ICD Global Governance Summit: Board Chair of the Future (1)

Last week, the Institute of Corporate Directors celebrated its 25th year by organizing the first ICD Global Governance Summit with a host of several renowned international speakers and eminent panelists. I had the privilege of moderating “Board Chair of the Future: Asia Pacific Board Priorities,” a speech given by Kirsten Patterson, chair of the Global Network of Directors Institutes (GNDI) and CEO of the Institute of Directors New Zealand.

GNDI is the umbrella organization of over 26 country institutes, including ICD, spanning six continents representing more than 150,000 corporate directors and governance professionals from diverse industries and communities. Truly, a global organization that is the Holy Land or Mecca of any serious corporate governance professional.

The panel that reacted to Kirsten’s speech was composed of three outstanding governance professionals, namely, former Governor of the Bangko Sentral ng Pilipinas and former SSS CEO, Ambassador Joey Cuisia; former BSP Governor Say Tetangco; and PNB Chair Flor Tarriela. All continue to be Independent Directors of various leading corporations. Allow me to share an interesting session that we had and some insights thanks to Google.

Kirsten shared with us the results of a global survey conducted in late 2022 as the pandemic wound down. My personal take after reviewing the actual survey report of GNDI is that the reactions of over 1,000 respondents — 37 percent of them from the Asia and Oceania regions combined, 27 percent from the Americas, 24 percent from Africa, with Europe and the Middle East combined at 12 percent — reflect clearly the freshness of the Black Swan event that plagued the world for well over two years. The survey respondents were asked to break down by timelines their concerns and what they believed should be the focus going forward.

The immediate timeline covers the next two years, meaning 2023-2025. The priority, ironically but perhaps not unexpectedly particularly for enlightened boards, as deemed by 66 percent of the respondents was to prioritize the long-term strategy amid an environment dominated by short-term pressures.

Immediately apparent concerns are the technological disruptions and rapid evolutions of business arrangements, i.e, reacting to the revolutionary onset of generative AI and Big Data; preference of the workforce for hybrid working conditions; supply chain constraints because of the pandemic and geo-political conflicts; and adjusting in a timely manner to constantly evolving customer and investor expectations. Agility is the order of the day for boards in the age of VUCA where Volatility, Uncertainty, Complexity, and Ambiguity became almost an everyday occurrence to expect.

Business continuity and resilience was the second concern at 39 percent that boards believe will be on their immediate must-do list. Again, understandable because the pandemic certainly caused businesses, particularly those with significant people to people interaction in their operations, to seriously rethink the viability of their business model. Attention to human capital came next at 26 percent, necessitated by the workforce shortages; adaptability to necessary skill sets; or inability to adapt to new skill sets, particularly on the technology side. This need very much applies to boards which could either require a retooling or even a significant revamp to reflect the constantly changing business environment.

But actually, because of the almost overwhelming rapidity of change, the new buzzword that has evolved from VUCA is BANI which stands for Brittle, Anxious, Nonlinear and Incomprehensible facing boards today. Brittle because we have seen that businesses built on shaky and outdated foundations can just collapse overnight because of some unforeseen catastrophe. Anxious because of the potential deleterious impact on people whether it be for health concerns, downsizing, closure of businesses, or revamped skills sets needed. Nonlinear because businesses can no longer enjoy the luxury of continuity no matter the success achieved in the past. So strategic planning based on a “business as usual” mindset is a dinosaur in the era of AI advances and Black Swans. And finally, Incomprehensible, because at times, possible solutions to complex business situations involving heavy volume of data generation from multifarious transactions are difficult to comprehend unless Big Data, or Data Science, is applied. (To be continued)

Until next week… OBF!

For comments, email bing_matoto@yahoo.com.