Connecting the Dots: Governing through Disruption

In my governance portfolio, I very much enjoy leading across a variety of industries. My board roles at companies like Dunkin Brands Group, Brighthouse Financial, and Tailored Brands allow me to both contribute my expertise and deepen my knowledge of different operating models. I find that I am constantly honing my ability to encourage management to consider ideas from disparate business models, and that can make a critical difference during times of disruption.

In order to succeed, corporate directors must connect the dots about what modern businesses need and strive for growth and positive change through every stage of the business’s operations: while the sailing is smooth, during times of disruption, and when preparing for long-term sustainability. While I’m always learning, the following ideas have helped me fulfill my duty to govern and create value through times of disruption.

Identify, Understand, and Mitigate Turnaround Issues

Corporate directors must be courageous, independent voices in the boardroom. Navigating disruption can bring out the best—and the worst—in everyone. It is imperative during crises that directors check their emotions at the door and prepare to provide creative guidance and advice to management. This also is a time rife with possibility. While it can be difficult to navigate sensitive issues around business change, it is easier to create change when the platform is burning and the need for change is apparent.

Name and identify the issue at hand. Is your business in crisis because of a recession or at risk if the bull market goes bust? Is your business facing disruption from changing consumer preferences or decreased buying power? Once you understand the complexities facing your company, it is easier to work on a holistic oversight strategy. Many leaders will not want to dig in and uncover additional issues during a time of turnaround or crisis, but it is in the best interest of the company for directors to buckle down and urge management to reconsider its strategy.

When navigating industry change, it’s the board’s role to point out the hazards while management fights the fire. Because the board is not involved in the day-to-day operations of the business, its members will not be as focused on specific aspects of the company’s operations that may be blinding management to an opportunity or risk. Directors would do well to read often about the broad changes impacting not only our businesses, but the world at large. The board’s oversight might be just the key to saving the burning business—or seeing it collapse because a hazard was missed.

Stretch yourselves by having difficult conversations in the boardroom. Collaborative thinking in the boardroom is overwhelmingly considered positive, as consensus is important to guiding management toward strategic change. During difficult times, however, this type of environment can stifle conversations, hamper free thinking, and restrict exploring different management strategies and approaches that could strengthen the business. Of course, a board should be a unified voice in public, but in the safe space of a boardroom it is important to push boundaries and force hard conversations to the top of the agenda. In times of crisis this paradox of conflict and exploration inside the boardroom and unification outside it is the board’s duty.

Keep Consumers Top of Mind

The demographics of our nation are changing. Our nation is becoming more and more diverse, as well as globally oriented. Many businesses are at a crossroads, and if they do not react to their changing consumer base, they may face an existential threat. Understanding consumer needs and preferences is the first step in successfully navigating industry change. It is never a misstep to put yourself in the shoes of your customers in order to meet their needs.

Be aware of current events. Analyze customer data and community engagement where your customers live. Board leaders who think with a customer-first mindset are an asset to organizations and leadership. In this changing economy boards must concern themselves with how disruption by certain technologies and business models impact their current and potential customers. Choose to engage management in conversation about how adopting those disruptive concepts can be used to improve customers’ experiences.

Your board should set clear expectations for innovating through disruption. The board can partner with management to include goals for innovation into the company’s strategic map, and also can incentivize managers to meet certain metrics by including expectations as part of their remuneration plan. Disruption can actually spur innovation. For instance, when the fresh bread category at Dunkin was hit with the low carb eating trend, it not only sparked thinking on ingredients in bread’s current format, but also helped us to step back and think about what the consumer’s base needs were. In the end, bread is a “carrier” for many foods, so our innovation funnel began to populate with many more breakthrough ideas on carriers instead bread as a static format.

On the Horizon

There is a tremendous upside for companies willing to incorporate aspects of corporate social responsibility (CSR) into their operations and products. Consumers are becoming more aware of environmental and social responsibility and they want to support companies whose CSR values are in line with theirs. Investors are also keeping an eye on a company’s ability to monitor and report on their footprint on the environment.

The world grows more connected every day. The board can play an important role in helping the company’s culture to become one that places digital innovation first. Putting an emphasis on addressing the needs of a digital world must be addressed sooner rather than later. Be a futurist for your organization. The bulk of corporate leaders cut their teeth in a world where complex technology was science fiction, and while directors are digitally savvy at an increasing rate, they ascended to their role in a business world that looks very different from the one that their management team is operating in. But all directors can be students of technology. Boards may want to consider directors who have both a digital and an operational background to help their companies innovate and be on the forefront of emerging technologies.

NACD gives their members the tools so board members can find their voice, encourage innovation amid disruption, help businesses thrive, and much more. The discussion on these topics and more will continue at the 2018 Global Board Leaders’ Summit, happening September 29 through October 2 in Washington, DC. I look forward to seeing you there. 

How to Choose an Executive Search Firm

Organizations are increasingly partnering with executive search firms to identify, attract and retain top talent, and also to assess existing talent, build succession strategies and advise boards. Choosing the right executive search firm is a critical business decision with long-term impact. Find out what business leaders—from CEOs and CHROs to Boards of Directors and Procurement teams—need to know how to navigate a new breed of executive search firms. 

Looming Risks Are Driving the Need for Resilience

Editor’s Note: This is the second in a series exploring the board’s role in corporate resilience. Click here to read the first installment.

The structure of risk is changing. Across the world, accelerating rates of technological and social change are putting growing pressures on businesses, governments, and international structures to respond at a previously unseen speed. Interconnected stresses and shocks are challenging assumptions and best practices. Stand-alone risk mitigation and incident management approaches will not be enough, and have not been enough for some time. Adaptive approaches are needed.

Before your company considers what it needs to do to become more resilient (as discussed in part one of this series), it should also take time to consider how and why the risk landscape is changing at such a dramatic speed. Why is resilience becoming more important now?

Public trust in business is declining—and is being sped by data insecurity. Diverse, recurring incidents across many industries challenge confidence in corporate leaders and practices. These include data losses, repeated cyber penetrations (for instance, Sony has been breached several times in the past decade), leader-sanctioned data falsification, and deceptive practices. Europe’s General Data Protection Regulation (GDPR) raises the bar for protecting privacy and imposes severe penalties both for data loss and reporting delays which will challenge nearly every data-based company doing business on the continent. In any case, since companies cannot expect to avoid incidents in these environments, it behooves them to prepare in ways that build resilience and leave all concerned better off afterwards. The changing structure of risk is making this particular task harder all the time.

Geopolitical risk is rising after a period of relatively stability. Klaus Schwab, founder and chair of the World Economic Forum (WEF) Geneva, postulated that the world is entering a Fourth Industrial Revolution that will be characterized by “a fusion of technologies that is blurring lines between the physical, digital, and biological spheres.”  The velocity, scope, and systems-wide impacts of these changes will be massively disruptive, transforming how companies are managed, as well as means of production and distribution. This paradigm shift can provide very important collective benefits, raising productivity and improving qualities of life for many. But labor markets in many countries are likely to become more unequal and disrupted, with losses of jobs and a further bifurcation into “low-skill/low-pay” and “high-skill/high pay” groups.  A result may be societal inequalities and social tensions, which could generate significantly more refugees from “youth bulge” areas in the Middle East, Africa, and Asia. There also could be unrest in megacities and under-served parts of the developed world. The resulting geopolitical risks include domestic turbulence, scapegoat-finding, radical nationalism, and protectionism.

Technological change is accelerating. Most businesses consider technological change in their own competitive areas, but few have internalized its accelerating, interconnected parts. If a capability—say computing power per unit cost—doubles every eighteen months, in ten years it will grow by 10,000 percent, and in 15 years nearly 100,000 percent. Even if the doubling period is two years, in 15 years the increase is nearly 20,000 percent. The rate of growth may slow, or there may be dramatic increases in some capabilities, such as quantum cryptography. There may be new materials or advances that we have yet to foresee. The net result is that linear projections based on present conditions cannot work, however comfortable they may be, and useful they may seem for driving conversations and decisions.

Understanding the impacts of new technologies is complicated by the fact that many changes are occurring simultaneously, and across diverse areas. Some areas of biotechnology are changing even faster than computations per dollar. Robotics and autonomous vehicles are proliferating quickly. Additive manufacturing such as 3-D printing grows more sophisticated daily. Nanotechnology is entering widespread use, from batteries to medicine to new materials. The energy that underpins everything is undergoing several different types of transformation.  Changes across all these domains, plus areas like additive manufacturing and artificial intelligence, need to be at least considered in corporate planning, along with their interactions.

Even if a company is not directly implementing a particular technology, leadership needs to understand how the overall environment is changing and ask how it will affect the firm’s interests. These changes provide new opportunities but also add new risks—many of them interdependent, and without borders.

Technical and social risks are becoming more interconnected. Consider four examples of interconnected risks: Mobile devices, the Internet of Things (IoT), physical vulnerabilities of infrastructures, and insider threats. These might seem to be mainly related to information technology (IT), but they can have impacts across the company and the environment in which it operates.

Mobile devices are becoming more essential to daily life—and presenting more risks. They introduce threats that must be understood and addressed aggressively. The board should ask if devices issued by the company are password or PIN protected. Is the data on them encrypted? Can they be tracked or neutered remotely, at home and abroad, if lost or stolen? Does the company even have an inventory of them?

IoT risks are exploding. Almost no one understands the extent of cyber risk posed by the rapid deployment of the inherently insecure IoT. Even those who recognize IoT’s potential upsides and downsides find it hard to turn this into realistic risk assessments for their companies, much less for the outside organizations they interact with and on whose networks they may depend. This is not a hypothetical issue. Security cameras and corporate refrigerators already have been turned into attack vectors. How many companies have an accurate picture of their IoT connections, or plans for managing them over the life cycle of the components?

Physical infrastructure is becoming more vulnerable. Cyberattacks increasingly can do physical damage to infrastructure. Generators can be destroyed, industrial control systems hacked, and sensors corrupted to degrade output quality without showing up on monitoring reports. Medical devices are exceptionally vulnerable to hacking, leading to everything from misdiagnosis to death.

Social engineering and insider threats are rising. Beyond technology, the pervasiveness and danger of insider threats is growing. Some big data analytic applications are working to develop baselines of activities across a company from which anomalies can be detected in near-real time. It remains to be seen how effective these will be in the long run, but it is clear that traditional security approaches against insider threats and social engineering, e.g. phishing e-mail attacks, are failing too often.

Cyber Resilience

As noted in part one of this series, security approaches aimed only at locking down and keeping cyber threats out cannot work. There are too many penetration vectors, and the attack surface is too large, and growing. In 2016 Daniel Dobrygowski of the WEF was explicit: “Cybersecurity is no longer enough: we need a strategy of defence, prevention and response…. [L]eaders should be considering cyber resilience as a strategic goal.”

To be cyber resilient a company first needs to be resilient overall. Much of the focus of cyber resilience is on technology and network measures, referred to as operational or business resilience in part 1. But the cultural component of cyber resilience is equally critical. All members of the organization need to know their roles and execute them. People are both the first line of defense and the greatest weakness.

Role of the Board

These are complex problems that demand adaptive approaches. Few people in the company, including the board members and the most senior leaders, will have the expertise and the perspective themselves to address the technical issues, tie the disparate threads together, and understand the interdependencies. Yet it is essential that they ensure that the organization overall considers these challenges in decision-making.

In a March 2016 Director Dialogue, Judy Warner, editor-in-chief of NACD Directorship, summarized advice from a 2016 series of NACD roundtables on organizational resiliency: “Be skeptical. Trust, but verify. Resist complacency.” Because of the special nature of cyber resilience, the board might benefit from outside advice.

Future parts of the series will address how resilience differs from enterprise risk management, how companies can build a capacity for resilience, and what the board’s role should be in resilience.

Defying Conventional Wisdom, New Directors Expected to Speak Up

Of the 358 directors who joined Fortune 500 boards last year, 128 had no previous board experience. That’s according to Board Monitor 2018, our firm’s latest installment in our annual tracking of trends in non-executive director appointments. Many challenges are likely to surprise these new directors in their first year of board service. But in my conversations with the directors I have worked with as a search professional over the years, one surprise in particular comes up repeatedly: you’re expected to speak up right away, despite being new to the board.

Conventional wisdom says that new directors should keep their heads down for the first few meetings, say little, and wait until they get their feet under them before venturing an opinion. At one time that might have been good advice. But today new directors are increasingly expected to contribute to the board’s deliberations right away. Here’s why.

The velocity of business no longer leaves room for a leisurely pace in the boardroom. In today’s hyper-competitive world, organizations must be able to accelerate performance—to build and change momentum to get results more quickly than competitors. Boards too are feeling that pressure—as a result, they are adding new competencies in rapidly evolving areas that hardly existed a decade ago. If a new director was brought onto a board for his or her expertise in artificial intelligence or cybersecurity, for instance, the group can’t wait nine months or a year before hearing from that new board member on the subject in a substantive way. Further, even if initially the new director has been sought to fill a hole in the board’s expertise—in a market, a geography, a discipline, and so on—he or she is likely able to contribute in many areas, not simply function more narrowly in that area of specific expertise.

Onboarding practices are increasingly designed to enable new directors to contribute right away. These practices will likely include setting up time for a substantial conversation between the CEO and the new director to inform that person of how management views the company’s most critical challenges. He or she may be briefed by the chief legal officer and the lead director and chair. The new director may be encouraged to contact other board members and management, including senior staff and key business unit heads and to visit company sites and plants and facilities. And that new board member may be paired with an experienced director who will help him or her acquire some “cultural literacy” through post-meeting debriefings. Boards that take such care with onboarding have the right to expect that they will get the full value of the skills, expertise, and leadership of new directors from day one of their tenure. (That applies to the boards of some nonprofits, too, but a recent study conducted by our firm found that many nonprofit boards do no onboarding or do it poorly.)

New directors may have been brought in to help shake things up. Now that the business value of diversity has been widely recognized, some boards are seeking to become more diverse than ever—in background, age, national origin, gender, ethnicity, and experience. Unfortunately, if the new director is bringing something clearly different to a homogeneous board, he or she may feel too intimidated to speak up right away. Be sure to encourage new directors to speak up. Their appointment suggests that the board recognizes its need for other voices.

The company may suddenly find itself in a crisis that requires all hands on deck. Crises come in all shapes and sizes—activist investors, defective products, hostile takeovers, executive misconduct, natural disasters that threaten operations, and many more. From the point of view of directors, they all have one thing in common: they threaten the stock price and sometimes the continued existence of the company. There are few situations in which the director’s fiduciary duty to the stockholders is so starkly in play as in times of crisis, when all directors need to be heard. Be ready to hold new directors to task when all hands are needed.

Remind new directors that it’s their duty to speak, even in the face of opposition. Once in a great while the company and the board may be about to embark on a course that everything you know and believe tells you is likely to have dire consequences—for the brand, the business, or the stakeholders. Seasoned directors are aware of this, and they should iterate to new directors that if they sincerely think that remaining silent would do a grave disservice to the company and their colleagues, they owe it to the company—and to their own conscience—to offer their perspective. If they do it with visible concern for stakeholders, a manifest passion for the business, and genuine good will toward those with whom they disagree, they will deserve—and likely earn—far more respect than if nothing was said.

Not surprisingly, the encouragement to speak up should also come with some caveats: No talking just to hear yourself talk. No playing the expert card. No misplaced idealism that sends you tilting at windmills. No playing the gadfly, the nitpicker, or the contrarian—three ways to make a negative first impression and virtually ensure that your colleagues tune you out now and in the future. New directors should also be reminded that they are not the CEO or management.

In order for new directors to make themselves heard, they need to have credibility. Credibility is gained by building meaningful relationships with the other members of the board as soon as possible. That is perhaps the second most surprising takeaway for new board members that I hear. It’s not that they don’t believe in relationship building; it’s that they don’t think it can be done quickly given that boards meet infrequently and the members are usually widely dispersed. But those obstacles, coupled with the expectation that they will contribute out of the gate, are all the more reason to pour effort into connecting with new colleagues.

New directors who have been paired with a more experienced colleague should take full advantage of the opportunity to learn the ecosystem of the board, where the centers of power lie, and how consensus is typically reached. They should have dinner with members who live in their city or who might be visiting in the near future. They should schedule phone conversations with others. And while these encounters will help new directors get to know their colleagues as people, the focus should be on the concerns of the board and the company and how to add value. By building respect and trust at the outset, directors will feel far more comfortable when communicating —and ensure that as a director, your voice will be heard.

Turning Risk Information Into Boardroom Insight: Guidance From Fortune 500 Company Directors

What keeps you up at night? If you’re a corporate director, the answer to that question could be related to the risks your company faces—either the risks you’re aware of, those buried deep in a board book that haven’t emerged as major threats, or the risks that the board is totally unaware of.

Getting the right risk information at the right time is important, but only 29 percent of respondents to the 2017–2018 NACD Public Company Governance Survey indicated that their boards reviewed the effectiveness of their company’s risk information flow. How this information makes its way to the board is only part of the risk oversight picture, however. (Learn more about the role of general counsel in risk oversight and board oversight of a company’s risk culture.)

Just as important as the flow of risk information is the generation of insights relating to that information. To address this issue, the NACD, PwC, and global law firm Sidley Austin cohosted a meeting of the NACD Advisory Council on Risk Oversight—comprising Fortune 500 company risk or audit committee chairs—on April 25, 2018, in Washington, D.C. The meeting was held using a modified version of the Chatham House Rule, under which participants’ quotes (italicized below) are not attributed to those individuals or their organizations, with the exception of cohosts. A list of attendees’ names are available online.

Several key takeaways emerged from the meeting:

  • Directors should demand open, frequent communications—not surprises.
  • Management should be specific about risks; tailoring risk reporting to the business can uncover important insights, especially when opinions differ.
  • Tone at the top matters when it comes to board-management interaction around risk oversight.
  • Boards should consider how their companies can take advantage of technology to gain more insight from risk information.

Directors should demand open, frequent communications—not surprises.

You never want to be surprised,” one director said. “I ask management, ‘what are the issues you’re worried about, and what do we need to do about it?’ Constant communication is critical.”

In fact, when public company directors responding to NACD’s Public Company Governance Survey were asked which risk oversight practices their boards had performed during the previous 12 months, 79 percent cited communicating with management about the types of risk information the board requires.

Participants at the council meeting observed that although it is important for the board and management to establish protocols about what information is escalated to the board and when, directors must emphasize that judgment is often more important than process.

Risks always exist, but they can develop quickly, and not necessarily according to the board’s meeting schedule,” one director said. “I find comfort when management makes decisions about escalation that err on the side of earlier communication when things are in a gray zone.” Another director said, “We’ve experienced one or two issues that should have been brought to the board’s attention earlier. That’s caused us to revisit our escalation processes. These days, reputation and brand concerns might outweigh financial materiality thresholds.”

Practices shared by council members include:

  • Off-cycle calls with management.On one of my boards, the CEO has an [hour-long] optional call every two weeks with the board. It’s an update to let us know what’s going on with the company in general, and an opportunity for the CEO to share emerging issues,” one council delegate said. “Usually about half of the independent directors participate on any given call.…I find it quite effective.” At another director’s company, “the CFO and chief audit executive do a call every few weeks with the audit committee. Sometimes it only lasts 15 minutes, but it keeps us current on what’s happening in our highly regulated industry.”
  • Regular, deep-dive reviews with business leaders. “Each business owner reports to the [board’s] risk committee about their business. They [periodically report on] what’s changed and what keeps them up at night. The end result is that we, as a board, have a better understanding of their business. We can actually contribute more effectively in discussions about what is being done to mitigate those risks.

Management should be specific about risks; tailoring risk reporting to the business can uncover important insights, especially when opinions differ.

Delegates agreed that the directors should challenge management that the risk information reported to the board be specific.

If the risks aren’t very specific and are things that would apply to any company, I don’t think that’s very effective,” one director said. “We have to set expectations that the board doesn’t want to see boilerplate risk lists; we want insights about risks in the context of our business and our company’s circumstances.”

Challenging the management team to get specific about risks can expose differences in perception that generate valuable information. Paula Loop, leader of PwC’s Governance Insights Center, shared a helpful practice for understanding how various groups within a company perceive business risks. “Ask members of the board, the senior executive team, and members of middle management to rank the organization’s top risks. Often, there will be fairly strong alignment between directors and senior management, but middle management may have a different view that can be eye-opening.”

Such exercises can raise questions and open up avenues for discussion about not only the risks themselves but also processes and culture: a meeting participant noted that if middle management has an understanding about a different risk, and that risk is not getting communicated up the chain of command, that can be problematic.

At one director’s company, “bringing different groups together to discuss risk issues was very powerful. We conducted surveys that asked people where they were from, and they voted anonymously [on perceived risks]. The U.S. employees thought they were fine, but that the global parts of the company were in trouble, and staff in global offices thought the real risk was in the U.S.

Tone at the top matters when it comes to board-management interaction around risk oversight.

Insightful risk-related conversations between the board and management are undergirded by a healthy tone at the top—starting in the boardroom. “Directors need to be receptive to bad news and not punish the messenger,” one director said. For more in-depth recommendations on boardroom culture, see The Report of the NACD Blue Ribbon Commission on Culture as a Corporate Asset.

Meeting participants agreed that the board should set the expectation that the CEO and senior leadership are equally open to hearing about potential problems or emerging risk issues. They also emphasized the importance of intellectual curiosity as a characteristic of leaders who are able to successfully navigate risky and often volatile business environments: “We just went through a CEO succession plan, and we looked for someone who is able to stay up to date in a fast-moving environment,” one director said. “Our [candidate] questions have changed; they’re not only focused on experience and background. We want to know about how the individuals reacted in difficult situations and their personal approach to self-education and continuous learning.”

Boards should consider how their companies can take advantage of technology to gain more insight from risk information.

A council member pointed out, “Our entire conversation about risk is much more meaningful if we have reliable, quantitative data. Otherwise, it’s just qualitative information and directional [indicators]. How can we push management to be more specific [about risks]?” New technologies are assisting management teams and boards with the task of turning risk information into insight. But taking advantage of analytics tools and artificial intelligence, among other technologies, also can increase a company’s exposure to risk.

Seth D. Rosensweig, partner at PwC, said that companies’ use of data science should help directors think outside the box when it comes to risk. Rosensweig said he’s seeing more companies employ five key technologies: data analytics, robotic process automation, the cloud, blockchain, and artificial intelligence/machine learning. (Learn more about blockchain in the boardroom.)

He added, however, that there are challenges with using technology to enhance risk insight, particularly if a company implements a given technology but does not yet have the processes or controls in place to mitigate the risks associated with the technology, as well as the new data that may result from the analysis.

Questions directors can ask management include:

  • How could new technologies improve our risk reporting and analysis? What questions are we trying to answer?
  • How would new technologies interface with our legacy systems?
  • What new data would be produced as a result of new analytical techniques? How would it be used, and how would we protect it?

For Further Reading

Translating Risk Information Into Boardroom Insights

NACD’s 2018 Blue Ribbon Commission initiative is exploring board oversight of disruptive risks. Learn more at the NACD Global Board Leaders’ Summit, September 29–October 2, 2018.

What We’ve Got Here Is Failure to Communicate

One of the most important skills a leader contributes to an organization is the ability to communicate.  Every day management communicates up to the C-Suite, externally to clients and prospects, across divisions with their peers, and within their own team.  Effective team communication determines success or failure of a group.  Through our executive coaching practice and leadership development programs Career Partners International (CPI) has over thirty years’ experience improving communication among leaders and their teams.  Below are a few examples of poor communication frequently found in struggling teams.

Implied Expectations – Some managers fall into a habit of expecting their team members to read their minds.  Expectations and outcomes should be clearly outlined to allow employees to operate at their highest potential.  By taking the time to outline goals and expectations a manager also allows employees to ask clarifying questions and get everyone on the same page.

Lack of Upward Feedback – Occasionally employees find it difficult to express their thoughts to management.  As the frontline, employees have valuable perspectives and input to provide.  If there is a lack of trust between managers and employees, the employee may not feel comfortable enough to provide much needed input.

Meeting Fatigue – In a case of over communication, organizations are finding their employees time misspent with countless hours in meetings.  Meetings are important in aligning a team but be sure they are run with an agenda and clear goals.  Participants should walk away from a meeting with a clear understanding of what their role is and what the next steps are.  If meetings are run without clear intention, they become a burden instead of a benefit.

Lack of Individual Feedback – Especially in younger generations, consistent personal feedback is highly valued.  Waiting for quarterly or annual reviews to check in on an employee’s progress can cause a disconnect.  Frequent communication leads to better on the job performance and a more engaged employee.  This constant interaction helps cut off problems before they progress and encourages positive behavior.

Conflict Avoidance – A team, by definition, consists of multiple members, each with their own thoughts and personalities.  Similar to providing upward feedback, teammates should be able to provide each other with dissenting opinions.  By exploring new ideas and evaluating alternative approaches, teams become stronger and produce better results.

A team with strong communication skills is proven to be more efficient and drive significantly better returns than teams that are confused and unable to coordinate properly.  CPI utilizes a variety of assessments to get to the heart of a team’s communication issues.  Once the problem is diagnosed, our expert coaches craft a customized solution to eliminate the weakness and get the team on the right track.  With improved communication comes stronger returns, a more engaged workforce, and a more achievement-oriented workplace.

The post What We’ve Got Here Is Failure to Communicate appeared first on CPIWorld.

What We’ve Got Here Is Failure to Communicate

One of the most important skills a leader contributes to an organization is the ability to communicate.  Every day management communicates up to the C-Suite, externally to clients and prospects, across divisions with their peers, and within their own team.  Effective team communication determines success or failure of a group.  Through our executive coaching practice and leadership development programs Career Partners International (CPI) has over thirty years’ experience improving communication among leaders and their teams.  Below are a few examples of poor communication frequently found in struggling teams.

Implied Expectations – Some managers fall into a habit of expecting their team members to read their minds.  Expectations and outcomes should be clearly outlined to allow employees to operate at their highest potential.  By taking the time to outline goals and expectations a manager also allows employees to ask clarifying questions and get everyone on the same page.

Lack of Upward Feedback – Occasionally employees find it difficult to express their thoughts to management.  As the frontline, employees have valuable perspectives and input to provide.  If there is a lack of trust between managers and employees, the employee may not feel comfortable enough to provide much needed input.

Meeting Fatigue – In a case of over communication, organizations are finding their employees time misspent with countless hours in meetings.  Meetings are important in aligning a team but be sure they are run with an agenda and clear goals.  Participants should walk away from a meeting with a clear understanding of what their role is and what the next steps are.  If meetings are run without clear intention, they become a burden instead of a benefit.

Lack of Individual Feedback – Especially in younger generations, consistent personal feedback is highly valued.  Waiting for quarterly or annual reviews to check in on an employee’s progress can cause a disconnect.  Frequent communication leads to better on the job performance and a more engaged employee.  This constant interaction helps cut off problems before they progress and encourages positive behavior.

Conflict Avoidance – A team, by definition, consists of multiple members, each with their own thoughts and personalities.  Similar to providing upward feedback, teammates should be able to provide each other with dissenting opinions.  By exploring new ideas and evaluating alternative approaches, teams become stronger and produce better results.

A team with strong communication skills is proven to be more efficient and drive significantly better returns than teams that are confused and unable to coordinate properly.  CPI utilizes a variety of assessments to get to the heart of a team’s communication issues.  Once the problem is diagnosed, our expert coaches craft a customized solution to eliminate the weakness and get the team on the right track.  With improved communication comes stronger returns, a more engaged workforce, and a more achievement-oriented workplace.

The post What We’ve Got Here Is Failure to Communicate appeared first on CPIWorld.

Global Governance At Last!

Defining governance is easy enough. On its website for the United Nations Global Compact, the United Nations (UN) defines it as “the systems and processes that ensure the overall effectiveness of an entity—whether a business, government, or multilateral institution.” In the business world, this means board processes and stakeholder relations. As an example, we need look no further than the governance guidelines of our companies and stock exchanges. Nations, too, have governance codes that receive revisions from time to time. (See, for example, the recent revisions to the United Kingdom Corporate Governance Code which were recently announced by the Financial Reporting Council.)

But what exactly is global governance—and what does it mean for boards of directors? For decades now, scholars and pundits alike have been using the term, but definitions vary.

An authoritative definition comes from the UN itself, which wrote in a 2014 report that “global governance encompasses the totality of institutions, policies, norms, procedures, and initiatives through which States and their citizens try to bring more predictability, stability, and order to their responses to transnational challenges.” (A transnational challenge would be something like the global impact of the European General Data Protection Regulation, which was the topic of a recent NACD FAQ.)

The same UN report questioned how effective corporations have been in fostering global governance, accusing them of “lack of representativeness, accountability, and transparency.” In other words, the report said that boards can do more to represent, address, and disclose global concerns.

Historically, this has been quite true. In fact, four decades ago when NACD was established, corporate governance was merely a national matter. With the exception of anti‑bribery laws such as the Foreign Corrupt Practices Act—which jolted boards into supply-chain awareness—global issues were not on the minds of most US boards. Our very name, the National Association of Corporate Directors, spoke volumes. Like many of our fellow institutes around the world, we did not specify which nation we represented; we assumed that anyone who might join would be from our own country.

Setting aside our provincial past, let us not ignore the progress that has occurred since then, and NACD’s role in it.

  • In 1999, the Organisation for Economic Co-operation and Development (OECD) published the OECD Principles of Corporate Governance (subsequently updated in 2004 and 2015). All 29 OECD member nations approved these guidelines, which are now considered a global standard; they are currently endorsed by the G20 nations, as well. NACD’s own longtime advisor, the legendary Ira M. Millstein of Weil, Gotshal & Manges, along with his colleague Holly Gregory (now with Sidley Austin), played a major role in developing the guidelines.
  • In 2004, NACD cofounded the Global Director Development Circle with five other leading director institutes—from Australia, Canada, New Zealand, South Africa, and the United Kingdom—to share information and tools for director education. We were ahead of our time and the initiative foundered, but success would ensue.
  • In 2012, the founders rebranded this initiative as the Global Network of Director Institutes (GNDI). The founding members, convening in Wellington, New Zealand, were the same group of six director institutes, plus representatives from Brazil and Malaysia.
  • In 2015, NACD and the GNDI cohosted the first-ever Global Cyber Summit, supported by KPMG, AIG, and the Center for Audit Quality. This was global governance at its best. After all, cybersecurity epitomizes an issue of concern to directors all over the world—and one that demands collaboration and cooperation across borders. We built it, but would they come? The answer was yes. We welcomed delegates from a variety of countries, including a large contingent from Thailand. When I saw that directors would travel halfway around the world to a cyber event, I knew that global governance had arrived.
  • Our most recent Global Cyber Summit was held in Geneva in April, as described in a blog from our very own Katie Swafford, associate editor of NACD Directorship and editor of NACD’s BoardTalk blog.
  • And last but not least, on June 27, GNDI held its annual meeting in Bangkok. Representatives attended from most of the GNDI member institutes, which now number 21. NACD’s director of research Friso van der Oord represented us, as the group continued its work to develop a new global survey on governance practices, among other initiatives.

Global governance is real because our companies and economies will continue to grow more and more interdependent to achieve success. NACD is playing an important role in helping to shape global governance, and will continue to do so through its work with GNDI and by hosting events like the Global Board Leaders’ Summit.

I hope you’ll join us in building a better world by elevating board performance, wherever you are.

Global Governance-At Last!

Defining governance is easy enough. On its website for the United Nations Global Compact, the United Nations (UN) defines it as “the systems and processes that ensure the overall effectiveness of an entity—whether a business, government, or multilateral institution.” In the business world, this means board processes and stakeholder relations. As an example, we need look no further than the governance guidelines of our companies and stock exchanges. Nations, too, have governance codes that receive revisions from time to time. (See, for example, the recent revisions to the United Kingdom Corporate Governance Code which were recently announced by the Financial Reporting Council.)

But what exactly is global governance—and what does it mean for boards of directors? For decades now, scholars and pundits alike have been using the term, but definitions vary.

An authoritative definition comes from the UN itself, which wrote in a 2014 report that “global governance encompasses the totality of institutions, policies, norms, procedures, and initiatives through which States and their citizens try to bring more predictability, stability, and order to their responses to transnational challenges.” (A transnational challenge would be something like the global impact of the European General Data Protection Regulation, which was the topic of a recent NACD FAQ.)

The same UN report questioned how effective corporations have been in fostering global governance, accusing them of “lack of representativeness, accountability, and transparency.” In other words, the report said that boards can do more to represent, address, and disclose global concerns.

Historically, this has been quite true. In fact, four decades ago when NACD was established, corporate governance was merely a national matter. With the exception of anti‑bribery laws such as the Foreign Corrupt Practices Act—which jolted boards into supply-chain awareness—global issues were not on the minds of most US boards. Our very name, the National Association of Corporate Directors, spoke volumes. Like many of our fellow institutes around the world, we did not specify which nation we represented; we assumed that anyone who might join would be from our own country.

Setting aside our provincial past, let us not ignore the progress that has occurred since then, and NACD’s role in it.

  • In 1999, the Organisation for Economic Co-operation and Development (OECD) published the OECD Principles of Corporate Governance (subsequently updated in 2004 and 2015). All 29 OECD member nations approved these guidelines, which are now considered a global standard; they are currently endorsed by the G20 nations, as well. NACD’s own longtime advisor, the legendary Ira M. Millstein of Weil, Gotshal & Manges, along with his colleague Holly Gregory (now with Sidley Austin), played a major role in developing the guidelines.
  • In 2004, NACD cofounded the Global Director Development Circle with five other leading director institutes—from Australia, Canada, New Zealand, South Africa, and the United Kingdom—to share information and tools for director education. We were ahead of our time and the initiative foundered, but success would ensue.
  • In 2012, the founders rebranded this initiative as the Global Network of Director Institutes(GNDI). The founding members, convening in Wellington, New Zealand, were the same group of six director institutes, plus representatives from Brazil and Malaysia.
  • In 2015, NACD and the GNDI cohosted the first-ever Global Cyber Summit, supported by KPMG, AIG, and the Center for Audit Quality. This was global governance at its best. After all, cybersecurity epitomizes an issue of concern to directors all over the world—and one that demands collaboration and cooperation across borders. We built it, but would they come? The answer was yes. We welcomed delegates from a variety of countries, including a large contingent from Thailand. When I saw that directors would travel halfway around the world to a cyber event, I knew that global governance had arrived.
  • Our most recent Global Cyber Summit was held in Geneva in April, as described in a blog from our very own Katie Swafford, associate editor of NACD Directorship and editor of NACD’s BoardTalk blog.
  • And last but not least, on June 27, GNDI held its annual meeting in Bangkok. Representatives attended from most of the GNDI member institutes, which now number 21. NACD’s director of research Friso van der Oord represented us, as the group continued its work to develop a new global survey on governance practices, among other initiatives.

Global governance is real because our companies and economies will continue to grow more and more interdependent to achieve success. NACD is playing an important role in helping to shape global governance, and will continue to do so through its work with GNDI and by hosting events like the Global Board Leaders’ Summit.

I hope you’ll join us in building a better world by elevating board performance, wherever you are.