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.
January 18, 2019
Posted in: WATSON Views
How Can the Board Really Know What’s Happening with Culture, Leadership, and People Risk Inside the Organization?
“We’ve made a commitment to inclusion and diversity. How are we truly doing, beyond demographic stats?”
“We need innovation everywhere, at every level – how do we know if we are creating the right conditions and seeing impact?”
“If we’re going to still be relevant in 5 years, we need different kinds of leadership and talent today. Are we getting there?”
Boards are increasingly aware that people, leadership and culture are critical to success in achieving their strategy, while also being a source of risk.
As advisors to those boards, we hear them asking the right questions. The challenge is that it’s tough for them to get good answers.
Directors either get too much data or vague reassurances from executives, who may themselves not know how to get trusted insight. In some instances, organizations get locked into an overly-scientific approach, delaying sharing data until they have a provable causal model. Or they discover that in order to provide “perfect” insight, they need new systems, metrics, and practices – which gets bogged down in cost and delays.
Boards need to understand the health of the business with respect to people and culture. Increasingly, we find ourselves recommending the use of people dashboards – not just the handy interface that your management systems make available, but something specific to the priorities of your organization.
How do you get there without getting bogged down?
- Start by aligning the board and management on what is relevant and important in terms of people and culture – prioritize and invest effort in the top 1-3 things needed to drive your strategy and achieve your purpose
- Take a cue from the world of “Agile” – get something out there quickly into the hands of the “customers” (in this case, directors), get their feedback, and learn
- Don’t wait until you have perfect data, the ability to measure every indicator you’d ideally want, provable causality, or perfect graphics – share what you can, with whatever caveats a reader needs to know, and then learn and improve
- If you don’t have a perfect metric – or if there is too much lag time – consider what indicators or signposts you could look for
- Keep the focus at the right level; directors need accessible insight they can understand quickly so they know what the right questions are, and when to ask for more detail
Our metaphor is Mission Control: not in the driver’s seat but able to monitor the health of the mission and be alerted when something is off track. You won’t build the whole control room right away, but let’s get those first few critical sensors and displays up and running.
January 4, 2019
Posted in: WATSON Views
By: Heather Kelsall, Senior Governance Analyst
You may not make it to the gym past January but set some new year’s resolutions with your board and you might just surprise yourselves come 2020.
Here are 5 ideas to start the conversation:
1. Act on Diversity
Start by defining what your board means by diversity and what a diverse board might look like in your context, then build diversity considerations into your skills matrix.
2. Educate Yourselves
The world is rapidly changing, and boards must be ahead of this change. Make a plan to educate your board and individual directors on governance and emerging issues and ensure your board is equipped to govern in a climate of complexity and disruption.
3. Check in on CEO Succession
If you haven’t yet had the conversation, this is the year to put it on your board calendar. No matter where your CEO is at in their tenure, it’s never too early to plan for the future, understand the talent pipeline and develop potential successors.
4. Understand Your Board Culture
Signal the importance of culture by looking inwards and assessing the board’s culture. Seek to understand how directors view the board’s culture and identify ways to sustain or improve culture for the benefit of the
5. Evaluate Something New
Tired of filling out the same rote board evaluation survey every year? This may be the year to finally introduce a peer evaluation process, take a deep dive on committee performance, or conduct a targeted evaluation of your board’s renewal practices.
What are your 2019 governance resolutions?
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.
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