In a rapidly changing business landscape, the role of a board is becoming increasingly complex. With numerous challenges to tackle, from keeping pace with societal advancements to appointing the right CEO boards must stay ahead of the curve and avoid common pitfalls. In this article, we will delve into how to go about maximizing board success in 2023 and some of the challenges you might be facing.
What are some of the biggest challenges facing a board in 2023?
It’s needless to say that boards are facing many challenges in today’s ever-changing society. One major challenge that permeates their overall work is staying updated with developments and changes in the business world. To avoid falling into the same old routine, it’s important for boards to constantly challenge themselves and seek new perspectives. This can be achieved by having regular strategy days and bringing in external experts to provide a fresh outlook.
However crucial it is for a board to stay up to date with current affairs, other challenging areas are important to highlight as well, such as working on cybersecurity, appointing a CEO, and addressing ESG (environmental, social, and governance) issues.
Cyber security as a challenge
Board directors have expertise in managing business risks but not necessarily cyber security risks. With the increasing reliance on technology and digitalization, boards will need to ensure that their organizations have strong cybersecurity measures in place to protect against cyber threats. It’s not a question of if an attack is going to happen, but when. Organizations need to be able to maintain awareness of the threat, take mitigation action to minimize the impact, and have contingency plans for getting back to normal operations as quickly as possible. The board’s responsibility is to ensure the company governance has a strategy for a potential attack.
Appointing a CEO as a challenge
Appointing the right CEO is a crucial decision for a board, but it is also rife with challenges. To minimize the risk of making a wrong decision, boards need to use a variety of tools and approaches, including extensive testing and focusing on a candidate’s achievements rather than just their interview performance. As the CEO is the bridge between the board and the staff, the CEO must be a fit for both parties. The right CEO can help implement a healthy corporate culture, set the tone for the work environment, and also guide the company towards its future goals, as per the board’s wishes.
Environmental, social, and governance (ESG) as a challenge
ESG concerns, such as climate change, social justice, and ethical business practices, are becoming more important to stakeholders – including customers, employees, and investors. As mentioned before, our society is ever-changing – which is putting pressure on boards to align with current social issues.
Boards will need to prioritize ESG issues and integrate them into their decision-making processes. Looking at sustainability and ESG through a strategic lens can assist the board in identifying key strategic issues, risks, and opportunities. By doing so, they can pinpoint 5 or 6 metrics that will effectively focus their attention and align performance with sustainability targets and goals.
The board needs to comprehend management’s approach to identifying ESG issues pertinent to the organization, evaluating their materiality, and determining the appropriate place and method for disclosure. To do so, the board must also scrutinize management’s assessment process for materiality.
What makes boards fail with these challenges?
Boards that fail to understand their role as strategic decision-makers and instead become bogged down in details and minor issues are likely to experience hardship with these challenges. Additionally, when a board is not constructive and fails to consider the input of all members, it can lead to a breakdown in communication and decision-making. The board members must overlook their interests and consider what’s best for the company’s success to build a comprehensive and sustainable future strategy with these challenges in mind.
What are the key factors that will make the boards succeed in 2023?
Speed and agility are key in a rapidly changing business landscape. Boards need to be alert and quick to adapt to new developments and trends to face these challenges. To remain forward-thinking, they must stay informed and seek out new information that can feed into their strategic thinking.
What actions should I take as a member of a board in 2023?
Actionable steps:
- Stay informed and up-to-date on industry trends and changes in regulations.
- Encourage open communication and collaboration within the board and with key stakeholders.
- Participate in developing and implementing a strategic plan that balances short-term and long-term goals.
- Foster a culture of continuous learning and improvement
- Encourage transparency and accountability in decision-making.
- Promote diversity, equity, and inclusion in all aspects of the organization.
By taking these steps, a board member can effectively lead and support the organization in meeting any challenges and also achieving its goals in 2023.
Does your board need to map out your challenges?
We understand how complex corporate governance can be. That’s why we at Governance@Work work to support directors, CEOs, and management teams in their strategic business development. We offer a survey that helps you map out any challenges, which eventually will help you elevate your governance performance.
In a rapidly changing business landscape, the role of a board is becoming increasingly complex. With numerous challenges to tackle, from keeping pace with societal advancements to appointing the right CEO boards must stay ahead of the curve and avoid common pitfalls. In this article, we will delve into how to go about maximizing board success in 2023 and some of the challenges you might be facing.
What are some of the biggest challenges facing a board in 2023?
It’s needless to say that boards are facing many challenges in today’s ever-changing society. One major challenge that permeates their overall work is staying updated with developments and changes in the business world. To avoid falling into the same old routine, it’s important for boards to constantly challenge themselves and seek new perspectives. This can be achieved by having regular strategy days and bringing in external experts to provide a fresh outlook.
However crucial it is for a board to stay up to date with current affairs, other challenging areas are important to highlight as well, such as working on cybersecurity, appointing a CEO, and addressing ESG (environmental, social, and governance) issues.
Cyber security as a challenge
Board directors have expertise in managing business risks but not necessarily cyber security risks. With the increasing reliance on technology and digitalization, boards will need to ensure that their organizations have strong cybersecurity measures in place to protect against cyber threats. It’s not a question of if an attack is going to happen, but when. Organizations need to be able to maintain awareness of the threat, take mitigation action to minimize the impact, and have contingency plans for getting back to normal operations as quickly as possible. The board’s responsibility is to ensure the company governance has a strategy for a potential attack.
Appointing a CEO as a challenge
Appointing the right CEO is a crucial decision for a board, but it is also rife with challenges. To minimize the risk of making a wrong decision, boards need to use a variety of tools and approaches, including extensive testing and focusing on a candidate’s achievements rather than just their interview performance. As the CEO is the bridge between the board and the staff, the CEO must be a fit for both parties. The right CEO can help implement a healthy corporate culture, set the tone for the work environment, and also guide the company towards its future goals, as per the board’s wishes.
Environmental, social, and governance (ESG) as a challenge
ESG concerns, such as climate change, social justice, and ethical business practices, are becoming more important to stakeholders – including customers, employees, and investors. As mentioned before, our society is ever-changing – which is putting pressure on boards to align with current social issues.
Boards will need to prioritize ESG issues and integrate them into their decision-making processes. Looking at sustainability and ESG through a strategic lens can assist the board in identifying key strategic issues, risks, and opportunities. By doing so, they can pinpoint 5 or 6 metrics that will effectively focus their attention and align performance with sustainability targets and goals.
The board needs to comprehend management’s approach to identifying ESG issues pertinent to the organization, evaluating their materiality, and determining the appropriate place and method for disclosure. To do so, the board must also scrutinize management’s assessment process for materiality.
What makes boards fail with these challenges?
Boards that fail to understand their role as strategic decision-makers and instead become bogged down in details and minor issues are likely to experience hardship with these challenges. Additionally, when a board is not constructive and fails to consider the input of all members, it can lead to a breakdown in communication and decision-making. The board members must overlook their interests and consider what’s best for the company’s success to build a comprehensive and sustainable future strategy with these challenges in mind.
What are the key factors that will make the boards succeed in 2023?
Speed and agility are key in a rapidly changing business landscape. Boards need to be alert and quick to adapt to new developments and trends to face these challenges. To remain forward-thinking, they must stay informed and seek out new information that can feed into their strategic thinking.
What actions should I take as a member of a board in 2023?
Actionable steps:
- Stay informed and up-to-date on industry trends and changes in regulations.
- Encourage open communication and collaboration within the board and with key stakeholders.
- Participate in developing and implementing a strategic plan that balances short-term and long-term goals.
- Foster a culture of continuous learning and improvement
- Encourage transparency and accountability in decision-making.
- Promote diversity, equity, and inclusion in all aspects of the organization.
By taking these steps, a board member can effectively lead and support the organization in meeting any challenges and also achieving its goals in 2023.
Does your board need to map out your challenges?
We understand how complex corporate governance can be. That’s why we at Governance@Work work to support directors, CEOs, and management teams in their strategic business development. We offer a survey that helps you map out any challenges, which eventually will help you elevate your governance performance.