that risk should have a seat not only at every discussion but on every committee. But creating a separate risk committee can help shepherd the issue into everyone’s consciousness and jumpstart bringing more focus on risk at the discussion, committee and full board level. Disruption is now often ‘housed’ in the audit committee. Should it be?
Next step? Have the board hold ‘disruption’ up and talk through how you want to make it more visible across the board. Should it have a committee home? If not, ask each committee to look at their protocols through the agile lens, create a plan for shifting how they work, and share it with the rest of the board. These can be sleek, single page documents that focus on a few targeted actions that will move the needle, not bulky PowerPoint decks that will gather dust in a folder somewhere.
Take advantage of technology. Utilising emerging board technology is essential for the Agile Board. While electronic board books have been considered sufficient, today technology solutions can and should provide far more support to the critical work of the board and the leadership team. Board technology should give directors access to all historical and current information. It should facilitate real time, fulsome and secure communication. It should automate recurring board tasks to free up time for the urgent and important. It should be able to measure progress toward outcomes as defined by the board. A software that is SOC II certified and is the dedicated place for board conversations means that things are documented, safe from outside threats, and help build the habit of elevated engagement.
Next step? Start looking for a real-time communication hub that is secure. We strongly suggest that you eliminate email and texting about board matters outside of your board tool. Does this sound extreme and anti-agile? It’s not. It’s a way to focus attention on what everyone needs to do and where they need to be doing it. It will make board work nimbler in the face of disruption.
Make time for measurement. Agile does not mean random. Agile is proactive, not reactive. Accountability requires measuring and elevating transparency of outcomes. This means utilising company and board dashboards to create transparency across the team and keep everyone focussed on a plan, benchmarks, and goalposts that everyone understands.
Next step? Find a good company dashboard that gives everyone real-time visibility, has a risk or disruption metric, and helps hold management accountable to shared objectives. In parallel, implement a board scorecard that helps hold the board accountable to its stated mission in a way that goes beyond the annual board self-assessment survey, digging deeper to tie board work with company performance and stakeholder concerns. None of this is about judging each other – it is about creating focus and holding ourselves accountable.
Implement integration. The agile board finds concinnity by pulling it all together. People, processes, information, communications, and outcomes measurement can, and should, all happen in one place. This builds the agile muscle and makes things easy to access and track. Remember, disruption doesn’t wait for meetings, so you won’t always have time to spend pulling resources from widely dispersed sources, tracking down different people.
Next step? Simplify, centralise and automate. Create rhythm and routine for what is repeatable, leaving more room for the agile thinking required for breakthrough strategy, exceptional risk management, and performance accountability. Technology is a huge asset to make this happen, and often an ally for the behaviour changes that need to occur.
These suggestions are the beginning of the path to becoming an agile board, shifting how we think about people, processes and systems from the ground up and the top down.
Becoming an agile board does not mean moving beyond the oversight role. Agile boards understand that good governance requires an abundance of deliberative, far-reaching, creative and critical thinking. But they do not confuse this with slow moving. It is perilous when an agile CEO hits a wall of directors who are caught flat footed or still focussed on yesterday’s issues, something I have seen far too often in my work with boards.
Becoming an agile board is a journey. Start or prioritise having fulsome board discussions about your journey now. The main points in this article are good starting points for the necessary dialogue you and your leadership must have. By taking time to re-examine the people, processes and systems of your board work, your path to becoming an agile board will become clear.
About the Author:
Nancy Falls is the Co-founder and CEO of The Concinnity Company, maker of Cloud Concinnity®, an innovative software platform, custom built for the board and the c-suite to transform mission critical management and governance processes. She is a thirty year veteran of the C-suite and boardroom, having served in both public and private companies, from early stage to Fortune 1000. She is a finance jock by education & experience, an NACD Governance Fellow, a certified ACCD Professional Director, and author of the acclaimed book, Corporate Concinnity in the Boardroom: 10 Imperatives to Drive High Performing Companies.