The Digital Age – A New Frontier For Every Board

Getty Images / Ali Kerem Yücel

The digital age is well and truly upon us, as evidenced by this magazine that has had a long and successful history in print media transferring to a digital format for future publications.

Big data, cloud computing, mobile commerce, smartphone penetration and the explosion of social media and its multitude of platforms mean that the leaders of organisations, whether in the non-profit or for profit sectors, must ensure their organisations remain relevant, sustainable and in the best position to deliver their mission and achieve their long term goals. So, what does the digital age mean for a board of directors and their quest for good governance?

Firstly, it means that the board must recognise that it is actually operating in a new era. Whilst denial may create a warm and safe place, it is artificial and doomed to contribute to failure. Acknowledging that the core components of communication of ten years ago are no longer relevant today is a good place to start.

We don’t know what we don’t know: it is difficult to understand, analyse and develop strategies around a particular issue if we do not even know the questions we should be asking in the first place. A board is required to make informed decisions and, if it does not have access to the right or all the information, then it is required to gain appropriate advice to assist in the decision-making process. If resources are available, engaging external advice is an immediate but short-term solution; the preferred option would be to recruit a suitably qualified and experienced person to join your board. This approach will not only address the short-term dilemma, but will build capability around the board table and potentially also within the organisation itself.

Getty Images / Ali Kerem Yücel

Attending conferences, participating in professional associations PD activities and generally applying the ‘enquiring mind’ principle will contribute to closing the gap between ignorance and a general understanding of the external environment in which we all operate.

Strategic planning: stakeholder engagement is a key element of strategic planning and the digital age has transformed (or should have) the way organisations communicate and engage with these groups. Aligning the service delivery of the business with the behaviours of customers/clients is fundamental to achieving the outcomes as articulated in the strategic plan. This requires both a responsive and creative approach to stakeholder engagement, but, more importantly, should achieve the same result – customer expectations are exceeded, quality services are delivered and strategic goals achieved. If digital strategies are not included in the board planning process, then it is highly unlikely such will be considered in the business and operational plans and opportunities will be missed.

Policies & procedures: given that the board accepts the importance of the digital world in the governance of the organisation, then it follows that policies and procedures should be developed and implemented to ensure board expectations are clearly understood and applied across the organisation.

Reporting & management: the reporting systems should be in place to assist the board in understanding how the organisation is tracking against its expectations, what is being learnt along the way during the implementation phase (and the learning curve will be steep during the formative stages, so be prepared for things to go not quite as planned!) and how knowledge gained can be applied to the next planning phase to continuously improve performance and outcomes achieved. In any new environment, the most successful are generally those that learn quickly from their mistakes, are prepared to take calculated risks and adapt to their environment and support each other along the way.

In summary, doing nothing to embrace the digital age is not an option, unless your strategy is to become obsolete in a short period of time. Fundamentally, the principles haven’t changed over time – business is still trying to provide a service/product that is valued by its customers and at a price that affordable to the client base and profitable to the organisation. The only difference is how this is delivered and the digital age is the next evolution of the business model. The board has a role to play in recognising the importance of this new digital era and its inclusion in the organisation’s operational framework, even if, in the first instance, it has no idea what it all means. Good luck!

Mark C. Schultz

For further information, go to www.governancetoday.com

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