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COMMUNITY UPDATE

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In this fast-moving, tech-driven age, Boards must ensure they and the wider business are prepared for the future. Today, that means looking beyond the immediate and pressing concerns to envision what a post-pandemic business landscape might look like.

Leading non-execs came together at Criticaleye’s Virtual Non-Executive Director Forum, held in association with EY and Tata Consultancy Services, to discuss where Boards need to focus.

Julie Carlyle, Leader of the UK Centre for Board Matters at EY, observed: “There are some mega trends – such as decarbonisation, technology, consumer behaviours, the changing working environment – that are going to impact all Boards across all industries and all sectors.

“It’s important for Boards to have some structure around how they think about these things that are coming over the horizon,” she said.

The pandemic has normalised change. Amit Kapur, Head of UK & Ireland at TCS, told the Forum that COVID-19 had provided an opportunity for businesses – and Boards – to completely rethink their futures.

“If you look at the upside of the current disruption, then it is all about reimagination. It is the reimagined world of individuals, employees, society and businesses,” he said.

At a time when everything is up for grabs, Natalie Ceeney, Vice Chair at Sport England, has found that Board discussions have benefited. “It’s allowed all the elephants to be placed firmly on the table. Business models are being challenged and NEDs have been able to air all the things that have been niggling in the back of their minds. It’s created a much more open place for talking about future strategy,” Natalie said.

Successful top teams must draw on insight from beyond the confines of those in the room. “Boards should be looking outwards and bringing in external perspectives about what is happening, be that mega trends or new technology,” Julie said.

“In the future, I don’t think we’re going to be relying on one Board member having a specific skillset. All the Board members must make sure they’re educated about what is going on.”

This was picked up by Natalie. “Having depth and range of experience is really valuable, but the ability to think differently is essential. That will come from deep business experience as well as a range of experience across many industries,” she said.

Making room for first-time non-executives can also bring its rewards. Lesley Knox, NED at Legal & General, explained: “They're often younger, they can bring geographical experience and they bring generational experience,” she said. “With most Boards there is always a risk of ending up with a certain cross section of society or age, so having someone younger and on their way up is actually a really good thing. It's tough for them, but they bring a completely different insight.”
 
Change at Pace

The view across attendees at the Forum was that the pandemic has accelerated changes that were already in play. Sir Peter Gershon is Chair of National Grid. He said that during COVID-19 his Board had observed how the company had become much more agile.

“[It] makes decisions faster than it did when in a business as usual state. So, now there is a lot of focus on making sure those features are embedded in the company when we return to some sort of normality.”

Julie agreed: “What COVID has done in the consumer space is accelerate structural trends, especially in relation to ecommerce. We’ve seen plans that were set to take place over six months happen in a few weeks.”

With this comes new risks. “As companies look to deploy more digital technologies and balance that with preserving human centricity, the Board must understand exactly what is behind those decisions and the risks that come from them. This has already moved very quickly in the COVID environment,” Julie said.

Amit stressed that technology was becoming so instrumental that it could no longer be viewed as an add-on for businesses.

“Digital is expanding everywhere, and more enterprises are really thinking about adoption and acceleration of digital practices. One of the key things that has happened over the last seven to eight months, is that technology has become central to how things have to be done today – and to how it will continue to be done into the future.

“Tech is no longer a [parallel] stream carrying on alongside the rest of the business – it is now the focal point.”

As we move towards an uncertain and unpredictable 2021, the perspective that Boards can provide will be crucial. Tom Beedham, Director for Board Mentors and NEDs at Criticaleye, said: “Boards must continue to balance the need to both support and challenge the execs.

“To do this well, Chairs must be looking now to make sure they have NEDs with the right skills, experience and diversity of thinking to navigate short-term challenges and deliver long-term success.”
 
David Hobbs, Senior Editor, Criticaleye

Our next Community Update will focus on highlights from the upcoming CFO Retreat.