10 Questions Dominating Boardroom Agendas for 2016
NEW YORK, Dec. 17, 2015 /PRNewswire/ -- "Boardrooms are facing great unpredictability and a breakdown of business models in their industries, which changes the role of directors today," says Susan Stautberg, CEO of the WomenCorporateDirectors Foundation, the largest group of women corporate board members globally. "We need directors who are synthesizers of information – who can see the smoke over the horizon and bring this insight into their companies."
What are the top questions directors are asking in their boardrooms so that they can be better prepared for what's to come? WCD held its Americas Institute this fall, where directors came from across the globe to The Coca-Cola Company's headquarters in Atlanta to discuss top board concerns and how directors are preparing themselves for the challenges of 2016 and beyond:
10 Questions Dominating Boardroom Agendas for 2016
- Is the board truly thinking globally? "Many of our companies
have global footprints and distribute global products, and yet, I dare
say, are not what I would call a global company with a global DNA," said
Elaine La Roche, Director of
Marsh & McLennan Companies, Inc., China Construction Bank, and
Harsco Corporation; and Senior Advisor, China International Capital
Corporation. "The population of the world is going from 7.3 billion
today to add almost another billion by 2025. Yes, the demographic growth
is going to be coming from China, but also from India, from Indonesia, and from Africa. How many of you have had a conversation about those countries in your boardroom recently?"
- How can companies leverage "glocalization"? "You can't reach many local markets around the world if you don't produce innovation locally," said Adriana Machado, formerly
the Latin America Government Affairs and Policy Vice President at
General Electric. "Companies can then employ 'reverse innovation' and
find opportunities to create a product in a less developed country, and
then take it globally afterward." Companies such as GE are some of the
leaders making the models of glocalization and reverse innovation
co-exist, bringing products tailored to emerging markets – such as
portable medical devices – and selling them in wealthy countries.
- Who's accountable for the company's cybersecurity? "Organizations are still lacking in cybersecurity preparation," said Olga Botero,
Founder and Managing Director of C&S Customers and Strategy, Senior
Advisor at Boston Consulting Group, and Director of Evertec, Inc. "True
cybersecurity is based on accountability for each person in an
organization. It doesn't matter whether it's someone in sales or the
production area or whether it's someone in management – security is
everyone's responsibility, and if you don't have a very strong culture
within companies, we have open windows." Boards are responsible for
creating the conditions upon which a culture of preparedness and
accountability can be built.
- Where is the data risk in the organization? "I think the biggest thing to remember is that data risk isn't just about IT or those involved in the security area," said Kathy Misunas,
Director, Tech Data Corporation. "This is about every employee thinking
about security – it's not just about those handling customer data,
Social Security numbers, and credit card numbers. Consider employees in
areas such as M&A and investor relations since there may be
sensitive data and risk imbedded in these parts of the organization. I
believe that many companies are looking at security through a narrower
lens than is required."
- What is included in the company's innovation "ecosystem"?
"The board should be looking at a company and asking itself: are
initiatives praised, are they celebrated? Are failures embraced?" said Giannella Alvarez,
Chief Executive Officer, Harmless Harvest, and Director, Domtar
Corporation. "Is the innovation ecosystem comprised of internal and
external stakeholders? Do we involve our employees in innovation? Do we
involve our suppliers? Do we involve academia? Do we involve start-ups?"
Innovation is an open system, more and more so, and boards can help
open these doors.
- What new business model should the company be thinking about? "Innovating isn't always about new technology; it's often about business model innovation," said Teresa Amabile,
Professor & Director of Research, Harvard Business School, and
Director, Seaman Corporation. "Think about Uber: Uber didn't invent
cars. Uber didn't invent the idea of a stranger giving a ride to someone
else – that's been around as long as there've been liveries and taxis.
But Uber invented a new business model for doing that. FedEx didn't
invent package delivery, but it invented this crazy new business model
for doing that." Boards need to be aware that the culture is what will
make the company open to new business models. "Peter Drucker
is said to have quipped, 'culture eats strategy for breakfast,'" said
Amabile. "You can have the best strategy around, but if you don't have
the appropriate culture within your company to execute it, it will
fail."
- How does a board balance innovation and risk? "Boards must look short-, medium-, and long-term: what is our role in thinking about innovation?" said Anne Darche,
Owner of Pertinence and Director, Groupe St-Hubert, Groupe Germain
Hôtels, and MU. "Boards have to look at a balanced innovation portfolio
from a risk perspective. You do need incremental innovations, where
you're basically tweaking products that exist already – maybe it's a
second generation or third generation of products. These are lower risk,
lower return, but you need those. Then you also need the more
disruptive innovations: those with longer return and higher risks, but
will be the ones to bring you to the future. These are the innovations
that guarantee that you will be here 15 years, 20 years from now."
- Where should the board spend its time? "One of the problems is that we're spending too much of our time on the past and not enough on the future," said Donna McManmon,
Regional Sales Director at Diligent Corporation, which creates
collaborative software for boardrooms. "We spend a whole lot of time on
quarterly reports, audit reviews, and budget compliance, and not enough
on strategy, risks, trends, disruption, R&D, and innovations. As
it's said, a good board brings oversight and insight, but a great board
also brings foresight."
- How will we manage shareholders? Shareholders are forcing
boards to up their communications game, both ways. "Sound pay practices
were one of the issues that started this stronger voice from
shareholders, but it was really just a Trojan horse," said Maria Elena (Mel) Lagomasino,
Chief Executive Officer & Managing Partner, WE Family Offices and
Director of The Walt Disney Company, The Coca-Cola Company, and Avon
Products, Inc. "There is now a whole process where shareholders want
more and more communication about everything, and boards are becoming
much better listeners. Boards will need antennae to be able to really
listen to what's going on with shareholders."
- How can a board bring the right voices to the table? "People who all think alike might not ask questions of each other and may not probe," said Helene D. Gayle, MD, MPH, Chief Executive Officer, McKinsey Social Initiative; Director, The Coca-Cola Company and Colgate-Palmolive Company. "I think the fact that we're all taking our responsibility more seriously, and that we're scrutinized more, opens up the opportunity to also have a greater number of different voices at the table. Not only women's voices, but diversity across all backgrounds and demographic factors."
Nancy Calderon – KPMG Global Lead Partner and Director of WCD and KPMG India's Global Delivery Center, Ltd. – echoes this: "The best directors can navigate all these disruptive forces, and at the same time help their own companies disrupt boardroom thinking enough to ensure their companies have a future."
For more information about WCD and boardroom trends, please contact Suzanne Oaks Brownstein or Trang Mar of Temin and Company at 212.588.8788 or news@teminandco.com.
About WomenCorporateDirectors Education and Development Foundation, Inc. (WCD)
The WomenCorporateDirectors Education and Development Foundation, Inc. (The WCD Foundation) is the only global membership organization and community of women corporate directors, with more than 3,500 members serving on more than 8,500 boards. A 501(c)(3) not-for-profit organization, the WCD Foundation has 71 chapters around the world, with seven more to launch over the next year. The aggregate market capitalization of public companies on whose boards WCD Foundation members serve is over $8 trillion. In addition, WCD Foundation members serve on numerous boards of large private and family-run companies globally.
WCD Foundation membership provides a unique platform for learning from the intellectual capital of accomplished women from around the world, and the WCD Foundation's mission is to increase courage, candor, inclusion, and cohesion in the boardroom.
The WCD Foundation has 71 global chapters, located in Arizona, Atlanta, Austin, Beijing, Boston, Charlotte, Chicago, Chile, Cleveland, Colombia, Columbus, Dallas/Fort Worth, Delhi, Denmark, Finland, France, Germany, Greater Colorado, Greater New Mexico, Guatemala, Gulf Cooperation Council, Hanoi, Hawaii, Ho Chi Minh City, Hong Kong, Houston, Iceland, Indonesia, Israel, Japan, Kansas City, Kenya, London, Los Angeles/Orange County, Malaysia, Melbourne, Mexico, Milan, Minnesota, Mongolia, Morocco, Mumbai, Netherlands, New York, New Zealand, Nigeria, Northern California, North Florida/South Georgia, Panama, Peru, Philadelphia, Philippines, Quebec, Rio de Janeiro, Rome, San Diego, Sao Paulo, Seattle, Shanghai, Singapore, South Africa, South Florida, Spain, Switzerland, Sydney, Tampa, Tennessee, Toronto, Turkey, Washington, D.C., and Western Canada.
For more information visit www.womencorporatedirectors.com or follow us on Twitter @WomenCorpDirs, #WCDboards.
SOURCE WomenCorporateDirectors Education and Development Foundation, Inc.
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