It goes without saying that today’s Boards have an incredible responsibility as it relates to corporate governance. In a digital world, governance takes on a whole new meaning. The result is that directors, management, and shareholders must be cognizant and capable of handling the onslaught of scrutiny and opinions by employees, investors, regulators, and influencers that now traverse the social landscape. Further, Boards must ensure a climate of integrity, dignity, and ethics from which to lead and manage the organization.
But the most interesting shift in terms of Board responsibilities has to do with Reputation. Long understood to be at the core of Board value, maintaining or strengthening corporate reputation in a digital age is no longer a reactive exercise. Rather, Relevance is now the single most important oversight responsibility. It is quite frankly the strongest asset an organization possesses. Relevance can influence valuation, recruitment, retention, interest, and foster innovation. Relevance magnifies engagement among key stakeholders. It can also highlight a deep divide between a company’s position and a marketplace’s expectations.
As Boards grapple with this growing complexity fueled by technology and shifting circles of power, two critical questions must be addressed:
- Are We Relevant? As cited above, Boards need to be aware of the organization’s relevance among key stakeholders in order to gauge strategies, drive investments, monitor leadership performance, and determine risk. Unlike the view past Boards had of reputation, relevance is much more fluid and agile either accelerating momentum or choking off growth.
- What Is Our Narrative? Now more than ever, companies need to have an organizing story or narrative that captures the essence of the business at a certain point in time. Boards need to be grasp the clarity and simplicity of the corporate narrative so it becomes a natural frame of reference for their work.
Navigating an organization in a connected world in which convergence of knowledge, data, technology, and communication are intertwined completely changes the relationships inherent in our social and business paradigm. For Boards in particular the pressure to balance often competing priorities can be daunting. Not dealing with the two questions posed here only intensifies the demands placed on directors as well as the scrutiny shone on the organization.
Getting your narrative right and comprehending Relevance can result in organizational resilience or the ability to tackle head-on the challenges that confront a business. With this mind, Boards can go a long way to guiding the agenda in the context of a changing environment and focus their energies on increasing value for the enterprise.
It’s certainly a new day for Boards in shaping how organizations succeed in a global environment and assimilating the resulting effects in a proactive manner.
Doing so will ensure its work remains fresh and unfettered.
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