By Rob Starr, Big4.com Content Manager
The title of the 8th annual Directors’ Alert from Deloitte, Courage under fire: Embracing disruption, echoes the unique times we live in and the challenges facing boards as they grapple with a constantly changing sea of expectations.
Political events at home and abroad, the strong current of technological disruption and the constant specter of cyber attacks mean even those business models that work need to be revised and rejiggered. Successfully navigating these choppy waters means boards need to be constantly filling their sails with the winds of courage and strategy necessary to make sure no opportunities are lost and this latest report from Deloitte provides a map to chart their course.
“This is broad research into what is top of mind in boardrooms around the world,” said Dan Konigsburg, senior Managing Director of the Deloitte Global Center for Corporate Governance. “It covers 44 countries, so it’s quite a wide net that we cast here.”
The 2017 version offers several suggestions and makes it clear that sustained success in the current environment means innovation and disruption are both indispensable elements. Konigsburg explains the wide swath cut by the research.
Art and Science
“It’s a bit of art and science both,” he says. “We surveyed directors and then talked to our people about what they’re hearing as we go into the new year.”
Along with a list of recommendations including the resilient strategies and incident response plans surrounding technology and a revamped emphasis on culture in driving strategy, Konigsburg sees another thread woven throughout.
“What clearly comes through to me is we’re dealing with a much more unpredictable set of circumstances than we were just six months or a year ago,” he said adding the rise in shareholder activism has coupled with other factors like a rise in populism to make life more challenging for boards.
Chantal Rassart is a partner and Audit Knowledge Management Officer at Deloitte Canada. She concurs the findings in the report point to some common themes across geographic boundaries.
“From wherever we talk to people, it’s the same reality across the world,” she says. “There are
many new risks and the time to respond is much shorter than before.”
While there are slight differences in emphasis internationally, diversity of thinking at the board level, structuring conversation with equal voices and stimulating thoughtful and robust debate are three areas the report points to.
Rassart also stresses the need for effective boards to identify and avoid what’s termed a group think mentality.
“You can like this with the need for courage,” says the partner with more than 25 years of experience. “You have natural leaders when you put ten to twelve people in the same boardroom, but the chair needs to make sure everyone has a chance to share different kinds of thinking, ask tough questions and be motivated to go outside their comfort zones.”