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5 Predictions for 2019

December 19, 2018

Posted in: WATSON Views

By: Rachel O’Connor, Practice Lead – CEO Leadership and Performance

The end of one year and the start of another is traditionally a time when we look back and reflect, and think forward about what’s to come.

I do tend to make a resolution or two – less about climbing K2 or writing my bestseller, and more about thinking about how I’d like to grow and stretch a little.

As I start to think about what those will be for 2019, I’m also thinking about what the year will bring, at home, at work and in the world.

In my own backyard of WATSON and more specifically in my practice area of Leadership and Performance, here’s what I’m anticipating will show up for us in 2019:

  • More talk about of the board’s role in innovation: If innovation is on every organization’s agenda, directors need to be able to guide and oversee this strategic imperative.  There are challenges to this that run deep – from time and process, to composition and relationships.  In 2019 we’ll see more emerging best practices, and WATSON is looking forward to continuing its work here.
  • A deeper look at culture risk and opportunity: The research around culture is telling us a clear story.  It’s a huge lever for ethics, safety, risk, performance (and yes, innovation).  So how do we measure, align and optimize it?  How do boards and executives get real insight into what’s working and what isn’t?  I anticipate that in 2019 we’ll be helping more organizations get a handle on this one.
  • Dashboards, dashboards and more dashboards: Organizations are harnessing their data and analytics – most have now invested in the tools.  Now it’s time to get focused, intuitive and well-presented views of that data into the hands of executives and directors, to guide decisions and oversight.
  • More change demands stronger teams at every level:  As the pace of change is accelerating and specialization continues to deepen, we need the power of many different brains and skills working together.  We need to form and reform teams on a continuous basis.  That’s true at all levels, from the front line to the boardroom.  Skills in team effectiveness are crucial.  We’ll be talking about them in different ways in 2019 – agile teams in unconventional places, teams at the top leading together, boards actively working on their dynamics and teaming.
  • Diversity means more than you think:  We’ve all been on a collective journey around diversity and inclusion.  Bit by bit, organizations have improved and have seen tangible benefit.  But we are far from done.  There’s still lots of work to do around demographic inclusion and diversity – and increasingly we are seeing the importance (and business impact) of experiential diversity and cognitive diversity.  It will be interesting to see how leaders at all levels move the strategy and experience forward on this front in 2019.

That’s 5!  Need more?  Digital continues to impact everything… organization structures are evolving, and with that traditional accountability and performance measurement… legal and socio-economical structures are being redrawn… and yes, our planet is warming and changing.

What stays the same is the enjoyment of great partnerships and the satisfaction of doing good work.

Let’s do more of it together in 2019.

Rachel


Striking a Balance

February 25, 2019

Posted in: WATSON Views

We are aligned – board quality and composition are at the heart of corporate governance. In our practice, we believe you get the board you create. If you put thought, time, and effort into defining your board’s needs and intentionally filling those needs, the result is an effective, value-adding team. If you leave it to members, appointing bodies, or chance, the results… vary.

Intentional board composition is all about balance – balance of skill-sets, gender, and industry knowledge, balance between new voices and old. Great boards find the right balance between skill-sets to support the future strategy and characteristics that drive effective group dynamics. Despite the obvious importance of industry knowledge, we have seen countless situations where sound, informed opinions are undermined by an ineffective style, often resulting in bad decisions that could have been avoided. Hitting the right balance of board quality and composition is key to effective governance.

 

2019 Global & Regional Trends in Corporate Governance


The Board’s Only Employee

February 20, 2019

Posted in: WATSON Views

CEOs can be make-or-break for organizations – results, values and relationships are all at stake.

  • Almost half of CEOs fail in their first 18 months*
  • CEO failures can cost organizations 40x the CEO’s base salary
  • The human aspects of leadership challenge CEOs more than their traditional skills

What would a failed CEO cost your organization? Do your board practices contribute to your CEO’s success?

It’s an honest question. Boards are committed and hard-working. They understand the stakes.
Significant energy goes into CEO recruitment and CEO compensation but what about the rest of the CEO lifecycle? This is where the big wins and the big risks are hidden.

Do you know if your CEO is adequately adapting to a changing business landscape or effectively managing the critical 2ICs? Is the job what the CEO expected, and would you know either way?

Highly effective boards treat the CEO lifecycle as a mindset and a continuous activity, just as the best managers continually engage and guide their teams. The CEO is the board’s only employee; paying attention is critical.

*Research findings from HBR, Spencer Stuart and Egon Zehnder, respectively.


$700,000 Is A Lot of Money

February 11, 2019

Posted in: WATSON Views

Financial oversight is a key board responsibility, for organizations large and small. We often see unchecked spending scandals, à la Ryerson Student Union, at smaller organizations without robust internal controls and proper financial oversight by the board. Without malice or negligence, these organizations often lack financial expertise at the board level and simply just don’t know what questions to ask.

In Ryerson’s case, while they have a Finance Committee and several publicly-available financial policies, they likely lack financial expertise on the board as the board is largely populated by students. This is a considerable organizational risk, with significant financial, reputational, and human resource consequences.

When financial expertise is lacking on the board, there are options available to help fill this crucial gap. Some boards bring on external directors or committee members in a governance or advisory capacity to bring this important skill-set to the board table or finance committee. In Ryerson’s context, there are likely countless alumni and faculty members qualified and motivated to fill this role.

It’s an expensive lesson to learn.


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