The podcast and the article are brought to you by The Better Boards Podcast Series.

Governance professionals are no longer the quiet scribes in the corner. Today, they are critical voices at the heart of boardroom decision-making. In this episode, Dr Sabine Dembkowski speaks with Erika Eliasson-Norris, CEO of Beyond Governance and author of The Secret Diary of a Company Secretary, to explore how the role has evolved and why it remains misunderstood.

Through candid reflections and practical examples, Erika unpacks the challenges governance professionals face behind the scenes – from ethical tensions to boardroom politics – and shares how the role is changing as boards come under growing scrutiny.

“We’ve moved from record-keeping to future-shaping.”

In the last 10 years, Erika notes that governance professionals have moved from the edges to a more central role in organisations. She says they are now architects of organisational resilience, helping to anticipate regulatory changes, manage complex stakeholder expectations, and serve as the ethical compass of the organisation.

“It isn’t necessarily [due to] an increase in technical skill. I think that it is an increase, if not already there, in other softer skills.”

Erika credits the change in role for governance professionals to individuals in the role having a better understanding of their value, what they bring to the table, and how they can demonstrate that value in ways that other stakeholders in the boardroom and outside can understand and appreciate. By building a perception of value and building trust, governance professionals can more easily step into an advisory role.

Emotional Intelligence (EQ) is another significant factor in governance success.

Erika notes that governance professionals often must work in shifting and grey areas, so building EQ skills helps those in governance express ethical standards, create buy-in, and showcase integrity. It also helps with building influence across the organisation and with the board.

“Organisations that do governance well avoid a lot of corporate scandals and disasters.”

Erika feels that the governance profession remains relatively unknown and underutilised by boards. Many have some form of governance policies or ethical guardrails, but few have a dedicated governance professional in place. Erika sees this as a huge opportunity, especially for firms and boards that wish to prevent unnecessary scandals, embarrassments, and PR snafus, which she feels all have their roots in governance issues.

“It’s a real moment for governance professionals to step out of the administrative duties, to hand them over to either technology or somebody else, and to step into that advisory role.”

As Erika sees the governance role evolving, she notes that rising technological assistance is creating more space for governance professionals to be strategic advisors. AI tools, for example, can now handle a great deal of the administrative load – building board packs, logging decisions, updating statutory registrars, and similar tasks. This frees up governance professionals to focus on the advisory issues where boards need the most support, contributing more to areas like ethics, risk foresight, analysing regulatory impacts, and ensuring shareholder alignment. Erika strongly feels that the more boards can fast-track this evolution, the more upside they can unlock within the governance role.

“A great governance advisor to a board can flex as and when necessary, whilst keeping that absolute, ethical values-driven compass. That means that they’ve got that North Star.”

As much as something might be right for one organisation, it would be wrong for another. Erika believes the best governance professionals can help firms clearly articulate why they are making certain decisions at specific moments – including communicating these decisions to stakeholders if needed. Governance leaders also continually think about downstream impacts of decisions and how to support decisions down the line, to demonstrate the strength of the board and the power of the organisation’s decision-making process.

“Governance with grit means holding the line so the organisation can hold its future.”

Erika advocates for governance with grit. In practical terms, this often means standing up to powerful CEOs or board members, refusing to sacrifice trust and transparency for expediency, and holding fast to key organisational values in times of crisis. It is about picking battles and understanding nuances, considering second-order impacts, preventing panic, and making it easier for boards to make sound decisions in challenging situations.

“The biggest myth or misconception with regards to a Company Secretary is that they just take the minutes.”

To Erika, if the governance role is being well done, there are governance fingerprints all over the organisation’s most significant decisions. This is often not visible outside of the boardroom, but bringing some of those stories to life has the potential to elevate the profile and impact of the profession.

Erika’s recent book, The Secret Diary of a Company Secretary, offers insights into the work of eight Company Secretaries at high-profile, listed firms. She reveals how they handle some of the most challenging governance issues in the profession and the impact these “hidden” decisions have on thousands and tens of thousands of stakeholders and investors around the globe. She also keeps the tone accessible and approachable, so that even those completely unaware of the true scope of governance potential can dive in and enjoy the stories.

“It’s an amazing time to be joining the governance profession.”

With all the changes in the governance world, Erika finds it a fascinating time for early-career professionals to join the space. She believes that new arrivals should become accustomed to discomfort and develop a strong ability to listen, a strategic mindset, and an advisory heart. Governance is not simply about keeping the wheels turning in an organisation. It’s about helping steer the whole vehicle and providing clarity, challenge, and calm, with relationship building far more important than rote memorisation of rules or tick-box note-taking.

The three top takeaways from our conversation are:

1. In just a decade, governance professionals have gone from being minute takers to being trusted strategic partners, shaping deals, steering narratives, and helping boards navigate uncertainty with courage and clarity.
2. You need to know what good looks like. Good governance today isn’t about ticking boxes. It’s about giving boards the confidence to act decisively and ethically even when the path is unclear, turning governance into a genuine source of competitive advantage.
3. Boards should treat governance not as brakes but as the steering wheel, and use it to navigate complexity with vision, integrity, and purpose. This way, they don’t just succeed – they leave a lasting legacy.

Don’t forget to subscribe so you never miss an episode of the Better Boards Podcast Series. Available on Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or for more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: From Gatekeeper to Guide – How Governance Professionals are Shaping the Boardrooms of Tomorrow appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Owner-led organisations are the backbone of economies worldwide. Yet when the primary stakeholder is in the room, Boards must navigate a unique set of dynamics to be effective with governance, strategy issues, and advising.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, is joined by Tina Mavraki, who brings 27 years of board finance and natural resources experience to the conversation. A Chartered Portfolio Director, Tina held senior roles at Morgan Stanley, Citi, and Noble Group, where she scaled up multi-billion-dollar businesses. Her board portfolio spans FTSE100 candidate Metlen Energy & Metals S.A. and First Bauxite. At the same time, her diverse advisory work includes Starr Insurance, Piraeus Bank, White Oak Global Advisors, the European Bank for Reconstruction & Development, and the Children’s Investment Fund Foundation.

“Invariably, owners invite a Board into their structure because they’re looking to make a transformation.”

In Tina’s experience, the biggest reason owner-led companies establish a Board is for help with a significant change or transformation. They anticipate this development and aim to expand the pool of expertise and guidance available to them.

“What owners get out of this is perspective.”

Owners have a vision, but a Board provides perspective. This offsets an owner’s personal limitations and helps expand a vision into a coherent and workable plan. Boards also provide the emotional, mental, and tactical support for major transformations.

“Boundaries are the most beautiful tension you can get.”

For Tina, the way the Board and the owner define, expand, and refine boundaries is a significant experience. Figuring out lines and limits, understanding how those need to evolve to fulfil future ambitions, and creating workable succession, continuation, and growth plans are all places where Board members can have a measurable impact

Of course, it begins by building trust. This is especially important in owner-led firms. In most cases, the owner will know vastly more about the organisation’s operational details. So, Tina recommends that Board members make extra effort to understand the organisation and its structure, how it generates profits, and all its key players. This helps align future recommendations with business priorities and the idiosyncrasies of the owner-led firm.

“You need to understand very intimately the founders themselves. What are the key attributes that have brought this person here?”

In owner-led organisations, the Board and the owner have a more personal relationship. To make effective interventions, provide mentoring, or offer quality advice, Tina believes that Directors must first gain a deep understanding of the owner, including their strengths and areas for growth. Then, for best results, coordinate with the Board as a whole on sensitive conversations or strategic interventions.

“I like Advisory Boards very much… they are a beautiful forum.”

For owner-led companies where a full, formal Board is not a fit, Tina likes Advisory Boards. To her, they can bring in guest experts to dive into issues that wouldn’t be well-suited to a Board meeting or fit a permanent Board seat.

This rotation of minds also brings access to senior-level experts who may not have the time for a Board role, but who are willing to come and share their knowledge. Of course, they are temporary partners, but expanded insights and access carry benefits to owners.

The three top takeaways from this conversation for effective boards are:

1. Make time to understand the operating environment, the priorities, the players, and when and how to intervene.
2. Lean into the Board process.
3. Board impact is visible, critical, and direct, with immediate feedback.

The post The Better Boards Podcast Series: The Role of the Board in Owner-led Organisations appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

When pressures mount, Boards often default to easy narratives. Yet, today more than ever, it is important for Boards to pursue the uncomfortable truths. Critical thinking, discernment, and strategic dissent are key advantages Boards want to cultivate and celebrate.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, connects with Alex Edmans, Professor of Finance at London Business School. Alex holds a PhD from MIT and was previously a tenured professor at Wharton and an investment banker at Morgan Stanley. An in-demand speaker, Alex also serves as a Non-Executive Director of the Investor Forum and on Morgan Stanley’s Institute for Sustainable Investing Advisory Board, Novo Nordisk’s Sustainability Advisory Council, and Royal London Asset Management’s Responsible Investment Advisory Committee. He is a Fellow of the British Academy and of the Academy of Social Sciences.

“Rather than making broad claims… what I try to do is be more granular and look at the specific… dimensions that pay off.”

Alex sees Boards falling into common traps by failing to appreciate and acknowledge the nuances. Is sustainability universally and unequivocally the right path forward in all situations and at all times? Stated in this way, it is clear that the answer is no, yet boardrooms around the world hesitate to raise even slight amounts of dissent or debate.

It is the same with other situations Boards face. A lack of consideration for specificity, nuance, and the latest peer-reviewed research sets Boards up to be victims of trendy thinking, unprofitable generalities, and unproductive solutions.

“Think critically. If there is a study, think about “Are there alternative explanations for that result?”

Alex believes boards can avoid intellectual traps by engaging in critical thinking and intentional questioning. Look for alternative explanations to prevent being misled by industry headwinds or tailwinds, to avoid confusing rare talent with repeatable success, and to guard against internal biases.

Imagine the opposite of the result presented in any given study – would the reaction be the same? Do you like it less or more? Even this simple challenge can be enough to reawaken discernment and activate critical thinking pathways. It helps separate signal from noise and reduces the number of truly mission-critical priorities and projects.

“Actively seek dissent, reward it, and be wary of the fact that you as Chair … might unintentionally reduce dissenting opinions.”

Chairs play a special role in fostering debate and discernment. Alex advises Chairs to refrain from giving their opinion first, create space for other views and avoid anchoring topics on “approved” outlooks. Do the same in written communications, keeping comments to the end or soliciting feedback without indicating a preference on the outcome. Further, when dissent or objections are overruled, reinforce that there was value in the conversation even if the decision went in a different direction.

“Every company says we value a diversity of opinion, but when the rubber hits the road, how many of them act in that way? Probably a minority, a significant minority.”

Alex sees some companies treat dissent like a luxury reserved for good times. Yet, tough times are when honest debate and differing viewpoints matter most.

He acknowledges this is not easy. Simple to say, but not easy to do. Still, defaulting to the status quo is the ultimate risk. You want to be different from your competition.

The three top takeaways from our conversation for more effective boards are:

1. Academic research matters.
2. Critical thinking matters. Question the things you want to be true.
3. Encourage dissent within others. 

Don’t forget to subscribe so you never miss an episode of the Better Boards Podcast Series. Available on Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or for more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Overcoming Misconceptions and Lies in the Boardroom appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

The role of the Board Secretary is at a crossroads. Traditionally, it has been seen as a guardian of governance, the keeper of the minutes, and the facilitator of board processes. Now, with the rise of AI, the growing complexity of governance, and the increasing need for insight-rich strategic support, conventional expectations are being challenged. The question is not if the role is changing; it’s how those in it will choose to respond.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, is joined by Moya Hayhurst, a Fellow of the Chartered Governance Institute. Moya has over 25 years of experience in corporate governance across multiple industries, including mining, financial services, and insurance. She is also a member of the Centre for AI in Board Effectiveness research team, helping progress AI’s role in board ecosystems.

“Board secretaries are caught in the middle of that [AI] transformation.”

AI is everywhere, including boardrooms. Many board members already use and benefit from AI applications. They want to know how Secretaries plan to make AI a part of their role.

For Secretaries in purely administrative roles, this is an opportunity for a change. By becoming familiar with AI tools and utilising them to streamline administrative tasks and parse data more efficiently, Secretaries can provide more strategic analysis and insights. They can move into a leading position on governance issues, risk management, and proactive guidance.

“They know where to find everything, and they know the dangers of what is at their fingertips.”

Moya notes Secretaries listen and gather input from all parts of the organisation, often speaking little but influencing quietly in the background. With AI, Boards and Secretaries have the chance to surface more of the institutional knowledge Secretaries contain, do it efficiently, and do it in a way that brings key insights forward when they are needed most. While administrative elements are still important, Moya believes strategic elements are critical for good governance and the long-term survival of the firm.

“You have to step out of the shadows and make your voice heard.”

For Secretaries to succeed, Moya recommends leaning on networks and peers. She advises doing what the Company Secretary has always done best: asking questions, understanding the risks and dynamics, and then looking internally to figure out how to help the company navigate the situation.

For her, the biggest thing is not to say no. Ask how. Connect with experts and individuals who, in many cases, will be more than happy to talk and share their knowledge and insights. Secretaries don’t have to know how to do everything, just how to step out and ask.

“If we continue to justify ourselves as administrators and write a good set of minutes, we will not have a future.”

For Moya, the choice is clear. Secretaries can choose to be pure administrators and be replaced by AI tools, or they can embrace change. By leaning into the shift in mindset and leading by example in embracing new tools, Secretaries can create a very interesting role for themselves for years to come.

The three top takeaways from our conversation for more effective boards are:

1. This is not a task shift. It’s a role shift. The role needs to evolve in purpose, not just process.
2. The Board Secretary must step forward. If they don’t, someone else will. It’s not a competition, but a necessity.
3. For new Secretaries, there’s a need to be very intentional about developing capabilities. Secretaries must become digitally fluent, interpret data, reexamine governance design, and take on a mindset of strategic enablement.

Don’t forget to subscribe so you never miss an episode of the Better Boards Podcast Series. Available on Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or for more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Beyond Minutes – Reimagining the Board Secretary in the Age of AI appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

In this episode of the Better Boards Podcast, Professor Katja Langenbucher explores how boards can embrace AI to future-proof their decision-making.

Dr. Sabine Dembkowski speaks with Katja, a law professor at Goethe University in Frankfurt and affiliated with SciencesPo, Paris. She serves on the supervisory boards of BaFin and IEP, bringing extensive boardroom and academic experience.

AI isn’t a Trend—It’s Becoming a Legal Expectationisn’t a Trend—It’s becoming a Legal expectation.

AI is rapidly reshaping industries—from pharmaceuticals to finance—and boards can no longer afford to stand still. Katja outlines why boards must move past hesitation and actively integrate AI into their processes. She explains how leading organisations embed AI into strategy, what this means under the business judgment rule, and why AI should challenge—not replace—human insight.

AI may still seem opaque to some directors, but that view is increasingly out of step with governance expectations. In jurisdictions applying the business judgment rule, directors must demonstrate informed, reasonable decision-making. AI is becoming part of that expectation. “Very soon, you cannot claim to be well-informed without consulting an AI.” Boards have long leaned on expert input for board evaluations and strategic oversight. Going forward, AI must be part of that toolkit—or boards risk falling short of legal standards.

From Coffee Chains to Capital Markets: The Real-World Power of AI

Katja cites practical use cases—like how Starbucks applies AI to optimise store locations using behavioural, geographic, and competitor data. “You can use AI to identify an M&A target, spot a hostile takeover risk, or even test how markets might respond to your messaging.” Yet, she observes that AI is still rarely referenced in board evaluations or agendas, despite its ability to surface risks, run scenario models, and sharpen decision-making.

The New Role of Company Secretaries

Company secretaries are ideally placed to help boards adopt AI meaningfully. Katja is clear: directors don’t need to code—they need to ask better questions. “Nobody is asking directors to code—but boards must ask the right questions.”

Challenging Groupthink and Elevating Debate

Groupthink continues to undermine board effectiveness. Katja shares a compelling example of using AI to simulate press responses—ranging from neutral to harsh—on a sensitive issue. “Seeing a mock ‘nasty article’ on the big screen challenged the entire board’s thinking.”

AI as Induction, Humans as Interpretation

AI and human judgment are not competing forces—they are complementary. AI finds patterns. Humans interpret them. “A good strategic decision is always a combination of AI and human thinking.”

Three Key Takeaways

• Don’t Be Late to the Party – AI is fast becoming a market standard. Boards that delay their adoption risk strategic, legal, and reputational disadvantage.
• Blend AI with Human Judgment – Strategic decisions should integrate the pattern-finding power of AI with the contextual understanding of directors.
• Use the AI That Suits Your Board – Every corporation has a unique data pool

Remember to subscribe and never miss an episode of the Better Boards Podcast Series. It’s available on Apple, Spotify, or Google.

To find out how you can participate in the Better Boards Podcast Series or for more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Can AI Make Better Business Decisions? appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

When organisations face a need for transformation, Boards must become catalysts for change. This requires specific behaviours so that Boards can successfully go beyond oversight to provide strategic leadership when it is needed most.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner, is joined by Lan O’Connor, a global transformation leader with deep experience in enterprise change. Lan helped lead Capgemini from a European to a global footprint. Her board experience spans Trinity Business School, Landmark Transformation, and Commercial Policy at the UK Cabinet Office during COVID-19. She is also a Fellow of the Royal Society of Arts.

“Change is part of life, part of business life. But transformation, thinking about transformation with a capital T, it’s not a change.”

For Lan, transformation goes beyond routine change. It is a fundamental rewiring and rebalancing of a company’s centre of gravity while retaining the cultural core. It requires four things:  agreement that the current state is not viable, an articulated future state, a watertight business case, and a scale so immense that the transformation is the singular agenda for the executive team and Board for the duration of the transformation.

“For a board, often a transformation with a capital T is perceived as a risk with a capital R.”

The role of the Board when it comes to a proposed transformation is not passive oversight. It’s active strategic engagement.

To Lan, in the first Board meeting about a transformation, the role of the Board is to vet the necessity of acting. The second step is to approve the business case. The third step is to scrutinise the approach and execution plans, as Lan believes the execution plan is where failure often hides, and Boards can make a significant difference.

“It’s the Board’s role to make sure that it has a good beginning, a powerful middle, and that the end point allows the company to breathe at the new level.”

Lan sees the Boards as the Executive Producers of a blockbuster movie. Boards must thus address rational, political, and emotional elements in play. The rational element is the business case. The political element ensures the Board and management team can act, make tough decisions, and escalate issues. Emotional elements reflect the level of buy-in needed for the transformation.

“One critical element to have at a board level is an ally versed in the psychology of transformation.”

Many Board members have experience with transformations, but not necessarily as the leader accountable for the change. They need supporting perspectives. A transformation guide can provide support in challenging moments, fight process fatigue, and give insights into the pace of change.

“I always say to Board members or even Executive Board members … to adopt a kind of an interview mindset.”

Lan believes that Board members benefit when they can explain what is happening and why in terms that an outsider could understand. This minimises jargon and boosts transparency. It also helps manage Executive Team perceptions and keeps a forward focus. In this way, Boards can step out and experience the impact of the transformation firsthand by being more present in the business without disrupting it.

The four top takeaways from our conversation for effective Boards are:

1. Understand the rational, political, and emotional elements.
2. Transformation is not forever. It’s also not a one-and-done transaction. Be attentive to the experience of the beginning, middle, and end.
3. Mark the official beginning and end of the transformation.
4. Transformation practitioners are subject matter experts. Seek out external perspectives to support the transformation experience.

The post The Better Boards Podcast Series: Steering the Shift – Board Leadership in Times of Transformation appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

As complexity grows and time shrinks, Board Directors are wondering how to stay ahead. AI is proving to be a performance accelerator – not just a support tool – but Boards must make an effort to incorporate it into workflows, governance, and their ongoing strategy.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, connects with Jamie Green, Co-Founder and CEO of Tutaki, an AI platform built specifically for Board Directors. Drawing on his experience at McKinsey and extensive conversations with Chairs, Directors, and governance leaders, Jamie created Tutaki to transform how Board members prepare, engage, and act. With a strong foundation in strategy, governance, and AI product design, Jamie is at the forefront of a new era of “augmented directorship.”

“The purpose of companies overall is to create value, and arguably the place where a lot of that value is created is the Board.”

To Jamie, increasing effectiveness at the Board level is massively essential for a company’s overall success. It enables a company to move faster and make better, more accurate decisions. Thus, AI tools that parse information and surface key insights can improve strategic planning and shift Board outcomes. The only thing stopping all Boards from doing this is the Boards themselves.

“I think every Board should embrace AI at some level.”

Jamie feels Boards should embrace AI. If they don’t, they will be left behind by others who do use it, including new graduate cohorts who have been raised in an AI-native world. By leading the way, Boards can create the right frameworks and guardrails to make AI an asset to the organisation.

“The best directors are using it to supplement their own insight. They are using their own context and just making faster, better decisions. They’re not using it to replace themselves.”

There are very real fears around output quality, data privacy, and over-reliance. Jamie freely admits this is an evolving space and that these concerns are valid. Savvy Directors are mitigating this by being intentional about AI use, asking the right questions, having guardrails for privacy, and continuing to apply their own discernment to what the AI generates or surfaces. 

“It’s riskier not to be using AI than to be using it.”

Jamie reports the risk that sticks with people most is, “What’s happening to my data?” He says that with the proper guardrails in place – such as turning off the training on the models, creating a private model, or hosting the AI on-premises – it’s no different than storing documents on OneDrive or Google Drive. To him, it’s a much bigger risk to let the competitors gain an advantage with AI tools.

What Jamie sees successful Boards doing now, in 2025, is mainly two things. First, they are having AI analyse things for them by asking tools like ChatGPT questions. Secondly, they are using AI to automate chains of events or tasks into workflows.

In the future, Jamie feels there will be AI Directors. Later, that may evolve into entire AI Boards. He doubts these will ever replace true human Boards. Instead, these will fill expertise gaps, manage processes, provide a sounding board, and create intellectual sparring partners for Directors or CEOs. Smaller and younger companies may get there first, before larger firms, but Jamie feels this will be possible within the next five years.

The three top takeaways from our conversation for effective boards are:

1. Not using AI is the riskiest option.
2. The best Directors and the best Boards are already using AI.
3. It can be hard to get the best out of AI tools. Remember to focus on discrete problems that need to be solved and find solutions that address those specific issues.

Don’t forget to subscribe so you never miss an episode of the Better Boards Podcast Series. Available on Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or for more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: 10x Your Impact – How the Smartest Directors are Using AI appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

In recent years, transformation skills have gained significant importance at the board level, as highlighted by our board evaluations. Culture and talent have steadily climbed the board agenda—yet notably, HR professionals remain rare in boardrooms. Why?

In this episode of the Better Boards Podcast Series, Dr. Sabine Dembkowski, Founder and Managing Partner of Better Boards, explores the vital role of transformation, culture, and talent with Devyani P. Vaishampayan. Devyani is the Remco Chair and NED at Norman Broadbent Plc and Supply Chain Coordination Limited, and an Independent NED on the Audit Board of ForvisMazars. She is also a Fellow at Chapter Zero—an initiative focused on climate-conscious board leadership—and a Board Mentor with Critical Eye.

Over the past seven years, Devyani has emerged as a successful AI entrepreneur. She recently completed a strategic exit from her AI Innovation Hub, which supported organisations in adopting AI for leadership, culture, and future-of-work initiatives. Her journey is underpinned by over 30 years as a global, multi-sector FTSE 30 Group CHRO, where she led complex, multi-billion-dollar organisations.

“It’s still quite rare to find HR professionals on the board. There’s a perception that HR is a support function, lacking commercial acumen—and therefore not a strong partner at board level.”

Despite this, Devyani believes HR leaders can earn their place at the table by demonstrating commercial insight, a firm grasp of business drivers, financials, customer impact, and strategic thinking. She advocates that HR professionals consider roles beyond HR or entrepreneurial ventures to broaden their perspectives and build credibility.

“It’s a cliché now—every second person is talking about AI—but very few understand how swiftly change is occurring.”

Transformation is not new, but the pace of transformation today is unprecedented. Devyani points to recent geopolitical shifts, such as tariff changes, as examples of fast-moving developments requiring boards to act with agility. Within this context, AI emerges as both an accelerant and a disruptor.

Boards must recognise AI’s dual nature: its vast potential for insight and efficiency, and its inherent risks—such as bias, data privacy, and trust issues. Instead of imposing heavy restrictions that could stifle innovation and employee engagement, boards should invest the time to understand and prepare for AI’s full impact.

“When it comes to transforming culture and talent, boards need to lead more, engage more, and get hands-on with what’s happening on the ground.”

According to Devyani, boards that excel in managing culture and talent transformation do three things well:

1. They bring in specialists. Recognising that not all leaders are well-versed in culture and talent transformation, high-performing boards engage experts who can help design the right systems and processes.
2. They stay connected. One exemplary board Devyani works with holds dedicated two-day sessions to meet directly with employees. This face-to-face feedback surpasses what annual surveys offer and provides invaluable insights into workforce sentiment and leadership capability.
3. They lead by example. Board chairs in particular can role-model values and lead cultural initiatives rather than leaving everything to the executive team.

“Boards today need to become mentors to the executive team.”

While some executives prefer a “nose in, hands out” approach, Devyani argues that most executive teams don’t have all the answers in today’s fast-paced world. A board that listens actively, provides context, and shares wisdom can become a trusted mentor and guide.

Skilled board chairs facilitate this by aligning the strengths of board members with executives, creating natural mentoring relationships. Subcommittees and cross-committee meetings can be structured to support ongoing conversations around leadership, strategy, and culture, without overburdening anyone.

Top Three Takeaways for effective boards:

1. HR leaders have a unique board advantage. Like CFOs, they regularly engage with the board in their executive capacity. Use this access to understand board dynamics, shape leadership discussions, and position yourself as a trusted advisor.
2. Go beyond your domain. Today’s board roles require more than deep expertise—you need breadth. Broaden your skills and perspectives to remain board-relevant and bring fresh value.
3. AI will reshape everything. As a board member, you are responsible for going beyond webinars and getting hands-on with AI. Understand its capabilities and risks firsthand to guide your organisation wisely.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Living with Uncertainty – The Importance of Transformation, Culture, and Talent appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

In this episode of the Better Boards Podcast, Professor Katja Langenbucher explores how boards can embrace AI to future-proof their decision-making.

Dr. Sabine Dembkowski speaks with Katja, a law professor at Goethe-University in Frankfurt and affiliated with SciencesPo, Paris. She serves on the supervisory boards of BaFin and IEP and brings extensive boardroom and academic experience.

Making Better Judgements: Why Boards Must Embrace AI

AI is rapidly reshaping industries—from pharmaceuticals to finance—and boards can no longer afford to stand still. Katja outlines why boards must move past hesitation and actively integrate AI into their processes.

She explains how leading organisations embed AI into strategy, what this means under the business judgment rule, and why AI should challenge—not replace—human insight.

AI Isn’t a Trend—It’s Becoming a Legal Expectation

AI may still seem opaque to some directors, but that view is increasingly out of step with governance expectations. In jurisdictions applying the business judgment rule, directors must demonstrate informed, reasonable decision-making, and AI is becoming part of that expectation.

“Very soon, you cannot claim to be well-informed without consulting an AI.”

Boards have long relied on expert input for evaluations and strategic oversight. Going forward, AI must be part of that toolkit, or boards risk falling short of legal standards.

From Coffee Chains to Capital Markets: The Real-World Power of AI

Katja cites practical use cases—like how Starbucks applies AI to optimise store locations using behavioural, geographic, and competitor data.

“You can use AI to identify an M&A target, spot a hostile takeover risk, or even test how markets might respond to your messaging.”

Yet, she observes that AI is rarely referenced in board evaluations or agendas, despite its ability to surface risks, run scenario models, and sharpen decision-making.

The New Role of Company Secretaries

Company secretaries are ideally placed to help boards adopt AI meaningfully. Katja is clear: directors don’t need to code—they need to ask better questions.

“Nobody is asking directors to code—but boards must ask the right questions.”

Understanding a company’s proprietary data and strategic priorities is a governance task. AI experts deliver the tools, but boards must frame the questions.

Challenging Groupthink and Elevating Debate

Groupthink continues to undermine board effectiveness. Katja shares a compelling example of using AI to simulate press responses, ranging from neutral to harsh, on a sensitive issue.

“Seeing a mock ‘nasty article’ on the big screen challenged the entire board’s thinking.”

Used this way, AI becomes a catalyst for challenge and debate, broadening the board’s perspective.

AI as Induction, Humans as Interpretation

AI and human judgment are not competing forces—they are complementary. AI finds patterns, and humans interpret them.

“A good strategic decision is always a combination of AI and human thinking.”

Board evaluation frameworks must reflect this dual approach. AI accelerates insight; humans weigh impact.

Three Key Takeaways

• Don’t Be Late to the Party – AI is fast becoming a market standard. Boards that delay their adoption risk strategic, legal, and reputational disadvantage.
• Blend AI with Human Judgment—Strategic decisions should integrate AI’s pattern-finding power with human directors’ contextual understanding.
• Use AI That Suits Your Board—Every corporation has a unique data pool. Boards must define the questions AI should answer and then select tools that match their specific needs.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Will AI Make the Better Business Judgement? appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

In an era marked by rapid change, technological disruption, geopolitical uncertainty, and economic volatility, understanding how analysts perceive boards is more important than ever. We turned to an analyst who operates independently of major financial institutions for a truly candid perspective.

In this episode of the Better Boards Podcast Series, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, speaks with Anke Richter, a seasoned credit analyst and strategist with nearly 30 years of experience in the bond markets. Based in London, Anke has held positions at JP Morgan, Deutsche Bank, and Moody’s, and brings a unique vantage point shaped by her work on both the buy-side and sell-side, as well as in a rating agency. She holds both the CFA Charter and CIMA accountancy qualification.

A Two-Step Approach to Company Analysis

According to Anke, the fundamentals of analysing a company haven’t changed:
“What you do when analysing a company is always the same.”

Step one involves scrutinising the company’s fundamentals—numbers, valuations, and performance indicators. Step two involves examining red flags in leadership or governance. Common issues include overly dominant founders in small firms or boards where everyone shares the same surname, particularly in family-run conglomerates in emerging markets.

Anke notes that although she doesn’t always request formal board evaluations, she views them as a missed opportunity for many firms. Proper board assessments and clear investor communication allow companies to spotlight their governance strengths and strategic priorities.

Bridging the Knowledge Gap Between Boards and Investors

Anke frequently observes significant knowledge gaps in how boards interact with capital markets. “We always find that people are sometimes not aware of how certain things are done or how things are perceived.”

Lack of familiarity with investor expectations can seriously handicap a company’s position. To mitigate this, Anke advocates for including individuals with capital markets expertise on the board. This experience ensures the board understands key market dynamics and investor sentiment.

Without such experience, even large companies can falter—speaking only to debt markets while neglecting equity investor concerns, or vice versa, can lead to a credibility crisis.

Fixing Investor Relations: Easier Than You Think

Investor relations, Anke believes, is an area where companies can quickly improve.
“This is something you can, as a company, very easily fix.”

Improvements don’t require massive budgets. What’s often lacking is not money but human resources and awareness. Clear communication, a well-maintained website, an accessible IR team, and informative roadshows are foundational but frequently overlooked.

Anke also points out two critical missteps:

1. Inconsistent messaging between equity and debt stakeholders—this discrepancy doesn’t go unnoticed.
2. Combative attitudes from executives during investor meetings can irreparably harm trust.

Beyond the Numbers: The Human Element

Anke acknowledges that while financial metrics are clear-cut, evaluating leadership is far more nuanced. “If I have an opportunity, I always want to meet management, but one also has to be realistic about whether you can assess whether they are good at running the company.”

Good marketing can mask weak fundamentals, and vice versa. She recalls examples where charismatic teams misled investors, and others where poorly presented but highly competent teams were underestimated.

Thus, successful investor relations require a balance: numbers must align with consistent messaging and credible leadership behaviour.

Top 3 Takeaways for Effective Boards:

1. Include Capital Markets Experience: Ensure that at least one board member brings direct market experience to guide strategy and communication.
2. Maintain Message Consistency: Align messaging for equity and debt investors. Mismatched narratives create confusion and erode trust.
3. Perception Is Reality: Be proactive in managing how the investor community perceives your strategies and governance.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: What Do Analysts Think of Boards? – An Unfiltered Perspective from an Independent Analyst and Strategist appeared first on The European Business Review.

Have you ever wondered how to sell a bold idea in the boardroom? Not just an idea different from what your organisation usually tends to do, but a really bold one that breaks ground in your industry? What does it take? What do you need?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards) discusses selling bold ideas in the boardroom with Dr Andy Palmer CMG, former COO at Nissan and President & Group CEO of Aston Martin. Known as “the Godfather of EVs”, Andy has led transformational change at two of the world’s most recognisable businesses in the auto industry. He led the first EV development and mass production in the world when he launched the LEAF at Nissan and helped ensure the long-term financial future of Aston Martin. Today, he is a turnaround specialist stepping in as Interim CEO/Executive Chair at Optare/Switch Ltd, PodPoint plc and Brill Power Ltd in recent years. He is also involved with a number of innovative and high-growth businesses operating in the clean transportation space in a non-executive/entrepreneurial capacity. Outside of business, Andy is the Founder of the Palmer Foundation, a charity that supports young disadvantaged people in pursuing an apprenticeship in the auto industry. 

“The bosses want the company to be successful so they can get their salaries, and the staff want the company to be successful so that they can get paid”

Andy attributes his rise from apprentice to C-suite and CEO of some of the world’s most iconic car companies to a combination of hard work, burning desire, and a little bit of luck. His journey began at 14, when his father handed him an old A-series engine, which he had spent countless hours dismantling and reassembling, igniting a lifelong passion for engineering. By 16, he had begun a technical apprenticeship at Automotive Products, a manufacturer of clutches and brakes. Over the next four years, he developed foundational engineering skills, earning a Higher National Certificate and joining the workforce in advanced engineering by 1979. The industrial environment of constant strikes and labour unrest in the UK at the time left an indelible impression on Andy, and he recognised that management and unions shared a fundamental goal: the success of the company. He started an ambitious plan to become the CEO of a car company. He pursued a degree in Industrial Management while working, which led to a role at Austin Rover as a fast-track candidate, where he earned a master’s degree in engineering while advancing to the role of Chief Engineer for Transmissions. During this time, he also served as an interface in the partnership between Rover and Honda, further expanding his expertise.

After reading The Machine That Changed the World, a book from MIT about lean manufacturing principles, Andy was inspired to move to Nissan, where he stayed for 23 years, including 10 years in the UK leading engineering for Nissan Europe, and a move to Japan as part of the Renault-Nissan Alliance. There, he led key functions such as light commercial vehicles and corporate planning while earning a PhD in engineering and an MBA from London Business School. His reputation grew with his leadership of the Zero Emission Business Unit at Nissan, which pioneered the Nissan LEAF – the world’s first mass-market electric vehicle.

“More than anything else, if you want to get on, then you got to work hard”

Andy acknowledges the advantages that come with a strong education but firmly believes that success ultimately depends on individual effort, and he credits hard work as the defining factor in his rise to leadership. For Andy, the road to becoming a CEO requires sacrifices, particularly when it comes to work-life balance. While his dedication provided his family with a good education and comfortable living, it came at a cost. “My kids benefited from my hard work but also sacrificed because they didn’t see me as much while I was climbing the career ladder.” He doesn’t downplay the roles of natural talent or education but insists that perseverance is the ultimate driver of success.

“What do I need to understand that would allow me to solve that problem?”

Andy attributes his success across a diverse range of organisations to his love for interdisciplinary experiences, combined with exposure to different segments of the transport industry – cars, vans, trucks, and buses. He recounts how the development of the Nissan LEAF influenced his current work. The challenge of coordinating industries such as steel production, charging infrastructure, and telecommunications was insurmountable at the time, so instead, Nissan focused on eliminating tailpipe emissions, successfully creating the first mass-market zero-emission vehicle. When Andy left Aston Martin in 2020, he entered a new phase of his career, exploring the zero-emission challenge from multiple angles. He began chairing companies in the battery space, emphasising the importance of chemistry, control, and cooling – the “three Cs” critical to battery technology. He founded Switch Mobility to address zero emissions in buses and trucks, High Low to explore micro-mobility, and Palmer Automotive and Palmer Energy to tackle energy storage and grid evolution. He also served as CEO of Pod Point, deepening his understanding of clean energy infrastructure in collaboration with EDF. Examining net zero from diverse perspectives gave him unique insights into the challenges of moving an entire industry toward sustainability.

“When the whole company is essentially against you, how important air cover is!”

Andy admits that selling the idea of the Nissan LEAF to the board was no easy task.  At the time, he was responsible for sales, including Nissan’s Japanese network, which the company owned outright, and the sales executives in Japan were vocal about their struggles, particularly as Toyota’s Prius dominated the market. However, as an engineer and a planner, Andy saw a different opportunity for him; hybrids didn’t make sense, so he proposed a bold leapfrog strategy to skip hybrids entirely and go straight to battery-electric vehicles. This was not a popular idea, and Andy recalls how critical it was to have the support and ‘air cover’ of then-CEO Carlos Ghosn, enabling him to push forward with the concept of the LEAF. Sales teams could either stick with internal combustion engines or commit fully to battery-electric technology – there would be no compromise with hybrids.  The risk paid off, and when competitors like Honda opted to follow Toyota with hybrid models like the Honda Insight, their products failed to gain traction in the market. Meanwhile, the Nissan LEAF became a groundbreaking success as the world’s first mass-market electric vehicle, helping to pioneer the transition to battery-electric technology well before Tesla entered the scene.

“Being a CEO should be about leadership, but there’s so much about corporate governance that sort of forces you to be safe”

Andy reflects on the challenges of bold leadership in today’s corporate environment, noting that many CEOs and executives hesitate to stick their necks out. Corporate governance, while necessary, can inadvertently stifle innovation by encouraging CEOs to play it safe. He stresses that non-executive directors have a critical role in supporting CEOs who are willing to take bold steps. Non-executives should empower leadership to take calculated risks and pursue innovation within a framework of accountability.

For Andy, leadership must balance the guardrails of governance with the courage to innovate and respond to market shifts. Failing to do so risks the future of the business and the livelihoods of its people.

“I’ve always been very happy to be the lowest IQ in the room”

When cultivating the skills needed for bold, innovative leadership, Andy emphasises the importance of surrounding oneself with the right people, building a multidisciplinary, multicultural, and multigender team, and providing diverse perspectives that enrich decision-making. One standout example from Andy’s career was the creation of a Market Intelligence Group at Nissan, which was comprised mainly of philosophy students, primarily women and predominantly Japanese. This group brought unique insights into cultural and generational trends so Andy’s team could foresee declining interest in traditional cars and the growing importance of green technologies. Andy also highlights the critical role of support within the organisation and effective communication across disciplines, particularly when it comes to risk-taking. Finally, Andy stresses the value of empathy in leadership. Even those who don’t fully agree with your vision must be given enough confidence to remain neutral and allow you the opportunity to succeed.

The three top takeaways from our conversation for effective boards are:

1. Try to find something in your career that you love and that you can be passionate about.
2. Education is more than just studying a particular subject – academia is about personal growth. So you’ve got to know a particular discipline very well and build your skill sets in other areas, like finance and communication.
3. Ultimately, we all work with people, and your ability to build empathy and sell something rather than tell something is important.

Remember to subscribe to the Better Boards Podcast Series to never miss an episode. It’s available on Apple, Spotify, or Google.

To find out how you can participate in the Better Boards Podcast Series or for more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Selling Bold Ideas in the Boardroom appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

This episode draws neglected attention to a decision-making error that is crucial to high-stakes decision-makers in all types of boards. Based on the concepts of bias, ‘deaf spots’, and ‘tone-deaf leadership,’ it contains a framework of misjudgement traps that act as warning flags. We also discuss solutions to sources of mental misinformation. This episode draws neglected attention to the sources of human misjudgement across all types of boards, from ego to identity to false narratives.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses navigating misjudgement with Nuala Walsh, non-executive director, chair and CEO of MindEquity, where she advises on reputation, culture and strategy. Appointments include Chair of Innocence Project London, iNED at British & Irish Lions, President of Harvard Club Ireland, Deputy Chair of The FA Inclusion Advisory Board, and Vice-Chair at UN Women (UK). A former FTSE-100 CMO with 30 years in investment management at Standard Life, BlackRock and Merrill Lynch, she is recognised among the 100 Most Influential Women in Finance. Adjunct Professor of Behavioural Science at Trinity College, her debut TUNE IN: How to Make Smarter Decisions In a Noisy World has won multiple international book awards.

“Even the smartest boards, I think, are more at risk of tuning out really what matters”

Nuala identifies context as the most critical factor influencing boards, and experience, background, and situational context limit a person’s perspective. For boards today, the challenge is compounded by a noisy and fast-paced world, and Nuala points to a combination of data overload, disinformation, and constant distractions as key factors undermining effective decision-making, combined with the pressure of speed and divided attention to create a “toxic mix” for sound judgment. Then, even the smartest boards are at greater risk of missing critical data, tuning out important voices, and rushing toward misjudgement. Boards are not immune to the effects of their decision ecosystems, and without intentional strategies to counteract these influences, the risks to effective governance remain high.

“We hear less; we misjudge more”

Nuala believes a key challenge for boards is the inability to fully listen and absorb what truly matters during meetings, which she terms ‘deaf spots’, stemming from a lack of appreciation for how the environment impacts human behaviour. Ironically, while a board’s reputation and performance depend on effective decision-making, the pressures of the boardroom often trigger decision risks, manifesting as a tendency to tune out critical signals and focus on what is convenient or comfortable. Under the strain of crises, conflict, or uncertainty, directors tend to rely on what they see rather than hear, and important data, uncomfortable truths, or divergent perspectives are often ignored or missed. Deaf spots differ from the well-known concept of blind spots. While blind spots refer to areas we fail to see, deaf spots occur when boards deliberately or subconsciously tune out important voices or data. The consequences of this tone-deaf leadership are significant, and Nuala argues, lie at the heart of many corporate scandals and governance failures, highlighting the urgent need for greater awareness and intentional listening in the boardroom.

“In order to know how to get it right, you need to understand why people get it wrong”

Nuala explains that to address echo chambers and tone-deaf decision-making, the first step for boards and directors is to recognise the problem. Overconfidence often blinds boards to their own vulnerabilities, with many assuming their judgments are sound even when presented with contradictory evidence. She highlights the illusion of validity, where boards cling to initial assessments despite red flags, whether in regulatory, budgetary, or risk-related decisions. She stresses the importance of analysing why decisions go wrong before jumping to solutions, referencing high-profile failures like Yahoo, which made 53 acquisitions, 52 of which failed. At Theranos, board members tuned out critical concerns despite whistleblowers and consultants raising red flags because the board was enamoured by the confident narrative of Elizabeth Holmes and failed to act. This, she explains, is a classic example of motivated reasoning – where individuals hear what they want to hear or avoid challenging a narrative that appears successful. Another example she cites is the Penn State board during the Jerry Sandusky abuse scandal, where, despite recurring allegations, the board remained overly confident in their governance and saw no reason to ask more profound questions. Nuala argues this reflects a fundamental failure to embrace second-order questioning – challenging assumptions and interrogating data, even when the answers seem obvious. She believes the broader issue lies in how environmental factors influence decision-making. Early warning signs are almost always present, but detecting them requires deliberate effort.

“A major warning sign of potential misjudgement is too much board consensus and groupthink”

Nuala also points to the behaviours and culture within the board itself, as boards often discuss organisational culture but rarely scrutinise their own. She highlights several key warning signs that should trigger reflection and corrective action. Boards that reward short-term results, especially under pressure or resource scarcity, are one issue. A Harvard study showed that CEOs who make quick, confident decisions are 12 times more likely to be promoted than those who take a more deliberate approach. High-pressure environments foster decision-making prioritising speed over sustainability, which may be a mistake.  Another warning sign is a lack of self-investment, and Nuala stresses the moral responsibility of boards to educate themselves, particularly on biases. There are over 200 cognitive biases, with 75 of them categorised into ten misjudgement traps in her work. Yet, most boards do not focus on understanding these dynamics, even though it could greatly improve their judgment and influence. Another issue is the failure to monitor behaviours and decision-making processes because, without active monitoring, boards lose the opportunity to address the human factors underpinning most business problems.  Data obsession is another warning sign, as while data is critical, boards often fall into the trap of wanting more and more, using it to avoid making decisions. However, studies show that additional data does not improve accuracy after a certain point, and in forecasting, 83 pieces of data offer no greater accuracy than five. To avoid misjudgement, boards must avoid too much consensus, which often signals groupthink and a lack of critical questioning.  While consensus may seem harmonious, Nuala argues that it often stifles dissent and discourages directors from fulfilling their duty to provide honest, independent opinions.  Another red flag she highlights is overly tight relationships between the chair and the CEO. This can lead to unbalanced power structures, suppressing healthy debate and fostering a rubber-stamp culture. Such “Country Club boards,” as Nuala calls them, prioritise non-confrontation over accountability, leaving organisations vulnerable to poor decision-making.

To address these risks, Nuala has identified ten core misjudgement traps that cloud boardroom judgment, grouped under the mnemonic PERIMETERS: Power, Ego, Risk, Identity, Memory, Ethics, Time, Emotion, Relationships and Stories. Each represents a source of misinformation that distorts decision-making. For example, power-based traps include biases such as the illusion of invulnerability or authority bias, where deference to a dominant figure overrides critical thinking, or the “halo effect”, where an engaging personality blinds boards to deeper issues. To combat such vulnerabilities, Nuala advocates for boards to assess their judgment risk profile, measure their susceptibility to these traps, and implement strategies to mitigate them.

“The peacock cares about who’s right, not what’s right”

Nuala highlights ego-based traps as one of the most dangerous influences in board decision-making. Ego, she explains, often leads boards to overestimate their ability to make sound judgments, creating a false sense of confidence or illusion of validity that results in rushed decisions, often made under the influence of distractions, time pressures, or overconfidence. Ego-based traps do not exist in isolation but intertwine with other factors such as risk appetite, identity, and emotion. A desire to leave a legacy or a narrative of denial or wishful thinking can exacerbate these biases, so boards must also consider the stories they are told – and the stories they tell themselves – when making decisions. She illustrates this with examples, such as the British Post Office scandal and the OceanGate submersible tragedy, where the CEO’s excessive belief bias led him to dismiss warnings from 38 experts, convinced his vessel would safely reach the Titanic. These cases demonstrate how ego and belief bias can combine with other traps to create catastrophic outcomes.

“Check your intuition”

Nuala offers practical advice for boards to enhance their decision-making and avoid common pitfalls, starting with intuition. While intuition often guides decisions, it is not infallible, and studies show that rechecking your intuition can improve decision accuracy by 10% to 40%. This process involves stepping back, fact-checking, and validating assumptions rather than relying solely on gut instincts and questioning assumptions, answers, and gaps in communication. By seeking clarification and challenging the information presented, boards can avoid taking data or narratives at face value. Her book outlines 18 science-based techniques to improve decision-making but notes that even a simple checklist is a powerful starting point. These practical steps encourage boards to approach decisions with greater intentionality and rigour, reducing the likelihood of misjudgements.

The three top takeaways from our conversation for effective boards are:

1. Your decisions really matter more than you think.
2. Nobody is immune from these misjudgements, so evaluate your board mindset regularly and teach, educate, and update constantly.
3. Not everything you hear is valuable, and not everything valuable is heard. Listen differently, tune in to what you hear, and don’t take things at face value because the smartest thing you can know is who to listen to and who not.

Remember to subscribe to the Better Boards Podcast Series to never miss an episode. It’s available on Apple, Spotify, or Google.

To find out how you can participate in the Better Boards Podcast Series or for more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: The Navigating Misjudgement – A Practical Framework for Better Board Performance appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Highlighting the dynamic dance between the board and executives in steering an organisation

The boardroom Tango is where strategy meets execution, highlighting the dynamic dance between the board and executives in steering an organisation. But what does an executive have to do to get the most out of non-executives? How does this dance between the two work? How can it be influenced and improved?

In this podcast, Dr. Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses the boardroom tango with Carol Ouko-Misiko, who is an experienced and enthusiastic leader in sustainability and enterprise risk management with over 20 years of experience transforming organisations across East Africa and beyond. Currently Group Sustainability and Risk Executive for Old Mutual Plc East Africa, she oversees 11 business units in the financial services sector, domiciled in 4 countries in East Africa. Before that, she was the Director of Risk and Audit for Britam Holdings Plc, with operations in 7 countries in East and Southern Africa. A founding member and Secretary of the Institute of Risk Management East Africa Chapter, she is a member of the leadership of the Compliance Society of Kenya and a member of the WEF Global Risk Report Advisory Board. 

“If I had to choose, I’d rather be where the magic is happening”

Carol starts by explaining that if she had to choose between executive and board member roles, she would always prefer the driver’s seat as an executive. Executives have the opportunity to take strategy and turn it into tangible outcomes, leading teams, navigating uncertainty, and shaping the future, and she believes that’s where the real impact happens.

Reflecting on her early days on the board, one challenge stands out—curating information. Distilling complex information into clear, actionable insights takes effort and discipline; as an executive, she initially struggled with this. It’s easy to be overwhelmed with data but far harder to refine information to enable thoughtful decision-making. The key is balance—enough detail for clarity but not so much that it clouds judgment. Effective board development relies on ensuring the right level of detail to facilitate strategic discussions while avoiding unnecessary complexity.

“It’s that delicate balance between a nose in, hands out approach”

The relationship between the board and management is a dynamic one. The board actively participates in governance, approves strategy, and maintains a firm grip on its fiduciary responsibilities. This is often characterised as a “nose in, hands out” approach, with board members highly engaged in significant decisions, risk evaluation, and executive performance but must also avoid micromanaging daily operations. Their role is to govern, not to manage, placing trust in executives to execute strategy effectively. However, challenges arise, and circumstances sometimes demand a more active role when an organisation faces significant change or distress, whether financial, structural, or transformational. In such cases, Carol accepts that a “hands-in” approach may be necessary. The balance between oversight and involvement is delicate; the right approach depends on the situation.

For Carol, transitioning from an executive role to a non-executive board position brought challenges because, having spent much of her career leading from the front, stepping back into a governance role required a shift in mindset. She acknowledges that she has been fortunate to work with experienced board members who have guided her through complex transitions, sharing their insights and helping her maintain perspective. She has also experienced the intensity of organisational change firsthand, with some efforts successful and others less so. The board’s ability to provide a broader view has been invaluable in those moments. When deeply involved in execution, it is easy to lose sight of the bigger picture. A well-functioning board ensures leadership stays focused on long-term strategy rather than getting lost in immediate challenges.

“Do we have the meeting before the meeting? I think it’s necessary, but it can’t replace opportunities for us to face issues without the bias”

For Carol, the meeting before the meeting is something she loves and hates – they feel counterintuitive. Yet, she has come to recognise their value because they provide an opportunity to break the ice, easing difficult conversations before they take place in a formal setting. These informal discussions help build rapport, align perspectives, and create consensus, especially when sensitive topics are on the agenda. However, Carol remains cautious about their potential downsides because pre-meetings can undermine transparency, bypass formal governance protocols, and discourage open, rigorous debate if misused. If board members become too reliant on informal discussions, there is a risk that critical issues will not receive the full scrutiny they require. The challenge is ensuring that these conversations support decision-making without replacing the necessary formal discussions that test different viewpoints without bias.

For Carol, the most crucial pre-meeting conversation is always with the board chair, and that relationship needs to be open and candid, without barriers. Beyond that, she sees value in engaging with fellow board members to create an informal space where concerns can be aired and perspectives shared. While these discussions can be beneficial, they should never become a substitute for structured, robust governance and disciplined decision-making.

“You need to have a bit of thick skin and a sharp focus”

For an executive to succeed in the boardroom, resilience, and focus are essential. Carol believes that executives must develop a thick skin and a sharp focus, but beyond that, they also need the ability to frame a compelling narrative. Rallying people around a vision or strategy is not just about presenting facts; it’s about storytelling. As non-executive board members are not involved in day-to-day operations, executives must articulate a clear, urgent case for action. A well-crafted narrative drives meaningful engagement and momentum.  Carol has come to appreciate that success in the boardroom is not about arriving with all the answers. The ability to listen, admit gaps in knowledge, and draw from the experience of non-executives is a mark of strong leadership, and emotional intelligence and self-awareness are also critical, as board members bring diverse perspectives.

Carol also credits mentorship as a key factor in long-term success. Having the right people for guidance and support is invaluable in shaping leadership growth. Board interactions should not be purely transactional; they should be focused solely on reviewing papers and checking items off an agenda. While structure and choreography of board meetings are necessary, they often leave little room for organic discussions that spark deeper insights and challenge conventional thinking. Some of the most valuable exchanges come from those informal, unplanned moments where real conversations happen. 

“The most valuable input that a non-exec has done has been to engage”

Carol recalls reading an article outlining the roles a non-executive board member can play. In her experience, the most valuable non-executives engage across all these roles, adapting their approach based on the situation. The first role is that of a mentor, where a non-executive provides constructive feedback, asks insightful questions, and proposes recommendations in the early stages of a discussion. The second is a partnering role, where they actively gather information before meetings and contribute meaningfully to discussions. The third is a more controlling function, where they step in on issues such as shareholder concerns or capital management. Finally, there is the more passive role, where they observe and provide oversight without direct intervention. Carol values most when a non-executive knows how to calibrate their engagement, shifting between these roles as needed, as the ability to adjust based on the level of risk, complexity, or urgency of an issue brings real value. A non-executive who can balance mentoring, active participation, and governance oversight creates richer, more meaningful board interactions and ultimately strengthens decision-making.

The three top takeaways for effective boards from our conversation are:

1. The boardroom is a lifelong dance– Executives and non-executives are in this for the long haul. Success comes from practice, patience, and constant adjustment.
2. Clarity is the choreography– The boardroom works best when information is simple yet powerful, allowing everyone to move in sync.
3. Constructive tension fuels success– Executives bring drive, non-executives bring perspective, and together, they create a partnership that keeps the organisation moving forward.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: The Boardroom Tango – Where Strategy Meets Execution appeared first on The European Business Review.

The podcast and the articles are brought to you by The Better Boards Podcast Series.

Every year, the world’s preeminent leadership advisory firm, Egon Zehnder, conducts a survey among CEOs to identify issues and challenges they face and how they deal with them. In this podcast, we highlight key findings and discuss the implications for CEOs and Nomination Committees challenged to align on the search criteria for CEOs.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses how to lead through complexity with Dr Nadine Rinck, a partner in Egon Zehnder’s Munich office. She heads Egon Zehnder’s infrastructure sector in EMEA and focuses on board advisory and CEO succession across sectors. As a former lawyer, she has extensive expertise in governance issues, making her a sought-after advisor on the effectiveness of leadership bodies and the structure and governance of organisations. 

“95% of the CEOs expect groundbreaking systemic changes in the next decade”

Nadine shares insights from a global study conducted with 500 CEOs across sectors, shedding light on what is dominating their thoughts and strategies. An overwhelming 95% anticipated groundbreaking systemic changes in the next decade, a shared expectation of the unprecedented complexity facing businesses today. This stems from the sheer scale and interconnectedness of simultaneous unprecedented changes creating a challenging environment for leadership.

The top five critical challenges CEOs cited were talent acquisition and development, AI adoption and impact, market disruptions, geopolitical instability and climate change/ecological impact. Nadine highlights that these challenges are not isolated, and their interconnected nature makes them even more difficult to navigate, requiring CEOs to adopt innovative, flexible, and forward-thinking approaches.

“The world is currently moving from complicated to complex”

Nadine explains that the world is shifting from being merely complicated to truly complex, which has profound implications for leadership – and complexity introduces challenges for which no clear solution exists, no matter how much effort or money is invested. This shift brings heightened uncertainty and often fear among teams and stakeholders, and this new reality is reshaping the role of the CEO. In the past, leadership styles focused heavily on CEOs collaborating, influencing, coaching, coordinating and motivating their team. While these traits remain essential, Nadine observes a growing need for leaders who provide more substantial guidance and explicit direction, as today’s CEOs are increasingly expected to act as compasses for their organisations, steering them through uncertainty and helping their teams navigate uncharted territory. This balance between collaboration and decisive leadership is becoming critical as complexity demands both adaptability and a steady hand.

“What can I do to make my CEO become better and support him or her in navigating this complexity?”

Nadine emphasises that navigating complexity does not mean CEOs must solve every problem themselves or adopt a hierarchical approach. Instead, CEOs are turning to specific sources for advice and support when tackling complex challenges. In a recent study, 63% of CEOs reported drawing on their peers and executive leadership teams for input. However, the results revealed a surprising gap in how often CEOs engage independent board members or chairs for guidance. Only 17% consult their independent board members and just 13% turn to their chairs for advice. For Nadine, these figures highlight a significant opportunity for boards to redefine their roles, and she advocates boards stepping into more active advisory positions, serving as sparring partners to their CEOs, shifting from traditional oversight to a more collaborative approach, helping CEOs navigate complexity and improve their leadership. During the COVID-19 pandemic, many boards and executive teams worked more pragmatically and collaboratively, creating stronger advisory relationships, which Nadine sees as a model for the future (with room for improvement). Boards must ask themselves how they can better support their CEOs, fostering an environment where leaders can confidently address the challenges of today’s business landscape.

“Leaders will need to develop adaptive abilities”

Nadine acknowledges that tackling today’s challenges requires a fundamental shift – a complete update of the “operating system” of leadership. For future CEOs, this means transforming their leadership identity and focusing on emotional intelligence and personal growth – difficult but essential for busy CEOs. She outlines three meta-competencies that form the foundation for adaptive leadership.

The first is self-awareness, which requires the ability to self-reflect and be brutally honest with oneself. She notes that this can be particularly challenging for CEOs, who often lack access to honest feedback in their professional lives. Workplace dynamics usually insulate them from such input, making self-awareness a rare but crucial trait and coaches or sparring partners invaluable.

The second meta-competency is relational capability, which includes building trust, forming networks, and genuinely connecting with others. Nadine emphasises that modern leadership increasingly values approachability, authenticity, empathy, active listening, and even showing vulnerability, qualities that humanise leaders and strengthen their influence.

The third meta-competency she describes is adaptability, which requires leaders to let go of outdated beliefs and unlearn no longer beneficial behaviours or strategies. This process can be challenging, as it involves shedding deeply ingrained habits and patterns formed over years of experience, but Nadine emphasises that unlearning is as important as learning. Leaders create space for new ideas, approaches, and perspectives by releasing what is no longer relevant. Adaptability also demands a mindset that actively embraces change, which Nadine feels is the cornerstone of leadership in a world where change is inevitable and relentless.

“Take people out of their comfort zones and see them in different settings and environments”

Nadine emphasises that while a candidate’s CV and experience remain critical, boards (and particularly nomination committees) must go beyond traditional criteria to understand behaviours and personalities for internal talent and CEO succession pipelines, building relationships with potential candidates much earlier in their careers, long before the formal selection process begins. Committees should create regular touchpoints, meet candidates at events, or even organise special gatherings to observe how they operate in different settings. These interactions provide valuable data points, helping boards capture a more comprehensive view of a candidate’s personality and leadership style.

For external candidates, Nadine highlights the importance of probing beyond technical skills and experience with psychometric tests, references, and simulated workshops for insight into how candidates behave under pressure and taking them out of their comfort zones to observe their genuine reactions in unfamiliar scenarios. She believes these methods are vital for understanding not just a candidate’s competencies but also their adaptability, emotional intelligence and ability to build trust, as the search for future leaders is no longer about identifying a specific skill or competency.

Instead, the focus has shifted to uncovering a candidate’s potential and capacity to grow and adapt in the face of future challenges. At Egon Zehnder, this potential is assessed through a framework built on four key dimensions: curiosity, insight, engagement, and determination. Nadine highlights curiosity as the most critical, as it will set the most impactful leaders apart, and by prioritising curiosity alongside the broader dimensions of potential, boards and nomination committees can identify candidates who are capable today but prepared to navigate the complexities of tomorrow.

The three top takeaways from our conversation are the three meta-competencies to help CEOs navigate complexities:

1. Self-awareness
2. Relational capabilities
3. Adaptability.

Remember to subscribe to the Better Boards Podcast Series so you never miss an episode. It’s available on Apple, Spotify, or Google.

To find out how you can participate in the Better Boards Podcast Series or for more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: How to Lead Through Complexity appeared first on The European Business Review.

The podcast and the articles are brought to you by The Better Boards Podcast Series.

The ESG narrative has become familiar but does not yet confront the challenges of a world where interest in sustainability is waning in some regions, political and economic divides are widening, and technology is reshaping the rules of the game. How can boards maintain momentum on climate and social issues when governments are focused on regulation and public interest is fractured? What will it take for corporate governance to adapt to trends such as nature and biodiversity loss, AI, shifting global power dynamics, and evolving definitions of fiduciary duty?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses whether corporate governance can survive sustainability with Frederik Otto, Director of Advisory and Head of Europe at global consulting and standards firm AccountAbility. His expertise is at the intersection of sustainability leadership, strategy, and governance. Previously, he founded and led The Sustainability Board, a globally recognised think tank for sustainable leadership and corporate governance. He was the Global Head of Client ESG & Advisory and subsidiary board director in two Asian countries at The Adecco Group and is an ally of the Council for Inclusive Capitalism, a Salzburg Global Seminar fellow, and an associate member at Chapter Zero. He is a well-published expert on board-level sustainability and ESG preparedness. 

“The purpose of the company is not just to provide profits to shareholders, but to serve all of their stakeholders.”

Frederik starts by explaining that sustainability is intricately tied to governance through stakeholder management and engagement. He recalls how the topic gained traction from 2017 to 2019, with influential figures such as Larry Fink of BlackRock and the US Business Roundtable emphasising that a company’s purpose extends beyond delivering profits to shareholders. Instead, it must also serve all stakeholders. That narrative led to a push for better ESG oversight, where boards were increasingly pressured by shareholders, employees, clients, and regulatory organisations to consider sustainability factors. Frederik highlights that governance plays a critical role in ensuring these issues are addressed and integrated into corporate oversight.

“The last five years have been quite the journey for sustainability.”

Frederik acknowledges that there is a sense of ideological fatigue around terms such as ESG and sustainability, and these words may even have become divisive, but the underlying issues remain critical. Sustainability includes climate, nature, human rights, social, technological, and geopolitical risks alongside significant opportunities. He stresses that a board’s fiduciary duty includes ensuring such matters are given due consideration, regardless of the language used to frame them, and so boards should look beyond the terminology and focus on the substantive risks and opportunities these issues present.

“We were seeing all these shiny sustainability reports and board disclosures…that were very explicit in how the corporation is providing value to all sorts of stakeholders.”

Frederik explains how the drivers of sustainability have shifted. While employee activism and stakeholder pressure were dominant five years ago, economic challenges such as inflation and layoffs have reduced their influence. Particularly in Europe, regulators have stepped in to fill this gap with legislation such as CSRD and supply chain directives. American businesses operating in Europe are also subject to these stringent regulations due to the Brussels effect, which extends European standards globally. Frederik believes boards must stay ahead of these changes and consider sustainability from both a regulatory and strategic perspective to remain effective.

Frederik highlights three key sustainability trends emerging for the future:

1. Nature and Biodiversity – Risks such as biodiversity loss are gaining attention, along with opportunities like nature-based solutions.
2. Artificial Intelligence – AI impacts businesses through changes to business models, operational challenges like cybersecurity, and ethical considerations.
3. Geopolitics and Geo-economics – Global hostilities, trade restrictions, and national security concerns related to climate change are influencing board agendas.

Frederik emphasises that these trends demand a strategic approach, as they present organisational risks and opportunities.

“It is often good to have a dedicated committee where the work is getting done”

Frederik describes ongoing debates about whether sustainability should be handled by a dedicated committee or integrated into existing ones. A separate committee allows for more focused discussions for organisations with significant environmental and social risks. However, this depends on the organisation’s size and context.  He believes sustainability issues may not receive sufficient attention during board meetings without a dedicated committee.  He also stresses the importance of intra-committee collaboration, ensuring that sustainability considerations inform audit, remuneration, and broader governance discussions.

“Do more scenario planning, do it more provocatively, and look as far as possible.”

Frederik stresses that boards must prioritise long-term sustainability goals alongside immediate operational challenges. He identifies three core responsibilities for boards: routine governance, crisis management, and future planning. He emphasises that robust scenario planning is vital for proactive governance, urging boards to explore even unlikely but plausible future scenarios. Tools like the Oxford Scenario Planning Approach help boards explore plausible futures, even those that seem remote, and align corporate strategy with potential long-term outcomes. Frederik believes this forward-thinking approach is key to prioritising sustainability issues. He believes aligning corporate strategy with these scenarios can help organisations prepare for various outcomes, ensuring sustainability issues remain integral to governance. He also encourages boards to dedicate sufficient time during meetings to address these long-term topics meaningfully.

“Often the corporate strategy is not reflected in the board documentation, let alone the sustainability strategy.”

Frederik identifies stakeholder governance as a hallmark of effective boards. He praises examples such as Rio Tinto, which restructured its governance and engaged directly with affected communities following a significant incident. Good boards, he explains, go beyond traditional practices to understand and address stakeholder needs. They ensure their governance documentation aligns with corporate strategy, particularly sustainability commitments. Frederik believes integrating stakeholder considerations into decision-making and governance structures is key to fostering alignment and accountability.

The three top takeaways for effective boards from our conversation are:

1. Align the strategic, strategic intent between organisation management and the board, removing terminology
2. Remove the words sustainability and ESG and consider these as global issues, systemic risks, and opportunities.
3. Try to forecast better and spend more time on talking and thinking about the future.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: The Boardroom Awakening – Can Corporate Governance Survive the Sustainability Reckoning? appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series

Amid global uncertainty, are boardrooms needlessly complex? Is It possible to thrive in the boardroom by keeping things simple?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Director of Better Boards, discusses being on the board with Sir John Tusa. Sir John is known to the British public as the main presenter of BBC2`s Newsnight programme for many years. He was the Managing Director of some of the most iconic media and cultural centres in the United Kingdom, like the BBC World Service and the City of London’s Barbican Art Centre. He chaired the boards of the European Union Youth Orchestra and British Architecture Trust Board, amongst others.

“The things that really make a difference are what I call the simple ones”

Sir John suggests that although being on a board involves significant challenges in an increasingly complex world, it is not necessarily complicated. He explains that the complicated aspects of board service involve fundamental duties:understanding the organisation’s legal basis, following regulatory expectations, and recognising responsibilities toward shareholders or stakeholders. These foundational responsibilities are crucial, but if board members focus solely on these procedural duties, they may be missing the full scope of their role. These regulatory and procedural tasks are necessary, he emphasises, but are only part of the board’s work. Simple, straightforward actions and values can truly make a difference, and he suggests that while these may be less complex, they hold substantial value in shaping the organisation’s success and fulfilling the board’s deeper purpose. 

“You have your skills, you have your experience, you have your commitment, and you have your time”

Sir John recommends that prospective board members reflect on their motivations for joining both a board and a particular organisation. Beyond fulfilling procedural responsibilities, what a member truly brings to a board are their unique and invaluable skills, knowledge, experience, and commitment. The skills that board members possess are often specific to the organisation or directly relevant to the board’s functions, and he sees these as essential, providing a foundational contribution to the board’s work. Knowledge provides valuable insights into the organisation’s strategic needs and can be accumulated over time and across various areas of activity. He also believes experience is a critical component, as it enables members to approach issues with a seasoned perspective.  Finally, Sir John states that commitment and time are both key. While committing time might appear simple, he acknowledges the complexity of balancing board service with other responsibilities, cautioning that if an organisation or board operates well, deeply committed members may find themselves dedicating more time than initially expected. Sir John refers to these four personal contributions as the “simple gifts”, straightforward but powerful, forming the heart of effective board service.

“The more generous you can be with your time, the better it is for the organisation, and the better it is for you as a board member”

Regarding time, Sir John also points out that when he was first invited to join the board of the English National Opera around 25 years ago, the chair, Lord Harewood, reassured him that annual board commitments would be minimal—just four meetings, an away day, and perhaps an additional gathering.  Since then, expectations have evolved significantly, and today board roles can easily demand 30 to 40 days per year. He believes that if an organisation is worthwhile and genuinely engaging, a committed board member will naturally be willing to invest the necessary time, but headhunters or those extending board invitations need to be transparent about the potential time commitment, cautioning against underestimating the dedication a meaningful board role might require. The more time and commitment one can offer, the better it is for both the organisation and the board member. Beyond contributing to the organisation, serving on a board is a learning experience that can benefit board members personally and professionally. Sir John then looks at the “human side” of board work and emphasises the importance of personal connections and clear communication among board members. He highlights that while board members don’t need to be close friends, a foundational understanding of one another is essential. He stresses that familiarity with the chair, chief executive, and executive team is critical to functioning effectively as part of the board.

“When I hear the word board pack, I almost want to reach for my bonfire”

He describes a frustration he has with the common organisational tactic where executives overload non-executive directors with extensive paperwork. In some organisations, this may be deliberate, to overwhelm non-executive board members with so much information that it becomes virtually impossible for them to thoroughly review or question it. This tactic, he argues, is a way for executives to discourage meaningful input from non-execs by drowning them in details. To counteract this, he advocates a slim board pack approach.  In his experience, successful organisations often require executives to provide only the information necessary for board members to make decisions and offer guidance. By avoiding information overload, board members can focus on making valuable contributions rather than wading through a deluge of documents because when boards are overwhelmed by unnecessary paperwork, they’re prevented from doing their actual work—meaningful oversight and strategic guidance. This excess of documentation, he asserts, hampers the board’s effectiveness and, in turn, the executive team’s accountability.

“You can only be effective if you’re not snowed under with paper”

Sir John criticises the excessive paperwork burden often imposed on boards, deeming it “absolutely ludicrous.” He argues that it is ultimately the chair’s responsibility to set limits and assert control over the volume of material the board receives. This requires common sense and good behaviour on the part of both the chair and chief executive. He believes no one can make informed decisions when bombarded with hundreds of pages. Boards function best when presented with only the major, critical questions that genuinely need attention, and an overload of documents wastes executives’ time and effectively paralyses the board, preventing meaningful discussion and decision-making.

“If you don’t know your fellow board members, you probably don’t know the executive well enough either”

Sir John emphasises the critical importance of knowing fellow board members and even the executive team well, viewing this familiarity as vital to effective board service. A disconnect among directors and executives stems largely from the overwhelming focus on paperwork and procedural accountability, which, in his view, can impede meaningful connections and decision-making. He distinguishes between accountability and responsibility. As he sees it, accountability is about meeting external expectations, essentially ticking boxes to avoid criticism from outside observers. He finds this approach superficial and instead advocates responsibility, which requires ownership of decisions and a willingness to embrace the potential risks that come with them. He believes boards should focus on sound judgment, responsible risk-taking, and facing consequences over mere compliance. He asserts that any board can tick the boxes, but authentic leadership goes beyond the boxes into what he calls the world of judgment. He argues this is ultimately a more straightforward and effective approach.

“There are no stupid questions, and there are no stupid opinions”

Sir John offers direct advice to board members who feel overwhelmed by excessive paperwork and information overload and stresses the importance of voicing concerns and setting boundaries if the volume of information prevents them from making informed contributions. In his view, board members must assert their right to receive only the relevant information they need to fulfil their roles effectively. A personal philosophy he holds is that there are no stupid questions on a board. If board members feel they lack the information needed to form opinions or make decisions, they are responsible for speaking up, and staying silent in such situations is unproductive. He believes asking questions and challenging the volume or nature of the information provided is essential to the integrity of board service.

He acknowledges that many board members find it challenging to speak up, often due to a fear of overstepping their role and appearing to dictate to the executive team, but speaking up doesn’t mean telling the executive what to do; it’s about offering observations and inviting them to consider questions they may have overlooked or avoided. He suggests that approaching board discussions with a “common sense” mindset can make the process simpler and less intimidating. He emphasises the power of straightforward questions such as “Why are we doing this?” If the executive team does not have a clear answer, it opens the door for valuable discussion. This mindset shift, he believes, can help board members overcome the intimidation of speaking up. In the end, he advises that the best way to contribute meaningfully on a board is to behave as one would in any thoughtful, everyday interaction, using the same respect, clarity, and honesty that build trust and effectiveness.

The three top takeaways from our conversation are:

1. You have the right to ask questions and to offer opinions about any subject before the board.
2. Identify concealment or evasion, and remember that a hidden problem can lead to a much worse crisis later.
3. You can’t do your job if covered with paper and sometimes deliberate evasion. Sometimes, you may have to say there’s no point in sitting on this board because I’m unable to do my job.

Remember to subscribe to the Better Boards Podcast Series so you never miss an episode. It’s available on Apple, Spotify, or Google.

To find out how you can participate in the Better Boards Podcast Series or for more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Being on the Board – Keeping it Simple appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Recently, there has been a surge on social media stating that diversity, equity, and inclusion (DEI) are bad for business.  Some of the world’s largest firms have also significantly reduced their investment in diversity and inclusion.  But what does this mean for boards that do believe diversity and inclusion are good for business? Should they change how they approach this agenda, and if so, how?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses whether DEI is bad for business with Prof Grace Lordan from the London School of Economics, Founding Director of The Inclusion Initiative, economist, and labour market skills expert.   Her research focuses on inclusive leadership, women’s progress in the workplace, the future of work, and productivity through diversity and individual success.  Grace was an expert advisor and board member of the UK government’s Skills and Productivity board and currently leads the £2 million ESRC-funded diversity and productivity from education to work (DAPEW) project.  

“What boards need to think about is how inclusive are their teams at the micro level, so that when they aggregate, we get those productivity gains”

Grace opens by considering an example – an imaginary scenario where DEI might negatively impact business.  Imagine starting a new job and meeting your team for the first time, being different in some way – perhaps gender, ethnicity, or language.  You have valuable knowledge and are excited to contribute, but you’re repeatedly interrupted or ignored when you speak up.

In this situation, you could respond in one of four ways:

• Silence: Stop speaking up and be labelled an introvert – harmful since your insights are lost.
• Dissent: Argue your point – but if the team resists, the atmosphere can become toxic, harming productivity.
• Quitting: Leave, taking your diverse perspective with you – resulting in no impact on the team.
• Conformity: Conform to the majority view to avoid conflict – leading to groupthink and stifling innovation.

These responses show how poor inclusion can make DEI detrimental to business.  However, DEI becomes beneficial if a manager fosters an inclusive environment where diverse perspectives are actively heard and valued.  For productivity gains, boards need to ensure their teams have inclusive leaders who encourage diversity and prevent conformity and groupthink.

“The biggest thing we can do is say this board doesn’t engage in consensus-based decision making”

Grace notes that it is key for boards to consider both what’s happening in the room and any member’s desire to “fit in”.  She attributes many big behavioural risk scandals to groupthink at the team level and board members aware of a potential issue but who fail to speak up because they don’t want to upset the apple cart.  These dynamics, both at the local team and board levels, are very problematic for boards.  To drive inclusive behaviours within the executive team, Grace suggests board members should focus on several strategic actions.

Firstly, move away from consensus-based decision-making, which often suppresses diverse viewpoints.  Instead, adopt a “disagree and proceed” approach, allowing decisions to advance despite dissenting opinions and encouraging a broader range of perspectives.  She advocates establishing a system to track, understand, and register dissenting opinions, performing post-mortem analysis to assess decision-making quality and whether certain perspectives are being overlooked.  Boards should cultivate an environment where robust and open debates are encouraged, welcome disagreement and will not impede the board’s progress, and foster a culture where challenging issues are addressed openly.

She advises that boards focus discussions on high-stakes and critical issues, allocating appropriate time for reflection on these and preventing minor issues from overshadowing important discussions.  Distributing discussion papers in advance and encouraging board members to submit their perspectives in writing can help avoid groupthink and ensure that a diverse range of viewpoints is considered during meetings.

“These good habits, unfortunately, haven’t necessarily infiltrated boards yet”

Behavioural changes are vital to advancing diversity, equity, and inclusion (DEI) in organisations, not only at the board level.  Grace outlines how to promote inclusive behaviours, starting with establishing clear rules for meeting hygiene.  These guidelines will ensure everyone has an opportunity to speak.  Such rules can support new or underrepresented voices because these members may find it daunting to navigate unwritten norms.  Clear guidelines reduce this uncertainty and foster a more welcoming environment.  To encourage concise contributions and various perspectives, Grace gives the example of introducing structured speaking time, allowing each person to speak for a set period with a “no interruptions” rule, after which interruptions are permitted.  This balances in-depth discussion and inclusivity, managing discussion flow and maintaining fairness.

Grace emphasises that these practices should apply across all organisational levels—including boards—to ensure that inclusive behaviours permeate throughout the organisation. This approach supports better decision-making and cultivates a more innovative and productive business environment.

“If you invest in an inclusive culture, you should see gains in the fundamentals. You definitely won’t see losses”

The relationship between diversity and business productivity is well-documented. However, Grace’s research explores the broader implications of inclusion on fundamental business metrics such as growth, innovation, patent filings, stock returns, return on equity, and return on assets.  She and her colleagues gathered extensive data on listed companies in the UK and US, with sources including employee reviews to gauge internal perceptions of inclusion.  This feedback allowed them to develop a comprehensive measure of inclusion, and the research established a clear, positive relationship between inclusion and long-term business outcomes.  Interestingly, diversity alone showed gains only after reaching critical mass; however, when inclusion is paired with diversity, the need for a high critical mass diminishes.  Put simply, inclusion amplifies the impact of existing diversity.  Investing in inclusive practices fosters a positive work environment and drives innovation and growth, proving beneficial in the long run.

“Millions and millions of pounds are wasted each year on diversity equity and inclusion initiatives”

Grace notes that to realise productivity gains, board members must prioritise fostering a culture of inclusion, where diversity is genuinely valued and diverse talents are not pressured into conformity.  Diversity should enhance creativity and innovation rather than lead to groupthink.  Investing in inclusive leadership is also crucial.  Developing and supporting leaders who actively promote inclusive behaviours creates environments where all voices are heard and diverse perspectives valued.  Measuring and rewarding inclusive behaviours is also essential, as is evaluating the return on investment (ROI) of inclusion efforts.  Monitoring the ROI by linking inclusion to key business outcomes like innovation, stock returns, and overall financial performance helps gauge the effectiveness of inclusion initiatives.  Grace also notes that integrating DEI initiatives (rather than outsourcing them to consultants or confining them to the HR department) ensures they influence all levels of decision-making.  By focusing on these actions, board members can ensure that the investment in inclusive practices translates into tangible productivity gains and long-term business success.

The three top takeaways from our conversation are:

1. Integrate inclusion with diversity: Ensure that diversity and inclusion strategies are embedded within the business itself, not confined to HR or external consultants.
2. Audit and enhance boardroom voice: Boards must pay attention to who has a voice in discussions, ensuring sufficient cognitive diversity. Regularly audit and adjust the composition to foster robust, diverse debates.
3. View DEI as a long-term strategy: Treat DEI as a long-term investment, particularly valuable for companies focused on growth and innovation. Prioritise creating a culture where team members feel comfortable challenging each other, driving real business gains.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Is Diversity, Equity & Inclusion Bad for Business? appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Every country has its fair share of corporate failures. Afterwards, It is easy to point towards governance. Reflection and learning are essential. In this podcast, you hear from someone with a critical governance role In Germany. You hear about the issues discussed and gain insights into the perspectives of someone who hears daily from all players in the market – regulators, state officials, top managers, board members, the media and the general public. You benefit from the insights and learnings and can draw conclusions for your own context.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses current trends in German Corporate Governance with Dr. Cordula Heldt, Head of Corporate Governance and Company Law at Deutsches Aktieninstitut, which represents the interests of publicly traded companies, banks, stock exchanges and investors.  She is also Head of the Secretariat to the Commission on the German Corporate Governance Code (Regierungskommission Deutscher Corporate Governance Kodex).  She has a doctorate in Law from the Johann Wolfgang Goethe University in Frankfurt and has authored numerous expert articles in legal literature.

“Every declaration that you have to do is actually about nudging boards to do the work”

Cordula opens with Germany’s recent significant corporate failures, notably the Wirecard scandal, which led to new regulations concerning corporate governance.  Following the Wirecard case, German lawmakers introduced stricter requirements for risk management, internal control systems, and auditor regulations.  While many companies already had corporate governance frameworks in place, she warns that the updated code now emphasises that management must report on the key features of their entire internal control and risk management systems—not just those related to financial reporting.  Additionally, the management board is now expected to comment on the appropriateness and effectiveness of these systems.

Cordula notes that this shift aligns with similar trends in the UK, where the government updated its corporate governance code to restore trust in audit and corporate governance after several high-profile failures.  The UK code now requires boards to describe in their annual reports how they have monitored and reviewed the effectiveness of their control frameworks and also to declare the effectiveness of their material controls.  In both Germany and the UK, companies have expressed concerns regarding this, often comparing these measures to the burdensome requirements of the Sarbanes-Oxley Act in the United States.

“Every declaration that you have to do is actually about nudging boards to do the work”

However, despite the complaints about the administrative burden, Cordula believes the value of these declarations lies in their ability to nudge boards into taking their responsibilities seriously.  By requiring formal declarations, boards are compelled to examine their risk management and internal control systems closely – and this scrutiny is not only limited to financial reporting but extends to the entire governance framework.  The intent is to ensure that supervisory board members ask the right questions and engage more deeply with these systems.  This focus on accountability represents a growing trend in corporate governance and regulation.

Of course, Cordula accepts that directors might not appreciate being nudged, as it can feel intrusive or unnecessary.  However, nudging is often seen as a less burdensome alternative to strict regulation, allowing directors some flexibility in achieving the desired outcomes.  In the context of EU sustainability regulations, for example, nudging encourages companies to take meaningful actions without being overly prescriptive, pushing them to report positively on sustainability efforts.  For investors, understanding that some code recommendations are designed to nudge management and directors toward better practices can help bridge the expectation gap.  She explains that these recommendations aim to prompt directors to take a closer look at governance processes, improving board work and corporate governance.

Cordula uses the example of the skills matrix. While the code recommends having a skills matrix, it doesn’t mandate that each skill be attributed to specific individuals, though doing so makes sense.  Investors often criticise boards where every member is claimed to be an expert in all areas.  This stems partly from legal implications, particularly in Germany, where courts require supervisory board members to have the basic knowledge and skills to assess business transactions independently.  She notes that directors may be reluctant to highlight gaps in their expertise on a skills matrix, fearing it could be interpreted as a lack of competence.  However, investors expect boards to be transparent about where real expertise lies, especially in areas like cybersecurity. Cordula believes the challenge is balancing these expectations with the practical realities of board composition.

“As a board chair, you’re looking for people that you can propose to the board and the general meeting that can fill the whole seat”

One effective approach some companies adopt, which Cordula notes, is reporting on the different levels of expertise within the board.  This means acknowledging that not every board member starts with the same level of knowledge, especially in specialised areas.  For example, a new audit committee member will have different skills than someone who has been in the role for several years.  By reporting these varying levels of expertise transparently, companies can better reflect the reality of their boards’ capabilities and provide a clearer picture of where development is needed.  She believes this trend toward acknowledging and communicating different expertise levels is practical and supports more effective board development and governance.

Cordula explains that as a board chair, you seek individuals who can “fill the whole seat,” meaning they must possess the fundamental skills to handle a wide array of business matters.  Specialising too narrowly could be limiting, as boards require diverse expertise to cover all necessary areas, from finance to strategy to governance.  However, she also notes that building additional knowledge in one or two areas can be beneficial, especially if you can demonstrate how this knowledge complements the broader needs of the board.  The key is to ensure you have a solid foundation in general governance while also being able to offer specialised insights that can enhance the board’s overall effectiveness.  Therefore, when selecting candidates for a board, she recommends that although it is natural to seek individuals who possess the specific skills you need, it is also crucial that the board ensures all members (including those with specialised expertise) continue to develop their knowledge across all relevant areas, which can be facilitated through organised internal or external training events.  These training sessions help in skill-building and allow board members to understand each other better, fostering stronger collaboration.

“Of course, they think it’s burdensome, but everybody knows the alternative is regulation”

Cordula advises bringing directors and policymakers closer together to create better boards.  She also understands that while directors generally support the code, they often find it burdensome, although they recognise that the alternative – more stringent regulation – could be worse.  She explains that one approach that has been effective (at least in Germany) is the practice of direct engagement, as Clara Christina Streit, the new chair of the German Code Commission, has implemented.  She started her tenure with a “listening tour,” meeting with CEOs and supervisory board chairs to gather their thoughts on the corporate governance code.  One key piece of feedback Clara received was the desire for more principle-based recommendations in the code.  Directors appreciate the flexibility principle-based guidelines offer, allowing companies to comply in ways that best suit their unique circumstances.  This ongoing dialogue between policymakers and directors is crucial, as it ensures that governance standards are both effective and practical, allowing boards to fulfil their responsibilities in a way that aligns with their company’s needs.  Clara plans to continue these discussions, highlighting the importance of continuous, open communication in shaping governance practices that work for everyone involved.

“Being a board member is not a fun thing”

Cordula believes that the ideal board member possesses a blend of key attributes.  First, they need strong managerial skills, especially in understanding and consulting on strategy, markets, and operations.  Although supervisory boards, like those in Germany, do not directly make strategy, they must grasp it fully to provide effective oversight and input, particularly when it comes to setting targets for remuneration systems.  Beyond these foundational skills, she advises that an ideal board member must continuously develop expertise in emerging areas such as ESG and sustainability reporting, especially if they serve on the audit committee, which is increasingly tasked with overseeing non-financial reporting.  Cybersecurity is another critical area where board members need a basic understanding to ensure management adequately protects the company from cyber threats.  She feels it is equally important to be a team player because while the focus in recent years has been on compliance and diversity – both crucial elements – it is also vital that board members see themselves as part of a cohesive team.  Studies show that individuals are more likely to be critical and voice concerns when they feel like part of a team rather than outsiders, and so this sense of belonging fosters better collaboration and more effective governance.  Therefore, she advises that boards should not only focus on diversity and compliance but also on building a strong team dynamic, where each member has a role and feels empowered to ask the right questions.

Cordula closes by noting that the code encourages boards to assess their effectiveness continuously. The key is that companies should conduct these internal or external evaluations and reflect on the results and plan.  Despite these recommendations, there is often a reluctance to embrace new evaluation processes, which might stem from past experiences where internal evaluations were ineffective or external evaluations fell short of expectations.  This is a developing issue, and while boards understand the importance of evaluating their effectiveness, achieving meaningful improvement can be challenging. Cordula feels the uncertainty around whether these evaluations improve the board might contribute to scepticism.  Policymakers can help by emphasising the value of these evaluations and ensuring that the internal or external process is seen as a tool for genuine improvement rather than just a compliance exercise.  Encouraging boards to approach these evaluations with an open mind and a commitment to continuous development is crucial for fostering more effective governance.

The three top takeaways from our conversation are:

1. Familiarise yourself with the ongoing governance debates in Germany and the UK, focusing on principle-based and effective governance. This will help you better navigate and meet reporting expectations in different regions.
2. Be aware of the potential expectation gaps in corporate reporting, particularly in Germany and the UK. Understanding these gaps can help you align reporting practices with expectations of stakeholders and regulators.
3. Consider the board a cohesive team that must work together to ask the right questions and prevent governance failures. Focus on building a collaborative and proactive board culture to strengthen overall effectiveness.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Insights into the German Corporate Governance Debate – Learnings, Changes and Implications for Directors appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Corporate Governance Codes worldwide state that an internal board evaluation shall be conducted in years one and two after a fully facilitated external evaluation.  It is one of those tasks on a Company Secretariat’s calendar that has to be done.  But how?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses mastering internal board evaluation with Chloe Barry. Chloe is Group Company Secretary at Kingfisher, an FTSE100 organisation and owner of B&Q and Screwfix, among other DIY brands.  Chloe started her company secretarial career at PWC in both London and Jersey and since then has held roles at leading FTSE 100 companies, including BG Group up to its acquisition by Royal Dutch Shell, Centrica, Intercontinental Hotels Group and Electrocomponents, and most recently Sophos Group plc, a FTSE 250 company.

“I’m fortunate to have moved from one engaged chair to another”

Chloe starts by explaining her board evaluation process, with the next one planned for the autumn, which will be conducted internally.  She outlined how this is notable for two reasons: it is the first led by the new board chair, appointed in June, who has been a board member for nearly six years.  Chloe is excited to work with them on what she is certain is a robust process.  Secondly, they will use most of last year’s question set, allowing them to measure progress compared to the previous year clearly.  To stay focused on identified actions, they intend to introduce a new, short section at the end to measure performance against them.

“We want the directors to leave the process feeling assured that they have identified the appropriate actions”

Board evaluations can be seen as unnecessary and time-consuming, Chloe admits, especially for large boards or those with many committees.  However, her experience with engaged boards and directors shows they often do appreciate the process.  Despite the time it takes, directors recognise that meaningful participation enhances the quality of subsequent reporting and discussions, and by engaging honestly, sharing views on potential obstacles can significantly improve board effectiveness.  In her opinion, a good evaluation process is measured by the practical actions it identifies for improvement.  It provides a valuable gauge of director sentiment and engagement for chairs, helping assess board effectiveness compared to the previous year.  The process also allows directors to review the past year and give feedback, with reporting allowing detailed reflection on influencing factors.  She believes that directors, often experienced with multiple evaluations, need reports that are insightful, easy to digest, and highlight key trends and themes, ensuring they identify actions that will enhance board effectiveness.

“Perhaps counterintuitively, my starting point is always to look back and reflect on the previous few years’ reviews”

To prepare for an internal evaluation, Chloe explains that she starts by reflecting on past reviews, considering the format, tone, actions set in the previous year, and feedback from directors.  She also accounts for any immediate changes that have occurred.  This helps her decide on the type of review to propose, whether internal or external and if it aligns with their three-year cycle.  She considers if the approach should change, for example, whether it needs to be lighter, more targeted, or consistent for comparison.  If changing the mechanism or provider, she will always create a shortlist, benchmark with peers, and possibly conduct a full tender.  She explains that while board evaluations, particularly internal ones, can take almost any form – verbal, paper or online – the most important thing is to ensure that you are evolving and improving in all respects, both in the overall board effectiveness and individual director experience.

“You need to be honest with your chair”

Chloe emphasises that honesty with your chair about past successes and areas for improvement is essential when making proposals.  Also, communication is vital, especially when introducing new approaches or platforms.  She relates that she introduced Better Boards for their interim evaluation to focus on peer reviews last year, given the directors’ established relationships.  Considerations included various factors such as the new platform, question set, reporting format, timetable, and communication plan.   They communicated early with directors and allowed more time for the evaluation to ensure they could acclimatise and engage with the process.  In her regular company secretary reports to the board, she included details about the proposed timetable and structure for the upcoming board effectiveness review.  She informed them about the new platform, the change of tone, and the increasing focus on peer reviews. She reassured them they had added extra time to the timetable to familiarise themselves with the platform and complete the surveys.  The most positive feedback from last year’s review was about the insightful peer review section.  She stresses that while it means that directors have to invest a bit more time, it offers personalised feedback from respected peers compared to their self-assessments.  This can be empowering, revealing strengths directors might not have recognised.  The peer review tool is powerful, allowing measurement of progress with the same questions annually or tailoring to focus on current board priorities. Combining both approaches can be incredibly effective.

The three top takeaways from our conversation are:

1. Learn from past evaluations by reviewing agreed actions, feedback, and the process. Show directors you are improving the experience to maintain their engagement.  Build in sufficient time and be prepared to adapt.  With the chair, agree on the tone, provider, question set, timetable, communication plan, and reporting.
2. Inform and engage individual directors early about the process and any new provider, and ensure they complete the evaluation.
3. Test the survey, whether homegrown or external and ask others to do the same. This checks for clarity, insightfulness, and practical usability, ensuring the platform works well with your company’s technology.  A thoughtful process leads to more engaged directors and valuable insights.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Mastering Internal Board Evaluation appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Many Directors have positive intentions to leverage the experiences gained throughout their careers, support executives, and discuss the big picture in the boardroom. But many become quickly disillusioned, stuck in detail, ticking off boxes and agenda items rather than supporting executives and helping the organisation to make a real mark. So, what can Directors do to spot and support people with big ideas? What does a boardroom look like in an organisation where people can develop ideas, innovate and thrive? 

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner, talks with Sir John Tusa, known to the British public as the main presenter of BBC2’s Newsnight programme. He was Managing Director of some of the most iconic media and cultural centres in the United Kingdom, such as the BBC World Service and the City of London’s Barbican Arts Centre. He chaired the boards of the European Union Youth Orchestra, University of the Arts London and Wigmore Hall. His latest book, “Bright Sparks – How Creativity and Innovation Can Inspire Business Success”, examines 7 case studies of creative innovation against the odds and the board’s role in their success. “Bright Sparks” is short-listed for the Business Book of the Year Award.  

“We are here to help to make the organisation a better, more creative place”

Sir John began by observing that a board that is too formal and strictly adheres to rules can stifle creativity. While it is important to follow regulations, boards that only focus on minutes and compliance miss the mark. He advises that boards should focus on fostering innovation, embracing new ideas and striving to make the organisation more dynamic and creative. Unfortunately, many boards seem afraid to take this approach, but he believes it is crucial for organisational growth and board effectiveness. Boards need to support executives in their creative efforts.

“The practice of constant accountability prevents people from having ideas”

Sir John explains that it presents a missed opportunity if a board does not make time for innovation. In effect, the chair and the board run their own business, so they may choose to be bogged down by minutiae. To avoid this, boards should ask if they focus more on responsibility or accountability. He believes accountability often means constantly proving compliance to external parties, while responsibility involves making decisions and owning the outcomes, good or bad. This is how excessive focus on accountability stifles creativity. Boards should, therefore, prioritise responsibility, embrace new ideas, and be willing to accept the consequences of their decisions. 

“These people are extraordinary because they have what you might call all the short-term instincts, but also the long-term capacity”

Sir John gives examples from art, culture, and media – remarkable initiatives such as the creation of a Shakespeare Theatre in Gdansk, Poland, and Rory Stewart’s foundation to rebuild Kabul’s historic quarter and revive its arts sector. He also gives another example of a woman who founded the European Union Youth Orchestra despite widespread scepticism. These innovators each had a bold idea and the determination to pursue it. Still, crucially, they also realised they needed boards to sustain their organisations long-term. These boards provided a balance of risk management and support, preserving the original vision and sometimes even defying regulations to ensure success. 

He explains that these innovators are exceptional individuals – stubborn and egotistic, yet selfless in their dedication to their organisations. They combine a strong sense of their worth with a selfless commitment to their cause. They also exhibit extraordinary loyalty to their staff, which is then reciprocated. But despite their big visions, such as creating a European Youth Orchestra or restoring old Kabul, they are also incredibly practical. Rory Stewart, for example, personally navigated the rubble of Kabul to drive progress. The European Union Youth Orchestra founder, Joy Briar, meticulously attended to every detail. Their success hinges on a mix of vision, practicality, determination, and patience. Rory Stewart spent six years in Kabul, Yogi Limon took 15 years to build the theatre in Gdansk, and Joy Briar needed about ten years for the orchestra.  

“Large organisations have bad habits”

Large organisations often struggle with fostering innovation in Sir John’s experience, and when these organisations aim to be more creative, they typically establish a “creative hub” within the existing structure. However, this approach is almost guaranteed to fail because the hub remains constrained by the organisation’s rules.  There is no effective management strategy to “create” innovation within a rigid structure, and simply designating a part of the organisation as the “creative” section is not enough either. It is clear that a new approach is needed to unlock innovative potential and succeed; organisations must embrace the uncertainty and potential chaos that come with genuine creativity and risk-taking. For a large organisation to truly innovate, it must create spaces where normal rules do not apply, allowing ideas to flourish. Sir John accepts that this approach is risky, but it is also necessary for real innovation and a challenge that remains largely unresolved in highly structured institutions. Success within these organisations usually comes from adhering to established norms, not challenging them, whereas true innovation often requires someone to say, “Here’s a new idea; it’s different, but it could be big.” In his opinion, adopting a mindset that values originality and being open to surprises is crucial, and encouraging this attitude can help organisations embrace and nurture external innovations effectively.

“Give yourself permission on a board not to be tied down by rule”

Sir John wishes boardrooms would handle routine business swiftly, perhaps within the first half-hour, and then dedicate the rest/bulk of the time to discussing big ideas. These discussions do not always need conclusions, but they do require an open-minded approach, and the chair and chief executive must foster this creative environment. Board members are not there just for their specific skills; they are there as whole individuals with a range of ideas, and he suggests that many people find board meetings boring because they are not allowed to be creative. Yet every board member is equal and should feel free to contribute unique perspectives. Boards should worry less about strict compliance and more about creating a free atmosphere where ideas can flourish. This approach can redefine the organisation as one driven by ideas rather than just compliance, so boards must permit themselves not to be constrained by rules.

“It’s vital that boards should spend time together”

Sir John explains how essential it is to harness the ideas of the entire board, and a vital aspect of this role is maintaining a close relationship with the Chief Executive. He gives the example of the University of the Arts in London, where he would always communicate his thoughts to the Vice Chancellor first, who did the same. This ensured transparency and trust, and this mutual respect created a strong, effective partnership for seven to eight years. If issues arose, they addressed them directly, maintaining confidence in one another. This openness extended to the board, fostering a culture of fairness and candid communication.  

“Why do people behave in such a boring way on boards?”

Spending time together outside formal meetings, as Sir John experienced on an American board, can significantly improve board dynamics because boards need to be enjoyable spaces. So, as chair, focus on creating an open, fun, and collaborative environment while ensuring that the board members feel valued and heard. This will foster an atmosphere where innovative ideas can thrive. He describes how social interaction was valued at the University of the Arts, which helped people know each other as individuals, experts, and people with ideas. He believes that spending time together, both inside and outside the boardroom, is also crucial for building trust. Trust is not built by simply reading minutes, following regulations, and meeting compliance demands because while these are important, they should be taken as a given. But board effectiveness relies on how people interact, so you cannot bring your best to an organisation if you are bored or feel you cannot express your true thoughts. In Sir John’s view, rule one for any board is to be interesting and enjoyable.  Without enjoyment and engagement, a board will never foster creativity and innovation. So, prioritise making the board a space where members can connect and share ideas freely.  This will lead to a more dynamic, effective, and innovative board.

“You won’t do it just by being stuck in the mud and saying, ‘We’re observing the rules’”

Sir John concludes by pointing out that as an individual non-executive director or trustee, you have the power to influence and contribute to creating a vibrant board atmosphere, even if the chair is not taking the lead. He suggests that boards thrive when members feel valued, heard, and motivated to contribute their best. You can help unleash its full potential for creativity, innovation, and impact by advocating for a more open and engaging board environment.

The three top takeaways for effective boards from our conversation are:

1. Remember that a board is there to help create and sustain a vision. The vision comes from the chief executive, but the board can contribute to that and needs to be forward-looking.
2. Consider whether everybody contributes equally and is allowed to contribute.
3. Be very careful how you deal with objectives. People think something has been done because they’ve achieved the objective, but this might not mean value is added.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: How to Get Creativity and Innovation into the Boardroom appeared first on The European Business Review.

With the fast-paced democratisation of AI and advanced analytics, problem-solving will be commoditized (even for complex challenges). As C-suite and board members gain awareness of the possibilities and power of AI and analytics, an almost unlimited array of potential projects, questions, or scenarios where analytics could improve outcomes arises. The challenge is how to prioritize the various opportunities, ensuring they align with company goals.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, engages in a discussion about the use of AI and advanced analytics to deliver substantial value in the boardroom with Professor Bernardo Almada-Lobo, co-author of The Analytics Sandwich: Bringing People and Artificial Intelligence Together to Unlock Business Value. Professor Almada-Lobo, a distinguished faculty member of engineering and business at the University of Porto, and co-founder and partner of LTPlabs, an advanced analytics and AI consultancy, brings his extensive experience to the table. His background as a former researcher at the MIT Sloan School of Management and a former Board member of INES TEC, coupled with his certification as a Certified Analytics Professional (CAP) and a Ph.D. in Industrial Engineering and Management, ensures that the insights shared are of the highest quality.

“If you really want advanced analytics and AI to deliver game-changing value, the secret sauce is to approach it with short, laser-focused projects”

Bernardo explains that organizations often take two ineffective approaches to AI and analytics, leading to predictable and disappointing outcomes. They either embark on a massive analytics project, or different teams initiate numerous mini projects driven by personal curiosity or bias. He underscores the need for a strategic, business-led approach, focusing on short, laser-focused, collectively agreed upon projects that are directly tied to strategy. This approach, when integrated into strategic planning and aligned with company goals, ensures faster, more relevant, actionable outcomes and prevents project failures, providing a roadmap for success.

“Using AI and advanced analytics tools is no different from any other tools that we employ in business”

Bernardo has found a quirk in working with global companies: CEOs and C-suite leaders are eager to use AI for operational efficiencies or redesigning supply chains but hesitant to use it for decision-making. He believes this reluctance may stem from a fear of losing the perceived omniscience that leaders often feel is expected of them. However, advanced analytics rarely identifies a single “best” solution; it expands the solution space, offering multiple options. Business experts can then evaluate these options against strategic goals and constraints. Like any business tool, AI tools are meant to assist, not replace, leaders, helping them make more informed decisions.

“This technology has the potential to affect every industry and every function of a company”

Bernardo believes that one of the greatest advantages of this technology is its potential ability to impact every industry and company, from strategy and finance to sales, marketing, and operations. Thus, boards must understand the opportunities and disruptions AI, generative AI, and advanced analytics present. This awareness helps avoid two common pitfalls. The first pitfall is that boards may demand AI projects in a push analytics approach without organizational alignment, focusing on available data rather than the problems or opportunities needing solutions. Second, management teams may move faster on opportunities than their boards are prepared for. Therefore, Bernardo advises: make sure advanced analytics is decision-driven to guarantee the right questions are answered. Organizing ideas into a value tree helps break down main objectives into business value drivers and related KPIs, which AI and advanced analytics can address. The key is to anchor analytics on decision to be made rather than available data, shifting from push-to-pull analytics.

Despite the transformative potential of AI, only a small minority of organizations are reaping its profound benefits. Bernardo believes that the gap between AI’s promise and its actual business impact is mainly due to people and process issues rather than technology. To make a tangible impact, the process must be problem-centric. This means identifying key business challenges and opportunities that align with the strategic vision. Only then should analytics and data framing be brought in. This pull analytics approach is more effective than the traditional push analytics.

“By integrating AI and advanced analytics, boards can enhance their effectiveness, make more informed decisions, and drive organisational success”

Bernardo explains that looking at the responsibilities of any board (strategic planning, risk oversight, and stakeholder concerns), integrating AI and advanced analytics can significantly enhance their effectiveness, inform decision-making, and drive organizational success. He lists several strategies boards can use, categorized by their focus on effectiveness, efficiency, or people-related concerns.

1. Effectiveness-Oriented Strategies:

• Data-Driven Decision Making: using AI to analyze large data sets and generate insights for informed decisions. This includes evaluating market trends, financial performance, and risk assessments using data from internal sources, global news, political developments, social media, industry reports, and competitive strategies.
• Risk Management: Implementing AI to monitor and predict potential risks by identifying and quantifying external drivers of uncertainty. Analyzing patterns and anomalies helps boards mitigate risks effectively.
• Strategic Planning: Utilising predictive analytics and AI to create future scenarios and strategies, aiding in long-term planning. This includes questioning critical assumptions about customers, technologies, and competitors, free from human biases.

2. Efficiency-Oriented Strategies:

• Performance Monitoring: Leveraging AI to track and evaluate organizational performance in real-time, benchmarking against best practices, identifying KPIs, and highlighting areas needing attention.
• Efficient Reporting: – Automating data collection and analysis for board reports, reducing time and effort while ensuring accuracy.

3. People-Related Strategies:

• Improved Governance: Using AI tools to enhance governance practices by automating compliance checks, monitoring regulatory changes, and ensuring adherence to corporate policies.

By incorporating these strategies, boards can promote data-driven decision-making, proactive risk management, and effective strategic planning, all while improving efficiency and governance.

“Any director who fails to integrate AI into their work and decision-making process in the near future will not be allowed to serve on the board”

Bernardo warns that to apply AI effectively, boards need to assess their composition, ensuring members are diverse and qualified to address current gaps. Board members should possess basic AI literacy, which will become a standard requirement. They should ask themselves if they can leverage AI to provide strategic support. Beyond strategic planning and talent management, AI can also benefit from risk management, performance monitoring, efficient reporting, and stakeholder engagement. Integrating AI into these areas can further enhance board effectiveness and organizational success.

“Analytics is not a substitute for people. It’s a support, a way that we have to harness their knowledge and combine that knowledge with state-of-the-art AI and machine capability to augment, instead of replacing”

Bernardo gives a list of tips for the C-Suite on AI Integration.

1. Walk the Talk. Evaluate capabilities and ensure your organization has the necessary talent, culture, and capabilities to embrace the changes AI requires. Lead by example, with the board actively engaging in and supporting AI initiatives, fostering a culture that values data-driven decision-making over intuition. Also, invest in talent, recruiting and developing talent skilled in AI and ensuring ongoing training to keep pace with technological advancements.
2. Align AI and Advanced Analytics with Business Objectives and Culture. Have a strategic vision and prioritize identifying key business challenges and opportunities where AI and analytics can make a tangible impact. Avoid engaging in interesting but not impactful projects. Develop a problem-centric approach, focusing on solving real business problems and addressing specific business needs rather than implementing AI for the sake of technology. Also, AI initiatives should be aligned with the organizational culture to facilitate smooth adoption and integration. This includes fostering a mindset that values data-driven insights and experimentation.
3. Combine People and Analytics. Leverage human expertise. Recognize that people in your organization have valuable insights and contextual knowledge crucial for effective decision-making. Use AI to augment, not replace, this expertise. Foster collaboration and relationships where people learn from AI, AI learns from people, and the organization learns and adapts. Enhance decision-making using AI to provide data-driven insights, freeing employees to focus on strategic and creative tasks. 

“I don’t believe that AI will replace corporate boards, neither now nor in the distant future”

Bernardo points out that one advantage of AI, generative AI, and advanced analytics is their potential to transfer successful use cases across companies and industries.  Non-executive board members, who often bring diverse experiences from various sectors, can leverage these technologies to challenge management with pertinent questions. He explains that generative AI can help non-executive board members prepare for meetings more efficiently. Instead of reading lengthy reports, AI can summarize key insights, highlight differences from previous reports, and identify significant business challenges. It can also benchmark reports against competitors using internal and external data sources. AI-powered assistants can provide instant answers, enabling board members to ask more informed questions in real-time.  

Bernardo concludes that while AI will not replace corporate boards now or in the future, it can work in tandem with them. Combining AI’s analytical power with the intuition, management wisdom, and experience of human board members will lead to more effective governance.

The three top takeaways from our conversation are:

1. Any director who fails to integrate AI into their work and decision-making process in the near future will not be allowed to serve on the board. Minimum literacy on the subject will be mandatory.
2. AI will not entirely replace human decision-makers in complex decisions. Instead, it will complement human experience and judgement, and this overall decision-making process will be enhanced by having people and analytics together (the two slices of the analytics sandwich).
3. AI and advanced analytics only deliver value when problem-centric. If you want to do pull analytics, you need high C-suite maturity and sophistication.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: AI and Advanced Analytics – Delivering Value for Directors and the Board appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Managing an ever-growing agenda, Company Secretaries today face a plethora of issues that can pull their focus in countless directions. It’s truly challenging to work effectively with the board and keep on top of the ever-changing economic, technological, and regulatory landscape. So, how can Company Secretaries maintain clarity and focus amidst their expanding responsibilities?

In this podcast, Dr. Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses mastering the company secretariat with Jason Wright, Society Secretary at Nationwide. Appointed in March 2021, with over 25 years’ experience in banking and financial services, Jason has previously worked for Royal Bank of Canada, Santander, and Barclays. As a Company Secretary, Jason has supported Chairs with board succession, board skills assessments, board composition, and building and running high-performing secretariat teams. He considers his primary role to be supporting the board and ensuring his directors have the best quality information and environment to make the best decisions.

“If you do the small things perfectly, you’ll be trusted to do the big things”

Jason, a self-proclaimed perfectionist, believes in the power of attention to detail. He likes to have plenty of reassurance that anything he or his team is responsible for will be done “just so” and delivered as expected. To prevent surprises, especially around board meeting days, annual events, and the annual reporting, he carefully monitors moving parts and what’s going on with various projects, checking and re-checking. This meticulous approach helps him feel on top of things, and crosschecking to ensure he’s prepared helps build trust in his position. Jason believes getting the small stuff right wins trust for involvement in bigger tasks.

“You have to give the impression of being the calm, serene swan on the river paddling upstream. But actually, below the surface, your legs are going like crazy, just to stay still sometimes”

The sheer volume of materials and regulations that board secretaries manage is incredible and growing more extensive and complex. Jason likes to look ahead at the next year as he’s planning to help manage agendas for each board session and event. He tries to get ahead of where there’s a time constraint or pending conflicts between committee schedules or support needs. While financial services groups like his face abundant complexity, he knows other company secretaries face the same challenges.

Every board cycle, Jason realises there will be a challenge in giving each board member, committee, and stakeholder the time they want. His role in enabling board effectiveness is to gently coach and influence executives around what non-executive directors expect regarding paper length, detail, clarity, and presentation time. He also evaluates incoming items in terms of what the board needs to approve, strictly speaking, as opposed to what the board might like time to discuss and build awareness about without needing to make a motion. He notes that building good relationships with each board member helps immensely with finding this balance.

“It’s a lot, a lot of preparation”

Jason is keen for his team to sit down and discuss the agendas for each board cycle. They look for items appearing in multiple committees or multiple meeting plans to remove duplication and place things in the most effective spot for resolution. He also looks at the structure of the agenda. His current Chair wants each board meeting to have a strategic, operational, and socially minded agenda item, which gives Jason a structure and framework to work around as he builds agendas.

Papers are another issue that is being addressed in preparation. They have historically been good but lengthy. Now, Jason is using a new tool, Lucia, which uses question-derived insights to help frame papers. He feels it has helped with both length and setting expectations for the board about what will be discussed or decided, with positive feedback on the implementation over the last few board cycles.

“You need to understand the Directors, to help the Chairman help them bring the best of themselves to the meetings”

To help his board work effectively, Jason makes himself available during board cycles. He makes a point of connecting with each Director, checking on their needs, seeking feedback, and listening. This creates a positive relationship and gives him a better sense of what each Director likes, dislikes, prefers and needs for the meetings.

In meetings, Jason sits next to his Chairman, helping flex the agenda as it flows to allow for extended discussions, things resolving more quickly, or other day-of changes. He keeps team members outside the meeting to help welcome and manage board guests. As meetings wrap up, he has agenda-free dinners arranged so board members can deepen their connections to each other, which also helps with the board’s ongoing strong functioning.

“What you have to do, first of all, is prove to them that you’ve got something to add”

Jason has worked to achieve his relationships and influence by showing that he could make a positive difference in the board’s effectiveness and accomplishments. He actively looks for places where he can anticipate a need or remove a burdensome task for a Director or his Chairman. For example, when he was first at Nationwide, he helped his previous Chairman move succession planning from something kept personally by the Chairman to an official, written board succession plan suitable for use with regulators. This project showed that Jason was a value-add, and from there, he continues to be included in more tasks and with more planning. Now, he leans on his team for day-to-day practicalities and focuses more on thinking and planning aspects of the Secretary’s role.

The three top takeaways for effective boards are:

1. It’s essential that you enjoy the role. It’s a privilege to be at the table where the big calls get made, so you need to enjoy it.
2. You need to know your place. You’re there to serve and support the board. Focus on that with laser vision, and you can’t really go wrong.
3. Nail the smaller details, and then you’ll be invited to have fun doing the big stuff.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Mastering the Company Secretariat appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Managing an ever-growing agenda, boards today face a plethora of issues that can pull their focus in countless directions. It’s a careful act of juggling responsibilities and steering through a tide of economic, technological, and regulatory challenges while holding onto the guiding star of long-term success. How can boards maintain clarity and focus amidst their expanding scope of responsibilities, especially when it comes to the critical area of sustainability?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner, discusses this issue with Andrew Hobbs from EY’s Center for Board Matters, where he has spent over 20 years in various roles. Most recently, he took on leadership for the EY Center for Board Matters across Europe, the Middle East, India and Africa (EMEIA) while continuing to serve in his role as EMEIA Public Policy leader, where he meets boards and audit committees of companies of all sizes, discussing regulatory change and corporate governance. He is Chair of the Corporate Governance Working Group of the European Contact Group, Vice-Chair of the Corporate Governance Policy Group of Accountancy Europe, and the author of the annual EY EMEIA Board Priorities report.

“I can confidently say GenAI is redefining business efficiencies and innovation”

Andrew thinks boards need to infuse their organisations with the right tech skills and foster a culture that’s eager to leverage AI’s full potential. Turning AI chatter into meaningful outcomes is challenging. Veryfing GenAI tools are applied within the right contexts and properly integrated with existing systems is key to adding actual value.

Ensuring responsible AI integration is not just a priority; it’s a necessity. As GenAI advances, the threat landscape evolves, particularly around sophisticated cyberattacks. Boards need to proactively address these risks, making them a part of the agenda, to stay ahead of potential pitfalls. This responsible approach to AI integration will reassure stakeholders about the ethical considerations and the commitment to long-term success.

Of course, this must be done in the evolving regulatory landscape. Andrew believes that the boards need to keep an eye on imminent regulations, such as the AI Act in the EU. Companies rely on their boards to help them prepare for and adapt to new legal standards governing AI usage. So, boards should navigate these areas strategically, yet cautiously, enabling GenAI to drive innovation securely and ethically.

“Boards have been spending more time on workforce-related topics for the last couple of years than they have in a long time, and they don’t expect that to change anytime soon”

Andrew hears fresh urgency about human capital, skill gaps, and the employee value proposition in his conversations with boards. The present situation with AI, DEI, and the global economic climate means boards are under renewed pressure to provide governance and guidance.

To Andrew, boards must be proactive in facing the skills shortage while still emphasising DEI. This means boards must work with management to robustly map out the organisation’s skills inventory against future requirements, pinpointing gaps, especially in regions or functions most affected by skill gaps.

A clear strategy for developing future leaders is critical, but detailed data on recruitment, turnover, and insights from exit interviews must support it. Andrew feels boards can use these to strengthen the employer brand, and understanding why talent leaves is critical to enhancing retention strategies.

Lastly, boards should ensure that the hybrid working models support DEI objectives and help the company remain competitive. This takes on added significance as companies compete for a limited pool of diverse talents. Boards need to help management see how to express the employee value proposition best and must challenge management on plans for reskilling or upskilling existing staff versus bringing in outside talent or new tech tools. This ensures company strategies align with current business goals, DEI principles, and future business plans.

“The ability to predict the future is not as good as it used to be, or at least that’s the perception”

While boards are used to managing risks for their organisations, Andrew thinks there is more to manage – and more in flux – than in the recent past. As a result, he recommends boards lean more heavily on scenario planning and increase their monitoring of disparate world events. In this way, boards can help chart a strategic and flexible course.

It is a bigger ask than in the past. Andrew believes the modern Non-Executive Director needs to be high-level conversant about more topics these days to challenge and tire-kick scenarios management prepares for. Boards also need to be aware of their own knowledge gaps and open to bringing in outside expertise to supplement and advise as needed.

“Make sure you don’t have all your eggs in one basket”

Risk assessments, skills gap analysis, scenario planning… to Andrew, it’s about boards making sure their companies have the agility and resilience to withstand economic or geopolitical shocks. He believes boards should elevate supply chain strategy to reinforce agility and resilience by embracing technology—such as AI and automation—that refines supply chain performance and drives cost efficiency.

Andrew also feels investing in the circular economy and adapting to consumer expectations is essential for supporting sustainability and aligning with regulatory demands. To him, supply chains are more than logistics pathways. They are competitive advantages that can withstand global shifts and digital transformations. Boards can direct this shift, positioning companies to thrive in a rapidly changing economic landscape.

“The problem some companies have is a lack of confidence in the likely return on investment of allocating capital towards sustainable sources”

To Andrew, transitioning to a low-carbon economy is non-negotiable, with significant net-zero commitments from nations and corporations. Despite the inclination to prioritise short-term earnings, boards must confidently champion sustainability as a value-creating strategy, not a cost centre. The EY Sustainable Value Study reveals that proactive climate action correlates with increased financial and societal returns.

Thus, sustainability must be ingrained in the company’s accountability systems, with rigorous financial planning, transparent reporting, and a governance framework attuned to achieving these ambitious targets. In this balance between ambition and pragmatism, boards should ensure that management’s steps are bold and confident toward a sustainable future and be more demanding of management to do the work that counts. 

The three top takeaways for effective boards from our conversation are:

1. Boards should recognise the power of generative AI in driving innovation and improving efficiencies within their organisations. However, it is equally essential to establish robust governance around its use. This includes fostering an AI-literate culture, ensuring ethical AI deployment, managing potential biases and cybersecurity threats, and maintaining compliance with evolving regulations. By balancing growth opportunities with proper governance, you can responsibly leverage AI’s transformative potential.
2. Human capital, especially concerning DEI, is a critical strategic priority for boards. As technological advancements, such as AI, reshape the workforce, boards must advocate for policies and practices that maintain a balanced, fair, and diverse corporate environment.
3. Board members must act as catalysts for embedding long-term sustainability into their company’s DNA. This involves guiding management to adopt sustainable practices, pushing for innovative approaches to achieving net-zero targets, and responsibly reporting environmental efforts to stakeholders. Furthermore, resilience should be at the forefront of strategic planning, particularly in reconfiguring supply chains, to mitigate risks associated with global disruptions and support broader sustainability goals.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: A Balancing Act – Where Should EMEIA Boards Focus for Long-term Success? appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Diversity and inclusion are not evenly distributed throughout an organisation, and the view at the board level may not correspond with reality further down. This creates missed opportunities and prevents companies from unlocking the true potential of their talent and their organisations. Often, firms can increase productivity by doing more to be truly inclusive.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses increasing productivity through inclusion with Belton Flournoy, Managing Director of the Technology Consulting practice at Protiviti. Belton co-founded Protiviti UK’s LGBT+ group, which won best LGBT+ network in 2019 by the Inclusive Tech Alliance. He was shortlisted as a Top 10 Inspiring Hero in 2023 by the Investing in Ethnicity awards, is #18 on Yahoo Finance’s Top 100 Future Leaders, #15 on Yahoo Finance’s Top 100 Ethnic Minority Leaders, and is featured on the top UK Black Role models, presented by Google.  Co-founder of Pride in the City with Pride in London, Belton is also an Advisory Board Member for The Inclusion Initiative (TII) at the London School of Economics and part of the leadership team at the Technology Community 4 Racial Equality (TC4RE). 

“When I was young, I looked up and didn’t see many people like me”

Belton is passionate about inclusion for two reasons. First, he feels that when you don’t see anyone like yourself, you fear society won’t allow you in certain circles. Second, he continues to see people limiting which parts of their identity they show or hide, and this holds people back from expressing their true potential. He wants to inspire people who may be as he was when he was younger – holding back or feeling like they should hold back – to step into their full potential for excellence. 

“We don’t just need to focus on diversity initiatives and how they make people feel. We need to link them to the increased productivity”

Belton sees an incredible opportunity to translate the existing dialogues around diversity into more meaningful conversations linked to productivity outcomes and business results. Too often, people say diversity is important or that they care, but they don’t. They say what they believe to be the right things but then delegate away the responsibility for making change.

To bring such people more authentically into the diversity journey – and to achieve significant results – there needs to be a shift in the conversation to link diversity and inclusion with measurable, meaningful outcomes. For example, closing the technological skills gap is critical and impacts jobs and the UK GDP. Showing how increasing diversity speaks to that skills gap, moving people into better jobs, and the overall UK GDP changes the narrative, the motivation, and the buy-in for diversity and inclusion efforts.

“If you haven’t driven the true inclusion values through that middle layer, it won’t permeate through your organisation, and you might find that you think your organisation is a lot more inclusion-oriented than it really is…”

One key opportunity Belton sees for organisations is to look at how inclusion and diversity are distributed throughout the business. Many boards have done serious work on inclusion, building it into the mission, governance, and operations. Yet when you drop into the middle management layer, there’s a sharp drop-off in belief, behaviour, and execution.

Belton cites a study from McKinsey that notes that while some 80% of senior executives who are gay are out at work, only 32% of junior executives are out. It’s an example of the drop off in perceptions of acceptance, inclusion, and career safety as you move down into what Belton calls the “real guts” of a company. So, while boards may be celebrating their achievements or feeling like there’s no need to push for a significant change, the actual situation in the organisation may be quite different. To bridge this gap, Belton recommends leaning into quantitative data and metrics. Hard numbers create opportunities for concrete action steps and real accountability for change. Metrics can also remove subjectivity and false beliefs from the inclusion and diversity process, helping behavioural and belief shifts permeate equally from the top to the bottom of the organisation.

“The goal is to create research that helps organisations drive inclusion through evidence-based research”

Belton sees many organisations dealing with inclusion and diversity by conducting surveys and reporting their interpretation of the survey results. This approach lacks rigour. This is part of why he devotes so much time to research partnerships, to help create strictly measured and robust studies that can drive change with hard evidence about what’s happening and what works.

For example, in a study about inclusion during remote work, researchers found that women and minorities were adversely impacted by remote work arrangements, especially during the COVID-19 years. Employees who needed something or someone for a project tended to lean on those they knew well or in-group members rather than going out to more diverse workmates, compared to how project work was distributed in the office. Another new study reveals that the primary barrier to advancement for women in the workplace lies with middle managers with mediocre performance ratings. This speaks directly to the need to educate and instil values down through every layer of each company to ensure talented workers aren’t being unnecessarily blocked from reaching their potential.

“What you need to do is realise your voice is valid from day one”

Belton feels there are two things which have helped him rise. First, he rejects a fixed mindset and focuses on cultivating a growth mindset. This is especially important as one grows older since there is a tendency to revert to a fixed mindset, but change and growth are only possible when one believes oneself capable of growing and changing. Secondly, he cultivates an internal locus of control. Rather than assigning control of his life to others or believing that an externally controlled system is responsible for his life outcomes, he works to frame situations in terms of what he can control and take action on.

Further, he advises other diverse individuals who find themselves rising in organisations or sitting on boards to embrace the validity of their presence and their opinions. There is a tendency to hold back or to adopt a watch-and-learn position. Instead, Belton recommends accepting that you were put in that position for a reason, that your insights and perspective are valued and wanted, and that you must express what you see as needed for improvement or change. If you lack confidence, remember that all leadership abilities are skills that can be learned and layered into the unique perspective you bring. Plus, by continually looking to be involved yourself – not just speaking in support, but doing – you allow your skills as a leader and an individual performer to align with your words for maximum impact, education, and inspiration to others.     

“Part of our role is to find that untapped potential, to release it in our organisations, and to secrete that energy and drive to get people to really want to work for our brand, our values, and our mission”

Belton recalls being at a TLC Lions awards ceremony where one of the honoured young men said, “I never thought I’d be somewhere like this. I hope everyone realises that my ceiling was your floor. I’ve shattered everything I thought I was capable of.” It stuck with him because people with incredible talent often do not believe in themselves. If the organisation can help them see what is possible and guide them toward achieving it, then all this potential is unlocked. You will see far fewer departures, and your organisational productivity will skyrocket.

The three top takeaways from our conversation are:

1. Create a personal board. As a senior leader, it is hard to get good feedback. So, identify three to six people to talk to about your career between one and four times a year, in a professional context. This will transform how you get feedback on challenging issues and help you have a priceless sounding board.
2. Realise the voice in your head is just a voice. You don’t have to listen to it. You can ignore or challenge it, which is especially useful for overcoming negative internal narratives.
3. Contribute to the productivity research of the future. Complete the ongoing survey on generational productivity from the London School of Economics and Protiviti. You can complete it here:  https://www.protiviti.com/us-en/survey/lse-generations-survey    

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Increasing Productivity Through Inclusion appeared first on The European Business Review.

Boards can be complex structures, which can be overwhelming for a first-time CEO to navigate successfully. In this episode, we delve into the experiences of a first-time CEO. We discussed the challenges she encountered and the strategies she used to handle the intricacies of board dynamics.

In this episode, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, speaks with Daphne Mavroudi-Chocholi about her experience working on a board for the first time. 

Daphne, the Managing Director of RNIB Enterprises, brings a wealth of experience to the table. Her career spans over two decades, during which she has held senior-level positions in various industries. Her strategic, consultative approach and advocacy for innovation and inclusivity have been instrumental in her success. Her previous roles included managing director of Vetz Petz, head of organisational change at Barclays Bank, vice president of marketing effectiveness at Nielsen, and chief revenue officer at Machine Vantage.

“What has surprised me the most, coming from the start-up world, is the governance”

Daphne’s previous experience was in the start-up world. There is an established background in that world, and investors invest in the person and the idea. Now, she is the Managing Director of RNIB Enterprises, a for-profit subsidiary of a large charity in the UK, and charities in the UK are in a highly regulated environment. Comparatively, there are more risk registers, moving pieces, and compliance for her now than in the start-up world, impacting the board dynamics. She finds it constantly necessary to consider the right balance between governance, agility, nimbleness, and the ability to make decisions.

There has been a noticeable shift in board management philosophies and tactics over the years. The governance models that were effective in the 1980s and 90s may not be as relevant today. The business landscape has evolved, and the pace of change has accelerated. This raises the question: How can we maintain effective governance in a world that moves at this speed?

“There are two places I really see value coming through. One is honesty, and the other is the idea of working with a board rather than sitting on a board”

Daphne feels very lucky in her board relationships. She sees two areas where the board provides and creates particular value.

First, life as a CEO can be a lonely existence. You often have to edit conversations or refrain from sharing certain information with outsiders. With your board, on the other hand, there’s the opportunity for honest, no-holds-barred conversations, and that space for transparency creates immense value.

Secondly, by viewing the board as a partnership relationship, you gain the benefit of a critical friend. You are speaking with someone, or a group, who is close enough to the business to get the context but far enough removed from the day-to-day to offer a different and often clearer perspective. Daphne feels this is invaluable, and when her board comes together for formal meetings and decision-making, this is the backdrop for them.

“Ultimately, the truth will always be out, so there’s only so long that you can put on the dog and pony show to pretend that certain things are true, or that you’re a particular individual”

While Daphne enjoys a close partnership with her board, she realises that other CEOs may not have this kind of positive relationship. So, it is necessary to work at it and to create it. Daphne has a few ways that she goes about this.

One tactic is consciously switching roles. For example, at times, she will explicitly say to a board member, “Hats off, I’m no longer the Managing Director, and you’re not the chairperson or the director of the business. We’re having a person-to-person conversation for 10 minutes about the things that are challenging, and then we’re going to put our work hats back on.” So she has the conversation, and then, when the work hats go back on, a different conversation happens that is more fact-based, data-driven, and rational.

While some may find this role-switching challenging, she feels it can help build trust and transparency. Putting on a show doesn’t last, but authenticity and helping people understand you and where you’re coming from can lay the foundations for a supportive, collaborative relationship.

“The most challenging part of working with a board is striking that balance between managing the board, engaging with board members, ensuring alignment, and then actually doing the day-to-day job”

To Daphne, one can be pulled into board work and move away from the business. Or, one can go so deeply into the business that one forgets to update the board and bring them along on the journey. She finds it helpful to build an alliance with the Chairman of the Board to help manage stakeholders and information flow so a sense of balance can be created and maintained.

“What is the shining city on the hill we’re all marching toward?”

Along with an ally in the Chair, Daphne finds storytelling extremely helpful. She recommends a previous podcast with Joyti Gupta on storytelling for those interested. Storytelling helps create narrative fluency in the common culture and goals that drive the business. It can bring everyone together on the same page, build clarity on why things are being done, and drive everyone forward in the same direction.

“In God we trust; all others bring data”

A second thing immensely helpful to Daphne is an insistence on data. It builds credibility and helps move conversations from opinions and emotions to facts. This also helps build a strong foundation of fact-based decision-making in the board and company culture.

“The reality in working with a board is that when you share a 300-page document, often there’s gridlock”

Balance is a third element Daphne finds helpful to monitor closely. It links with the other factors. For example, if you have a straightforward narrative and sound data, you share what matters instead of everything. Companies often lack clarity, so they don’t know what to share and load their board packs with everything. This overwhelms boards and takes up incredible amounts of time. Daphne is a fan of the Amazon pack, which has a maximum of six pages, though she realises it’s aspirational for most! However, she feels a straightforward story allows for shorter packs and reduces the cognitive load on the board, boosting board effectiveness.

“You might as well be honest and transparent at the beginning.”

The final element for Daphne is transparency. She mentions it often because it matters on multiple levels. It builds trust. It helps us understand each other and the business. Above all, transparency helps extract maximum value from the board because when the members understand the story, data, and balance, they can understand how to bring their full range of skills and abilities forward, exponentially magnifying their impact.

“I would love to see boards really embrace diversity and bring different thinking into the room.”

Daphne would love to see boards expand their candidate pools beyond traditional work networks and the tried-and-tested executive firms. She would love to see more individuals with diverse backgrounds and broader characteristics, be it gender, age, or ability. It might appear at first as extra work, but she feels it allows everyone to expand, amplify, and augment their thinking, meaning real value can be extracted with some work upfront.

The three top takeaways from our conversation are:

1. It is imperative to create narrative fluency with your board. Clearly describe the proverbial “Shining City on a Hill” as the whole organisation and the Board marching toward it.
2. Build diversity around the Board table, especially diversity of thought and working style, to challenge the status quo in a good way.
3. Truth will come out – it is best to be honest and transparent from the start.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: My Experience of Working with a Board for the First Time appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Boards have an essential role to play. When companies face increasing uncertainty, they need to lean in and embolden management to do what is right for the long-term health of the business, not just deliver short-term results. Nowhere is this more pertinent than when it comes to the topic of sustainability. 

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses how board members can help make a difference with Andrew Hobbs from EY’s Center for Board Matters across Europe, the Middle East, India, and Africa (EMEIA). Alongside this, he continues to serve in his role as EMEIA Public Policy leader.  Through these roles he meets boards and audit committees of companies of all sizes, discussing regulatory change and corporate governance. Andrew is co-author of the annual EY Europe Long-Term Value and Corporate Governance Survey. He is also Chair of the Corporate Governance Working Group of the European Contact Group and Vice-Chair of the Corporate Governance Policy Group of Accountancy Europe.

“There’s a significant strategic data and information gap at the board level“

One of the big discoveries from the recent EY survey of 200 C-suite or Non-Executive Directors across a variety of companies in Europe was the data gap. Andrew notes there is a small group, less than 25% of the total, who have been identified as leaders on the sustainability and governance front. These leaders, compared to the rest, were much better informed and working from a much stronger set of metrics that helped them build and showcase the links between ESG decisions and other value-creating objectives. Too often it seems, according to our discussion with Andrew, those who aren’t at the leading edge are operating with little clarity on their metrics. This makes it harder for them to provide effective oversight, challenge management on key sustainability issues, or engage in a meaningful way with shareholders and stakeholders about sustainability goals.

“Metrics are key for good decision-making.”

Effective decision-making on capital allocations for ESG and quantifying returns on investments is impossible without good metrics. Andrew notes that both leaders and those he called “followers” reported challenges around getting good metrics that allowed them to capture the financial implications of their decisions. It’s an area of opportunity – after all, to make informed decisions and have useful conversations, Andrew says boards have to be able to get the right kinds of data.

“It isn’t about creating a board full of sustainability experts. It’s about encouraging boards, or giving boards enough training to ask the right questions.”

Andrew says many boards are seeking members with sustainability skills, but that may not be the right solution to the problem. Instead, boards need training to ask better questions of themselves and of management – questions that challenge short term thinking, that probe for a deeper analysis of financial impacts, and that encompass more of a holistic, long-term view of what sustainability choices are going to do for the business and to the business. After all, some sustainability decisions that need to be made now will not deliver immediate returns. Boards need to be able to tell a compelling story about the business case over a longer-term timeframe and really sharpen their investor narrative.

Boards may also choose to supplement their expertise with outside experts who come in as a part of a committee or for specialised reporting responsibilities. Andrew notes this may be a very effective path, especially in areas where the technology or regulations are changing rapidly, and it is essential to keep current. Additionally, he feels board Chairs have a significant role to play here because Chairs can set and rearrange the board agenda to ensure sustainability issues stay top of mind and as a continual priority. Of course, sustainability is everyone’s responsibility, and if every member of the board reinforces its importance, then that makes life easier for the Chair.

“We’re not saying that boards need to do the job of management.”

Andrew feels that while boards shouldn’t take on management’s responsibilities, boards need to be ready to challenge and question decisions to find meaningful solutions. If a target has been set, due to regulations or internal goals, but things are behind, how can boards create accountability and pave the way for a real change in business practices? How can boards create deeper conversations about costs, benefits, and resource allocations? It’s not easy, but it is work that makes a difference.

“All that gathering of data and setting up the systems and controls to report is giving boards and companies insights they didn’t previously have.”

There is a huge slew of regulations out there, which some companies view as a distraction on their path to developing a more sustainable business model. However, Andrew points out that looking at this regulation as a compliance exercise is the wrong mindset and approach. Instead, boards need to look at the regulation and say, “How can we turn this to our advantage?”

Looking at regulations as an opportunity shifts everything. The additional data reporting can be viewed as a burden, or it can be looked at as getting insights that weren’t available before. Having those insights presents a chance to get beyond regulations and a chance to gain focus on strategies because there’s better integrity around the data and higher quality inputs available for decision-making. This can allow businesses to make decisions that make them more competitive and put them ahead of their peers, delivering more sustainable growth over the long-term.

“Businesses need to walk the tightrope between growth and governance.”

Andrew feels businesses need a balanced approach to governance and growth. One example is the use of artificial intelligence (AI) to advance or monitor sustainability efforts. Boards need to look at the business opportunities it presents and the environmental impacts surrounding the use of AI, including the long-term impact on the workforce and the environment. At the moment, he’s not seeing a consistent approach or application of AI in governance or sustainability. Still, responsible use of AI systems is certainly a topic of conversation as the technology expands.

The three top takeaways from our conversation are:

1. Boards are the long-term stewards of an organization. While, of course, boards need to be mindful of what’s happening now and deal with that, they also need to encourage a focus on the future and ensure that long-term value and priorities are not neglected in the face of more immediate concerns.
2. Boards need to ask better questions to get better answers and not shy away from the challenges presented.
3. Boards play a key role in linking reporting to a stronger long-term value narrative for investors. If boards advocate for reporting that facilitates better business decision-making for the longer term, they will help ensure sustainability is seen as mission-critical. Sustainable business models aren’t just a nice to have; they are essential to ensuring that businesses will not face existential threats. And that is good business.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: How can Boards Convert Sustainability from a Wish to a Winning Reality? appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

The playwright George Bernard Shaw once noted that England and America are two countries separated by a common language.   Are they also separated by common corporate governance practices?   What are the key differences between the U.S. and the U.K.  in their approaches to corporate governance?   How do these differences impact an independent/Non-Executive Director in their duties?

In this podcast, with Susan Skerritt, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses corporate governance practices in the U.S. and U.K..  Susan is Independent Director of Tanger Factory Outlet Centers, Inc. (NYSE:SKT), a Non-Executive Director of I.G. Group, a global derivatives trading company (FTSE250), an Independent Director of Community Bank System Inc., a bank holding company and its banking subsidiary, Community Bank, NA with over $16 billion in assets, and a Non-Executive Director of the Falcon Group a leading inventory management solutions business. Her 35-year financial career included leadership roles with premier banking institutions, most recently, Chairman, CEO, and President of Deutsche Bank Trust Company Americas, Deutsche Bank’s U.S. commercial banking entity with over $50B in assets.

“I’ve been lucky to find boards that want my experience, perspective, and where I think I can add value”

To Susan, the most important thing when looking at board opportunities is whether you see yourself bringing value to the organisation. From there, it’s about whether you think you’ll enjoy it and have the time to do the role justice. She pursues global board opportunities because she’s always operated in and enjoyed the global business world.

Susan also notes that while boards in the U.S. and the U.K. have their differences, there are also many similarities. Both operate on the Anglo-U.S. model, which differs from the German, Continental, and Japanese models. There’s a one-tier board, where most board members are from outside the company, and that fundamental structure is consistent between the U.S. and U.K. jurisdictions. 

“The most important differences are the philosophical differences”

For Susan, the most important difference is philosophical.

U.K. corporate governance is principles-based. There is a corporate governance code that’s updated regularly, and it’s applicable to companies with a premium listing on the London Stock Exchange. The code operates on a “comply or explain” basis, and that really recognises that one approach may not be appropriate for all companies. The code encourages companies to choose the governance practices best suited to their circumstances, and enables companies to explain any variation from the code in their annual reports to shareholders.

The U.S. approach is more prescriptive. There is no corporate governance code per se. Rather, publicly listed companies are subject to four areas of law and regulation: state corporate law, federal securities law, Stock Exchange listing rules, and federal and state laws related to specific industries, such as financial services. These laws and rules must be complied with, or a company is subject to legal action or being dropped from the stock exchange.

The second philosophical difference relates to whom the board is ultimately responsible. In the U.K., the duty of Directors is to shareholders, but regarding stakeholders, that combined shareholders and stakeholders’ duty is clearly outlined. In the U.S., shareholders’ interests tend to be the primary concern of Directors. The Business Roundtable and Association of Chief Executive Officers recommended in 2019 that the U.S. shift toward stakeholder focus, but that’s still evolving. Susan would like to see it develop faster, as this is an area where she feels U.K. boards are ahead of U.S. boards and where U.S. boards would benefit from making a sharp change.

“Beside philosophical differences, there are structural differences”

Susan sees several structural differences anyone looking to serve on U.S. and U.K. boards should know. For example, in the U.K., the Chair and CEO are more likely to be separate, with fewer than 10% of FTSE companies having a combined role. In the U.S., over 50% of S&P 500 companies have a combined CEO and Chair role. Susan finds this can lead to conflicts of interest, and prefers the fully separated U.K. model.

Further, the U.S. tends to combine legal counsel with the corporate secretary role. Some three-quarters of American firms do this, while only some 40% of U.K. firms do. Committees are also different. There are three standard committees: audit, nominations, governance, and compensation, or, as it is called in the U.K., remuneration. However, over half of FTSE 100 companies also have ESG committees, while fewer than 15% of the largest U.S. companies have an ESG or sustainability committee.

“There are also differences that impact the Directors themselves”

Susan likes to share numerical differences to help illustrate where the board structures are starkly different. However, there are also key differences beyond operational structures that impact Directors themselves. These anchor on board refreshment, compensation structures, and education for board members.

In terms of board refreshment, in the U.K., term limits for board members are the norm, with typically no more than a total of nine years of service allowed. However, in the U.S., only about 7% of companies have term limits of any kind, as confirmed by the latest Spencer Stuart surveys. Instead, U.S. boards favour age limits, usually enforcing retirement at age 72. To Susan, a better approach than either would be board assessments, rather than rules, to ensure companies aren’t holding onto Directors simply because they haven’t limited out or releasing Directors who still have a great deal of value to offer.

Compensation structures also differ. Susan sees that in the U.S., most public boards compensate members with a combination of cash fees and equity grants, with equity grants often larger than the cash base. In the U.K., monthly cash fees are more common, and fewer than 5% of FTSE companies pay any Directors’ compensation in the form of corporate shareholdings. Susan feels that having Directors granted stock in the company provides a better alignment of interests, so Directors think more like owners.

Finally, Susan notes a difference in how board members are educated and prepared for their roles. In the U.K., the long-established U.K. Institute of Directors and many other training organisations provide standard education and even certificates. In the U.S., there’s a new National Association of Corporate Directors group, but no real comparable training.

“There are a number of differences in the way that boards operate and in the way that they’re structured. But I don’t see significant differences in the behaviours of Directors”

Susan finds it interesting that despite the structural and operational differences in U.S. and U.K. boards, the Directors she serves with behave with a similar focus on their duties of care, loyalty, and working to ensure the long-term health of the company. Ultimately, in both jurisdictions, the most effective Directors are those interested in understanding what is considered best practice and determining whether those practices would be beneficial to their organisations.

The three top takeaways for effective boards from our conversation are:

1. If you have global experience that you want to deploy in your board work, consider a board in another jurisdiction. You would bring cultural diversity as someone with experience in another country. That experience is precious if the company operates globally and most of its existing board members are from one country.
2. Corporate governance continues to evolve in every country. By having experience in multiple jurisdictions, you bring perspective about what boards in various jurisdictions should be considering.
3. Even if you don’t join a board in another jurisdiction, keep updated about how corporate governance is evolving outside your country. There are best practices you observe in other jurisdictions that could be deployed no matter where you serve.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: U.S. and U.K. – Two Countries Separated by Common Corporate Governance Practices? appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Climate change has transitioned from distant environmental concern to pressing business issue. With its impact on operations, supply chains, regulations, and stakeholder expectations, boardroom discussion has become imperative. The rhetoric between business and climate activists has hardened. Friends of the Earth in the Netherlands have sued Shell and are now in the process of suing ING. What should boards do?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses the motivation and logic behind the move to sue ING Bank and learnings for boards with Donald Pols. Donald is Director of Friends of the Earth in the Netherlands. He previously participated in the United Nations Framework Convention on Climate Change (UNFCCC) negotiations as an expert on financing the transition towards renewable energy together with delegations from WWF International and the Dutch government. He has also worked as natural resources program director of WWF International in Beijing, as director of WWF China’s Climate Energy program, head of WWF’s climate program, and as senior adviser on environment and nature in the Dutch parliament.

 “We can and will manage to address dangerous climate change if all relevant actors contribute, including the financial sector.”

Donald’s work with Friends of the Earth (Milieudefensie) in the Netherlands is bringing the climate fight to boardrooms. He cites the reality of the regulatory gap as a key factor here, which means that while governments sign agreements and individual countries make pledges, large multinationals often have no one person or entity truly holding them accountable. Often, the financial sector operates in this regulatory gap, which is why he is using a lawsuit against ING to make an example.

ING is one of 30 “system banks” according to the Financial Stability Board, a global financial monitoring group. It is one of the largest financiers of fossil fuels in the world, which gives it a unique opportunity to shape climate change impacts. Milieudefensie and Donald believe that decisions made by the financial sector largely determine the direction of the development of the global economy. So, they are asking ING to cut its contribution to dangerous climate change by half by 2030.

“It’s time to start acting on all these initiatives instead of only talking.”

The first step in a democratic society is always a dialogue and a conversation, but Donald notes that conversations have happening for decades with no real progress. So, taking things to court is an intentional escalation of the conversation.

Is this extreme? Not to Donald. He sees going to court as a part of the democratic system, which allows parties with a difference of opinion to get a judgment on those opinions. It also creates a way to close the regulatory gap. Donald believes that too many firms spend more on the marketing around their climate responsibility pledges than they do on acting on their pledges. Court judgments create firm, objective standards for action being taken vs. not taken. Court judgments also provide companies with a rationale they can take out to shareholders as to why certain business changes are being made that do not prioritize profits above all else.

“If there’s only one message I can give to your listeners, it is that climate change is not an ESG issue. It’s a material issue.”

Donald feels that for boards to truly take climate change seriously, they must stop treating it as a side issue. It is a material issue that is crucial for the financial continuity of a company. Once boards recognize this, the practical steps are to design and implement a policy that is aligned with climate science and international climate agreements.

To Donald, an adequate policy for a board to avoid being sued by the climate movement starts with an overall objective or target to reduce their contribution to dangerous climate change across the whole value chain. The whole value chain means that in addition to a target for its own activities, a firm should also demand climate plans from its main suppliers and clients. Companies that wish to position themselves on the forefront should publish their policy and include it in their public communications as an example to others.

“What we notice in our engagement with companies on a C-level is that climate change knowledge is lacking in general.”

In Donald’s view, acting on climate change starts with leadership from the top. Boards must make climate change a company-wide priority. Ideally, this will result in climate change being a fixed issue on the board agenda, whose importance influences policies not just for the firm, but also for suppliers and clients.

Unfortunately, Donald feels many directors lack the necessary know-how to do this effectively. As a remedy, he would like to see companies establish a dedicated Corporate Sustainability Officer (CSO), and give their CSO a place on the board. At present, climate change is often grouped together under the responsibility of the Chief Risk Officer or placed with the Chief Marketing Officer, but these individuals may not have the right expertise to appropriately advise or guide their firms.

“The boards of multinationals that I visit are concerned with achieving and measuring impact. However, the way we measure impact is fundamentally different.”

As Donald sees it, most boards measure shareholder value. Firms like his, in the activism and non-profit space, measure stakeholder value. Thus, it becomes less about how much money is made and more about what noticeable changes are achieved and what societal support is won.

It is a challenge. Investors want to see the money, and corporate boards are used to speaking that language. Yet court judgments and real commitments to climate change action provide a strong form of support for the board to say, yes, we know that the conversation has been about profits, but profit alone is not a justification for failing to take action. In this case, a longer-term view must be taken, Donald feels, and a different conversation given priority. After all, there can be no profit and no financial continuation of a company if we end up on a dead planet.

The three top takeaways from our conversation are:

1. There’s a need to act to prevent dangerous climate change, and this need has become a new societal norm applicable to all corporate and financial institutions.
2. Climate change is a material issue with fiduciary implications. Not acting in accordance with this responsibility already has and will have legal implications in the future.
3. On a more personal note, you’re a CEO, but you’re also a parent and a grandparent. You’re a board member, but you’re also responsible for life on Earth, especially for your family. The discussions you have and the decisions you make on a daily basis will have an impact on the future of our shared planet. There’s no profit on a dead planet. Act accordingly.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: What do Board Members Need to Think About to Avoid Being Sued by the Climate Movement? appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

The board is a powerful asset for tech start-ups, with board members providing access to a wide international network, industry know-how, and strong expertise in building new ventures. Yet, since the interaction takes place behind closed doors, there is a lot of uncertainty about how the CEO and director dynamics play out. How open is the communication between both sides? Where are investor expectations not being met? How frequent are challenges and vetoes?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses tech start-up boards with Yael Benjamin and Tzahi (Zack) Weisfeld. 

Zack specialises in re-inventing large multinational tech companies through open innovation with start-ups. He is currently Vice-President and General Manager of Intel Ignite, Intel’s accelerator program. Previously, he was the GM for Microsoft for start-ups (110 countries) and is a serial entrepreneur and investor. 

Yael is the Founder/CEO of research firm start-up Snapshot, which collects, analyses, and shares data about the tech community and the entrepreneurs who drive it. Her research is based on data collected directly from start-up Snapshot’s global community of founders and investors, covering key entrepreneurial topics, such as boards of directors, fundraising, founder mental health, investor relations, compensation, and new technologies.

“One of the main conclusions of the research is the focus on communication, or we’ll call it the lack of communication, and transparency between tech CEOs and their directors”

Yael has fresh insights from a survey of over 200 CEOs of tech start-ups and their board members, designed to understand the dynamics of what happens behind the closed doors of the boardroom in young, privately held tech companies. Her research finds one of the biggest issues is communication. Some 61% of the CEOs say they’re not fully transparent with their board. Instead, she notes, they are waiting to report difficulties, sugar coating challenges, and keeping themselves in a fundraising or sales mode with their board of directors rather than showing vulnerability or authenticity.

According to Zack, this lack of vulnerability and authenticity may be driven by a fear of criticism or judgment. Many tech founders populate their boards with investors – the same investors they just sold on the company’s potential and their own personal potential to deliver on big promises. They don’t want to reduce the confidence of current or potential investors by showing vulnerability or weakness, as this may impact their future ability to raise funds.

“The lack of transparency is leading to a situation where CEO’s do not utilise the value of the board”

Yael’s research finds the lack of transparency and trust leads to extra challenges and diminishes the value board members can bring. Some 43% of the CEOs in Yael’s survey say they have a difficult director on their board. These difficult directors are pushing back on management decisions, fuelling heated debates, and really using veto rights. One particularly alarming statistic to Yael was that 28% of start-ups said their board exercised at least one veto. She feels there needs to be discussion around whose responsibility it is to prevent the vetoes and about the leap many CEOs and founders need to make between raising a lot of money and understanding how to manage board situations.

“There’s a difference between first-time founders and people trying to manage or work with a board for the first time versus the more experienced founders that have a better handle on the governance of their start-up”

Zack feels the experience is a large and underappreciated factor here, both on the side of CEOs and founders and also on the side of board members. With board members, you see big differences between people who have been operators or run their own companies before compared to professional investors. With CEOs and founders, especially first-timers, it is not always clear they have enough experience and resilience to work with their boards effectively.

Layer in the personalities and financials involved, and it just gets more complex. The responsibility to prevent conflicts and vetoes is shared. Zack thinks both parties should work towards transparency, open dialogue, and mutual respect.

“CEOs that are young and inexperienced need to get the right kind of mentorship”

Zack feels it is important for young and inexperienced CEOs and founders to find advisors who can be great sounding boards and resources for managing board situations. He feels consultants are not a good choice here – it’s better to get a practitioner with first-hand experience of the emotions, operations, and intricacies. He screens for people who have those skills but don’t actively manage a company so they have enough time and bandwidth to help others.

He also feels you need to find someone you are comfortable sharing everything with and fulfilling on that transparency element. This person can help you bring that same transparency to your board conversations. This full transparency will help with something Zack feels is a major sticking point – you never want to surprise your board! You want them to be prepared for meaningful conversations. Doing that well, which a strong advisor can help with, will strengthen the company and may even impact future valuation.

“A great way to help first-time or younger founders is to have an independent board member”

As founders seek advisors, Yael’s research shows that 60% of start-ups do not have an independent board member. They populate their boards with investors, but these investors have a naturally biased interest in how the company develops, which can impact their behaviour. As a result, Yael feels adding an independent board member can bring in someone unbiased who can provide different advice and help the young founder effectively manage the board and board relationships.

Zack recommends joining programs and accelerators to find independent board members since these programs can help create connections where there’s the right mix of chemistry and expertise. He also recommends young founders and first-time CEOs ask everyone they can for introductions, attend local industry events, and make an effort to attend broader related conferences and events to expand their circles and connect with a wider variety of people.

“Investors really overestimated the value they’re providing versus what those CEOs said they’re receiving”

As an additional consideration when looking at investors as board members, Yael’s research finds there’s a large imbalance in the perceptions of the value of advice and guidance. CEOs and young founders don’t feel they receive great value from their boards.

According to Yael, trust, transparency, and comfort levels are factors in this. For example, while 81% of directors said they want CEOs to be transparent and give them tasks to help with, only 30% of CEOs said they would feel comfortable doing that. They feel afraid to ask. Having independent board members who are not investors can help young founders build their comfort levels and trust in going to their boards for help. In the future, this may unlock more board value and fix the value perception issue.

“The reality is that VC partners are often on too many boards”

Considering Yael’s data and his own experience, Zack feels an issue not often talked about is that VCs and investors are on too many boards. This dilutes their time and reduces the attention they can give to any one company. Early-stage founders may not know how to navigate around this or how to frame their requests to get the most from extremely busy board members.

“When we talked about selecting your advisor, your mentor, you need to select a partner that’s going to invest in you”

At times, the only thing a VC has to offer is their cash. This means start-ups need to look for someone else to serve in that mentoring or advising capacity very intentionally.

Zack feels selecting this person requires extreme care and due diligence. He recommends talking with other founders to see who they observe bringing value, considering angels as they may be more engaged than pure VCs, and considering the freshness of certain experiences to determine if a partner can truly bring the most market-relevant advice forward. He says it is not unlike dating – you want to select a partner willing to invest in you on multiple levels and someone you have the chemistry with to partner up with for a long time.

The top takeaways from our conversation are:

1. Yael notes founders and CEOs have to be mindful about how they communicate with their board of directors. Communication is going to prevent challenges and help access value from the board membership. If a team of advisors is needed to manage these communications, it’s okay to put that in place to enable more effective communication.
2. Zack wants to remind everyone to choose your mentors, VCs, and board members as carefully as you can – with at least as much care as you would a co-founder or spouse.
3. Zack would also like to remind CEOs and founders that they are in control of their companies, not the boards. While boards play advisory roles, the ultimate responsibility for managing the firm lies with the CEOs and founders.
4. Finally, Zack notes when it comes to boards, mentors, and advisors, adopt a “help them help you” approach. The more friction you can take out of the process, the more likely you are to get the valuable help you need from busy, well-connected people.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Behind the Closed Doors of Tech Start-up Boards appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

As we recorded this podcast, the World Economic Forum convened in Davos. The Forum published its Global Risks Report, which finds that environmental risks make up half the Top 10 risks over the next ten years. Climate change remains one of the most urgent challenges confronting boards in their oversight capacity.

How can boards improve their oversight of climate-related risks? And what does accounting have to do with it?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Director of Better Boards, discusses how boards can improve their oversight of climate-related risks with Mike Mahoney. Mike is the CEO of the E-liability Institute, a global non-profit organization advancing accounting upgrades to drive green innovation and reduce carbon emissions. In November 2021, Professor Bob Kaplan of Harvard Business School and Professor Karthik Ramanna from the University of Oxford published a prize-winning paper, Accounting for Climate Change, which debuted the E-liability concept. The Institute helps entities pilot this approach and shares their results widely to improve carbon accounting.

Before joining the Institute, Mike was a partner at Tapestry Networks, working with hundreds of non-executive directors of the largest North American and European companies for over a decade.

“Let’s focus on the fact that investors say climate change poses one of the largest sources of financial risk to companies and their asset owners”

Climate change has been discussed for years in the context of ESG and sustainability, but Mike says it remains a top risk for boards. Of course, risk is often the flip side of opportunity. Mike feels companies can develop and sustain advantages in how they effectively mitigate these risks or in how they help customers mitigate these risks. These are important strategic issues for management and boards alike.

To Mike, many companies announce aspirational targets to reduce carbon emissions without a clear plan around how they will do it. There’s no effective management oversight of the process or true accountability. So, while the narrative is a step in the right direction, companies would do better to treat climate risks like financial risks and measure and analyse them according to the same strict standards.

“As emissions continue to grow around the world, the current system simply isn’t working”

Mike feels most companies use approaches to carbon accounting based on carbon disclosure requirements that aren’t fit for purpose. To appropriately analyse and mitigate climate risk, companies need to precisely understand the carbon intensity of their operations and that of their suppliers. Instead, firms are leaning on estimates and industry averages, which can be highly inaccurate and introduce so much distortion as to render carbon disclosures useless. It’s also impossible to provide a fair and true audit of these kinds of estimated disclosures.

“There are six questions to answer about how the company and management are thinking about measurement and accounting of climate-related and emissions data”

Mike suggests management and boards seek to answer six key questions:

1. How does management measure and account for emissions from its operations and suppliers? What’s the methodology?
2. How is management moving to improve the quality and accuracy of emissions data by using more primary direct data and reducing reliance on industry average data, making it more vendor and product-specific?
3. How is management using this data to identify opportunities to reduce emissions in the company’s operations?
4. How are emissions embodied in the products and services the company buys considered in procurement decisions and in the context of other procurement elements like cost, quality, performance, etc.?
5. What’s the role of the finance organisation and internal audit team with respect to emissions measurement and accounting? How are the people, processes, and IT systems already in place for robust financial accounting evolving to support robust carbon accounting?
6. What kind of external assurance is being done on this emissions data? If it’s only limited assurance, what’s the pathway to a fair and true attestation of these emissions disclosures?

Mike realises these questions aren’t necessarily easy to answer and recommends that to find sound and true answers for environmental disclosures. Firms turn away from estimates and averages to lean on an alternative approach, e-liability accounting.

“With e-liability, instead of accounting for costs, we’re accounting for carbon”

E-liability is an accounting algorithm that allows organisations to produce real-time accurate and auditable data on their total direct and supplier emissions and those of any of its products and services. It is a simple, open-source, free-to-use set of principles that can create an accurate and auditable total “cradle to grave” carbon footprint number. It is based on established financial and cost accounting principles and empowers consumers, investors, management, and boards to understand true carbon impact.

Currently, Mike’s E-Liability Institute is working with dozens of companies worldwide to pilot adoption and lean on major software firms to support enterprise-wide scaling. Rather than needing to push hard on this, he gets good support from the big accounting and software firms because this approach looks so much like established financial accounting that it feels like a familiar and natural next step.

“If I were on an audit committee now, I would focus on assurance and attestation”

For Mike, audit committees need to look at how management is moving the reporting and use of emissions data from a limited assurance approach to a fair and true audit. Accuracy around emissions is required for disclosure and what regulators will use to hold firms accountable in the future. So, boards and management should be confident there won’t be any concerns about the quality of their data and actively move from less accurate to more accurate systems of measurement.

The three top takeaways from our conversation are:

1. Climate risk is financial risk, and companies and their boards should manage it as such. Climate risk can be quantified, measured, and mitigated. It can represent a strategic opportunity for competitive differentiation as long as the company’s claims for differentiation can be audited and are meaningful to its customers.
2. It matters how a company does its carbon accounting. Management and the board need rigorous emissions accounting to understand and mitigate risks and seize opportunities.
3. Everyone should learn more about how companies can improve their carbon accounting by visiting the E-Liability Institute (https://e-liability.institute/). The site has a wealth of information, including the original papers published Bob Kaplan and Karthik Ramana, and a chance to connect with the company to learn more and explore pilot adoption of this approach.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Can Accounting Save the World and Your Company? appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

There is much discussion about AI, especially after the launch of Chat GPT, the first available generative AI system. When recording this podcast, Chat GPT is about one year old. It is clear that generative AI will profoundly impact how we work and how organisations operate. My podcast partner has said that it is the most dramatic change we have seen since controllable electricity. Yet, in our board evaluations, we see little about the systematic integration of AI in the agendas of boards. What questions do Directors need to ask in the boardroom?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses the questions boards need to ask about AI with Professor Joe Fuller. Joe Fuller is a Professor of Management Practice at Harvard Business School, Co-Head of the Harvard Business School Managing the Future of Work Project, Co-Head of the Harvard Project on Workforce, and the co-founder of the Monitor Group, now known as Monitor Deloitte.

“In addition to making people more productive, the data is very, very definitive that this is going to make their jobs more interesting”

Generative AI is the most rapidly growing internet-based service in history. It has a remarkable capacity to learn and to drive innovation. Professor Fuller feels that even with as much as has happened so far, we’re all just beginning to understand what this will mean for the future of work, for companies, and governments.

One thing that is clear is that AI systems can make people in a variety of roles more productive. Experiments reveal low-level performers can jump up to high performers, and top performers can become even more productive. With AI removing the dull and routine tasks many people dread, it opens the door for people to do more interesting work.

“Companies are asking entirely the wrong questions”

Prof Fuller feels many companies are still asking the wrong questions. Too many firms look at AI as a super SaaS product. It’s not, and that misunderstanding is limiting them in preventable ways.

Instead of asking, “How can this make my current process more efficient?” Professor Fuller feels companies need to ask, “How do I build the processes to make the most of this technology?”. That shift captures the astonishing breadth and potential of AI. Boards and management teams that can correctly view AI as a revolutionary technology instead of an augmentative technology will do better with appropriate governance and counsel for their firms.

“It’s very important that boards and management go on a learning journey together”

According to Professor Fuller, companies and boards need to work together to demystify AI for their employees. AI is the subject of a lot of spurious reporting and a lot of rumours. Worse, while some 60% of workers feel AI will change the world of work, only 25% of workers feel it will affect them. That’s a level of disconnect Professor Fuller feels will catch many people by surprise.

So, even though management teams and board members are used to leading from positions of established expertise, when it comes to AI, everyone needs to go on a learning journey together. It speaks directly to issues of future board effectiveness and ongoing board development – boards need to engage with management about AI, building a comfort in the dialogue and a shared familiarity with how AI is impacting their particular business.

“For a board not to be asking these questions and, through their dialogue with management, learning how to ask better questions, I think, is a rather important abandonment of their responsibility”

AI has many positive applications, but it also brings with it risks. Who owns those risks, tracks them, and is held accountable for them? Professor Fuller feels boards can play an essential role here, helping set up governance structures and models of use to protect and serve the company’s operations.

“Harnessing the shared knowledge and insight the large consultancies have is really a very appropriate thing for companies to do”

It’s very, very hard for a company to develop a robust set of best practices around AI on its own, notes Professor Fuller. To him, it is highly appropriate for boards to lean on the expertise available in the broader marketplace. Technology companies, of course, are eager to share what they know and what they’ve learned with AI. The large consultancy groups are also incredibly useful resources at present.

Why so is it now? Large consultancies see how AI is being implemented across multiple types of businesses and in a huge variety of scenarios. So, boards can lean on them for increased speed in building their own internal best practice guides, governance structures, vendor management, and risk management plans.

“If you have a lot of data, that’s a huge natural advantage with AI. And so the question becomes, how quickly can I train that data?”

Professor Fuller feels success with AI has two parts – the amount of data available and how fast that data can train your AI into a useful state. Companies that use AI and keep pace with updates could end up with a permanent competitive advantage.

If you have more data and move at the same speed as your next biggest competitor, or even faster, you’re getting smarter before they’re getting smarter, says Professor Fuller. The caution companies are adopting around implementing AI is thus something of a competitive danger.

“The skills we’re going to be looking for will change as this technology becomes firmly rooted in business processes and provides management with the types of insights and data that were often unavailable to them in the past”

Professor Fuller notes that what companies will be looking for in top talent and for board members is changing. Responsive technology trained on historical data has the potential to replace traditional time-linked credentials and make tenure in a role less valuable. However, there are several boardroom skills that this change will elevate.

One skill is the capacity to identify, nurture, and evaluate human talent because advancing people purely on their technical skills is likely to become a less relevant basis for promoting people. Professor Fuller also thinks the capacity to bring excitement about new things to the boardroom, as opposed to a dedication to espousing the wisdom gained in a career alone, will be another more valuable attribute in the future. Finally, the rise of AI will make discernment around data valuable. AI is good at blending data in ways humans haven’t previously imagined. Still, AI outputs need a human interpreter with great business judgment, great values, and a practical understanding of how the tangible world works to lead companies to good decisions and confidence in the decisions being made.

The three top takeaways from our conversation are:

1. AI is as important a development in business as we’ve seen in the last 200 years. It will drive a permanent, critical transformation as impactful as the steam engine or controllable electricity.
2. It’s changing rapidly, and while there is a learning challenge, companies have to view this as an unbelievable opportunity to create a competitive advantage.
3. AI is a very powerful tool. We hope it will be used for goodbut boards need to be mindful of what a powerful tool can do in the hands of bad actors, and guard against that risk where possible.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: AI – What Questions do Directors Need to Ask? appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

What does good look like? What does it mean to lead an effective board? These are probably two of the questions I most often hear. We see vast differences in how Chairs and boards perform in the board evaluations we conduct.

In this podcast, I, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses leading an effective board with Andreas E.F. Utermann. Andreas was appointed Chairman of the Board of Directors of Vontobel Holding AG in 2022. Previously, he led Allianz Global Investors, a global investment company owned by Allianz. Beginning in 2012, he initially served as a co-head and Global Chief Investment Officer. In 2016, he became the CEO, a position he held for multiple years before transitioning into an advisory role, philanthropic organizations, and external board work.

“The transition is greatly helped if you feel you’ve done what you need to do and what you thought you wanted to do as an executive”

While some executives struggle to move over to board work, Andreas feels the transition is much easier if you feel you’ve both done what you needed and wanted to do as an executive. In his case, after 36 years working non-stop, including in executive roles for companies like BlackRock and Allianz, he knew he had accomplished his initial goals. So, it was time to seek out a different type of position. Now, he can be more strategic and more focused on engaging differently with stakeholders and in more of a coaching capacity, something he finds hugely fulfilling.

Andreas also enjoys being quite hands-on with the work and getting into the details. He says being fully present with whatever is at hand, big task or small, keeps him in the moment and not wishing he was doing something else.

“Getting transparent, honest feedback individually is super, super helpful for personal development. It’s also really helpful for group dynamics”

On many boards, performance evaluations are uncommon or held for late in a board member’s tenure. Yet Andreas feels getting those conversations going right away is critically important for good governance, board futureproofing, and overall board effectiveness. So, as soon as he joined the Vontobel board, he helped initiate Board Evaluations in partnership with Better Boards. He feels opening this conversation leads to richer opportunities for personal development, board development, and improving the relationships between the board and the executive team. It improves interactions and helps drive continuous improvement – to Andreas, that’s what it’s all about.

“If you want to be successful, you need to be a contrarian”

Andreas is aware this approach to board evaluations is a little contrarian. This is intentional. Andreas credits his training as an investment professional and his upbringing by his parents for giving him the instinct to avoid groupthink and work opposite to the crowd. To him, if you want to beat the market and be truly successful, your best bet is to do something different.

A prime example of this in his current role is advocating for co-CEOs. It’s unusual, but looking at the personalities involved and the message it sends about the value of collaboration within the company, he feels it is the right strategy. Already, the results are promising and a strong expression of the way the firm has integrated the silos within the business into a more holistic model.

“Good chairs need to have a high EQ”

Being effective as a board chair these days requires a high EQ. Andreas notes that modern boards tend to be quite diverse, with strong personalities to manage. Therefore, he feels it is essential to be able to put yourself into the shoes of other board or executive team members, to see issues from their point of view and understand their position in a debate.

Along with this, Andreas feels good chairs must help create safe spaces for high-quality conversations. Having a place where people feel confident they can speak up honestly without fear of reprisal or retribution – a place with a safe feedback loop – fosters more open and productive conversations, especially on complex issues.

This does require work in between meetings. Andreas advocates for board members to make the time ahead of meetings to prepare for complex conversations. This helps keep the limited space on official board calendars dedicated to high-quality, interactive discussions and helps avoid the need to postpone key business decisions.

“The sequencing of board meetings is a significant part of a successful board meeting”

Before each board meeting, Andreas asks his assistant to block time so that he can reflect on the key topics that need to be addressed. Then, he works to organize the board meeting schedule so that the most intellectually complex and emotionally intense conversations happen early in the day or first thing in the meeting.

To Andreas, it is important to remember that board members are human. They are going to have a natural drop in attention as board meetings lengthen or in the afternoon hours after lunch. Sessions that run over time will cause anxiety. It negatively impacts the dynamic in the room. To Andreas, this is completely avoidable by giving careful forethought to the day’s schedule and striving to keep sessions on schedule.

Andreas also works to create variety in the board meetings. Rather than focusing an entire meeting on finance issues or an HR concern, he works to mix topics throughout the meeting. He feels this helps boost engagement and allows board members with different talents to have the opportunity to contribute their expertise throughout the day.

“Keep admin stuff to a minimum”

Another unique practice Andreas uses to keep his board meetings impactful is minimising the administrative aspects. He feels board meetings should be focused on strategic discussion. This is especially true for the physical meetings, when members may be flying in and flying right back out again.

So, Andreas uses a pre-meeting call to cover administrative details before physical meetings. This includes what he calls “tick box” activities for the board, such as approving minutes and routine actions. No key strategic decisions or discussions happen on these calls, but having them helps create more time during the in-person meetings for high-value discussions and strategic planning.

“I am naturally somebody who embraces change and novelty”

Andreas spends a considerable amount of his time meeting key stakeholders. It may be internal stakeholders or peers in the industry, regulators, or other outside advisors. This helps him keep a pulse on what’s happening in the industry and be aware of rising issues.

Andreas also has an active social media presence in partnership with the Vontobel media team. He shows himself as he goes about his day and in his discussions. It’s proven to be a good way to bring transparency into his role as a board chair and boost engagement from constituents who might otherwise not have given attention to board matters. So, he’s planning to continue that and to continue to experiment with tactics to enhance the world’s view of board chairs.

The three top takeaways from our conversation are:

1. Be courageous. If you fail at first, try again, and keep looking at life as a learning experience.
2. Be honest. If you’re no longer passionate about what you do and are not learning anything, it’s time for a change.
3. Take time to reflect each day on what you’re learning and experiencing, jotting down your reflections and insights so that you can incorporate into your own personal continuous learning experience.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Leading an Effective Board appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

A crucial yet often overlooked aspect of board effectiveness: stories. Imagine a world where numbers and strategies come alive, painting a vivid picture of your company’s future. When it comes to decision-making and leadership, how can compelling narratives inspire your board and drive tangible results? The ancient art of storytelling can be your modern tool for boardroom success!

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses the importance of stories with Jyoti Guptara, who excels in helping leaders align narratives with corporate culture, fostering an environment where stories become a driving force for organizational identity and strategic direction.  

Jyoti is a bestselling author, international speaker, and business storytelling expert. As a consultant, he helps leaders to scale their influence by crafting stories that resonate with different stakeholders. He has worked with start-ups, SMEs, and Fortune 500s, and is a regular contributor to executive education and MBA courses around the world. His book, Business Storytelling from Hype to Hack, has been praised by the CEO of Walmart and by the President of the Institute for Management Development (IMD). His slogan is: “Telling stories is the quickest, cheapest, and deepest way to more influence.”

“We really want to tell a story that can connect people, tell them what we’re all about, and invite people to join us on that journey”

Why do many mission statements fail to change behaviour? Why do most change efforts fail? Jyoti says that when these strategic communications are abstract, they don’t connect with people. An important lesson for businesses and leaders is to tell a good story that helps transform abstract ideas, strategies, and mission statements into something graspable and tangible. The brain is an experience simulator. A story can turn mere information into vicarious experience.

Seasonally, if you look at the Christmas story, there’s a message of hope and a personification of the concept of redemption. People can connect with that in a meaningful and memorable way, so the story of Christmas has endured for thousands of years, even among those who don’t practice the faith. Boards can learn from that framework, and Jyoti says this is a huge area of opportunity for them.

“The larger the organisation gets, the more important the story becomes”

Jyoti says companies are struggling to convince people why they should care. This is true even at companies that have a fantastic mission and story. They are struggling to tell a compelling story, and this directly links to the issues that many firms are facing with employee engagement and community building. Storytelling helps create clarity around the mission and work of the company. It also creates the space for community connection and for building a powerful community around a shared mission and values. This is important for every firm, from the smallest to the largest. Still, it is especially critical in larger firms, where the story becomes the glue that holds everything together and helps ensure the long-term survival of the organisation.

“There are different stories for different contexts”

To Jyoti, telling a good story comes down to telling the right story to the right people at the right time in the right way. This requires narrative intelligence, a skill that can be learned and honed with practice. Unfortunately, most MBA programs aren’t teaching this. Many people also have a misperception that stories need to be a certain length or format. They’re thinking of what would work in a film or book, which is not right for board or business settings.

Instead, Jyoti recommends thinking about where you’re telling a story and why: your goal with the story. Different contexts require different stories. He says one basic principle he’s found helpful is to think about story sizes. Some situations have space for a five or 10-minute-sized story. In other situations, you’ve only got 60 seconds. So it would help if you thought about how to fit your message into a smaller package, and even practice telling a key story in short, long, and extended versions.

When working with clients, Jyoti coaches them on ten essential story types. He helps them work on using different structures and finding spaces in daily conversations and interactions to practice simple storytelling. These have the power to shape behaviour on-the-job, versus a beautifully written statement that is not actually referred to.

One good starting point is what he calls a “bridge story,” which is a story that helps establish common ground and build a connection between two people or among group members. After all, once you’ve established that initial connection or trust point, the other party will be primed to listen to you and give you their attention.

“Boards that do get storytelling right can be a lot more effective”

To Jyoti, it’s dangerous for boards to overlook storytelling. Board effectiveness improves when storytelling is in play, and good stories can also help with board development and governance issues.

On an individual level, having a good story can influence who is brought onto the board and who stays on the board. So, to Jyoti, people need to develop strong personal narratives that showcase their experience and expertise. Once a part of a board, the individual stories can help unite the group and build cohesion as everyone gets to know and appreciate each other. This is especially important in board situations where you are trying to bring together a group with diverse backgrounds and perspectives and meld that group into an effective unit.

As a board, storytelling is vital because it is the board’s responsibility to oversee the company’s direction, purpose, vision, and strategy. Jyoti points out that these things are often highly complex and abstract. Storytelling from the board can help give flesh to the bones and turn what would otherwise be something very vague and nebulous into something that people can connect with and understand. Boards need stories to define and articulate their purpose and vision effectively. Then, they’ll want to work closely with the executive team to roll that message out in a way that employees and stakeholders can understand and embrace and then implement when it comes to strategy.

“If people can’t see the vision, it really isn’t a vision. It’s just fancy words.”

Jyoti feels companies who can’t articulate their vision in an effective story have fancy words with no resonance. You need a strong story to succeed! For anyone looking for examples of companies doing great work with stories, he recommends looking at Coca-Cola, Microsoft, and Kempinski hotels. Coca-Cola has invested a lot in using nostalgic stories to sell, while Microsoft has an annual conference for its internal storytellers to ensure their message gets out in the right way. With Kempinski, the firm has done a great job bringing in employees to tell stories and building that into the management culture. By looking at these and other story-based organisations, you can see how to use narrative and story in your own firm and with your own board to drive success and spread your message.

The three top takeaways for effective boards are:

1. People are not rational. Our default mode is to be emotional and rationalise after the fact. Remember this, and try to appeal to the whole brain by using stories.
2. When people hit you with fact statements or statistics, ask them to reframe it as an anecdote to give a fuller picture of the situation.
3. Practice telling stories every day. This will help you hone that tool in low-stakes situations so that you can shine in high-stakes environments.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Why Story is Mission Critical for Boards appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

We all have dreams. When we sit in our offices, we probably all wonder what life would be like If we made some different choices. In this 100^th podcast In the Better Boards podcast series, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses the inspiring life of a Director with Paul Halpin, who, together with his wife, made conscious decisions while developing a successful business and serving on the board of multiple organisations.

Paul is an accomplished Non-Executive Director and Chair of Audit & Risk. After 25 years at PwC in Europe and South Africa and eight years as an entrepreneur based in Mauritius, Paul became a portfolio Non-Executive Director in 2012. Based in Mauritius for almost 20 years, he serves on listed company boards in India, East Africa, and Mauritius. Paul is most comfortable with complex and challenging corporate issues, drawing upon his advisory, corporate turnaround, and audit experience with PwC and what he learned during his entrepreneurial journey.

“One had to dream of the possibilities of working overseas”

Paul remembers entering the workforce in the early 1980s during tough economic times. There was a global recession, an oil crisis going on, and being based in Ireland he could only dream about an international career. Now, Paul looks back fondly on his “young dreamer” self, knowing how surprised that dreamer would be by the global path of his career.

Paul counts himself fortunate to have secured a job with PwC that opened doors for him overseas. From his base in Dublin, he agreed to a posting with PwC in Johannesburg in the 1990s. Nelson Mandela was President, and investment was pouring into South Africa. Paul considers his four years there very formative years, where he was exposed to the entrepreneurial mindset of South Africans and developed a new level of self-confidence in risk-taking. His family also got more comfortable and confident with risks, allowing him to accept a second international posting to London in the 2000s.

Yet, despite being a long-time partner in PwC, Paul says he wasn’t satisfied. Growing his comfort with risk was one thing – and putting that risk tolerance and confidence to the test was something else entirely.

“There was an entrepreneur always trying to get out”

Paul is fascinated with business successes and failures, something he says his colleagues continually note about him. So, even as he rose to partner and built a robust 25-year career inside PwC, Paul says he always wondered if he could have a viable business life outside a Big 4 firm.

In 2004, Paul had a unique opportunity to leave PwC after IBM bought the advisory business. He recalls talking it over with his wife, and together they made a big leap – moving their young family to Mauritius. Paul says they chose Mauritius because it is consistently rated as one of the best places in Africa for business, and the quality of life is excellent.

Mauritius remains Paul’s home even now. He happily recalls working for eight years in his own business, building it to the point that others wanted to buy it. He says this was a goal but also a fresh opportunity.

“After a successful exit, there’s a natural inclination to step back… but it was also natural for me to work with other entrepreneur-led businesses”

Paul notes he is uniquely able to relate to entrepreneurs. This made being approached to be on his initial two boards feel quite natural and organic for him – he recalls there being no pressure about forcing it as a next step. Instead, Paul relies on organic word of mouth and referrals to uncover new board opportunities.

“My work ethic, my hard-working time as an entrepreneur, was appreciated when I joined other people’s boards”

Paul has a strong work ethic from his years at PwC. He also understands how to work hard in one’s own business. This combination of experiences makes him unique and is appreciated by his board partners.

His independence is also an advantage. Paul comes to boards as a financially independent player, free from encumbrances on his judgement. However, from his time within PwC, Paul says he also pays close attention to how all the different independent parties on the board must work together on governance issues and ensure board effectiveness. He is always striving to show he is independently assessing something and working with his fellow board members and executives to make decisions, assess strategy, or reject proposals in a timely manner.

Paul feels this approach and this mindset earn him a certain appreciation from hard-working management teams and owners. It contributes to a positive boardroom chemistry and makes his board tenures into time he enjoys.

“Diversity is one of the lucky factors that contribute to the enjoyment”

Paul says that, being based in Mauritius, he experiences a lot of natural cultural diversity. People from India, Asia, Africa, and Europe populate the social and business scene. While many with a European background serve primarily on European boards with a European cultural majority, Paul serves on boards in Mauritius, East Africa, and India, where he is the cultural minority.

Some might find this a difficult operating position. Not Paul! He considers it a lucky factor that adds to his enjoyment of his work, as he has the chance to interact with highly intelligent people who bring a richness of perspective to the obstacles and issues they jointly face as board members.

“The commonalities are greater than the differences”

Paul says that while everyone he works with comes from very different backgrounds, they have more in common as members of a board than one might expect. Their motivations are similar in terms of getting to the best solutions. He feels board effectiveness overall is enhanced by having top talent from a multiplicity of backgrounds involved and that rather than focusing on differences, his boards just get on with it in terms of problem-solving, evaluating strategy, and doing top-tier analysis.

In fact, when discussing the characteristics of a truly effective director, Paul says emotional elements top a specific background. Being able to manage emotions, see the good in others, spot and address blind spots or biases, and set appropriate boundaries helps create an environment where boards can elevate the quality of conversations and results.

“Most people I’ve met in the boardroom haven’t gotten there by following a conventional path”

Paul says that while a board member’s resume might imply they’ve followed a conventional path, most truly exceptional board members have a deeply individual story to tell. Plus, by pursuing continuous learning, seeking connections with those from unconventional backgrounds, and embracing fresh ideas, directors can maintain and grow mental agility.

The three top takeaways from our conversation are:

1. Life is not a dress rehearsal. Focus on happiness in your life, which will help you in your directorships.
2. A strong work ethic, while remaining focused on the strategy and the long-term, will earn the respect of your colleagues.
3. Always ensure you have a financial cushion to be truly independent in your board directorships.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: The Inspiring Life of a Director appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

One of the most frequently asked questions to Better Boards is, “What does it take to be an effective Non-Executive Director?”  This podcast will shed some light on the topic.

In this podcast, Dr. Sabine Dembkowski, Founder and Managing Director of Better Boards, discusses how to be an effective Non-Executive Director with Marianne Loner. Marianne spent 35 years in an executive career in investment banking, commercial lending, and asset management in London, New York, Chicago, and Zurich with global organizations. For the past 12 years, she has served on Boards in Latin America, the Caribbean, and Europe.

“Time flies when you are having fun!”

Marianne takes her work on boards very seriously. Still, she says there’s no doubt that after a long and successful executive career, bringing her expertise to the companies she serves has been gratifying. She also focuses on emerging markets to quickly make a visible difference with ESG and economic development in multiple countries.

“If you’re in one industry, you end up having very strong content”

Marianne says that while she works all around the world, by keeping her focus on one industry – financial services – she can be more effective. She can come into a company with a deep understanding of the regulatory frameworks and how firms can make the changes needed to innovate and be truly client-focused.

“No one country has a monopoly on best practices”

Marianne explains that governance and best practices can be very different between countries, which board members who stay in one region or country miss out on experiencing. Thanks to her global focus, she can make connections and see how different policies play out in different cultural and economic environments. This gives her a unique perspective on best practices for any given firm and allows her to bring more diversity of thought and application to her board work.

“Have a clear idea what you bring to the party”

To be an effective Non-Executive Director, Marianne feels that board members should have a clear picture of what they’re bringing to the role. How are you being expected to contribute? What role do you play in the dynamics of the board, decision-making, and company culture? Marianne recommends new Non-Executive Directors spend time actively listening and gaining an understanding of the company so that they can develop an effective personal strategy for influencing and shaping decisions, strategy, and tactics.

In financial services, Marianne notes that the rapid pace of change over the last decade requires that board members commit to staying current with the latest trends and technologies. While the financial services industry doesn’t have the supply chain issues of other industries, cross-border developments, and political environments can have a major impact. Leaning on a historical perspective alone may not be enough to navigate this. However, by combining depth of experience with a deep understanding of the newest tools and macro trends, board members can more effectively contribute to long-term strategy development.

“I read the entire pack, even footnotes!”

Board effectiveness depends on adequate preparation. Marianne has seen boards where members are not reading all the materials being provided, which she feels places them at a disadvantage in their contribution. To be an effective contributor, it is vital for her to read every part of board packets, with a special focus on matters arising.

Marianne takes notes on key issues and seeks out additional conversations, well before the scheduled board session, with other board members on issues where she’s not clear or where there’s likely to be controversy. This helps her clarify what to focus on during the board meetings and helps prevent the whole board from bogging down in operational issues or falling behind when faced with a lengthy agenda. She uses her preparation process to ensure her contributions are less about quantity and more about quality.

“Hindsight is important for tackling issues that are still unresolved”

Marianne knows that the mandate for board members is to provide insight, oversight, and foresight. However, hindsight can be useful when issues aren’t resolved, provided that the whole board meeting isn’t consumed by hindsight. Marianne also sees great value in conversations among board members between meetings to ensure that key issues are being raised, that initiatives are moving forward, and that everyone is clear on what is supposed to be happening for follow-up and strategic advancement of board recommendations. While some might expect CEOs to drive these conversations, this doesn’t always happen, and Marianne finds it useful to take ownership of initiating and continuing these conversations.

The three top takeaways from our conversation are:

1. You cannot operate in a vacuum. To be effective, spend the time to build relationships with other board members and management.
2. Silence does not serve the business. Have courage and stand up for what you think is right.
3. To be effective, understand the details of the business but let management do their job so that you can keep a strategic focus and long-term viewpoint.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: On Being an Effective Non-Executive Director appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

The Board as a Team may be a surprising topic. Are Boards of Directors individuals in a group or a Team? If the Board is a team, who is on the team – the Execs, the Non-Executives, or both? The academic literature and practitioners are ambiguous about whether a Board is a team or not.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses the concept of the Board as a team with Petri Hofste. Petri was for several years the No. 1 NED in the Netherlands (according to the independent analysis annually conducted by Management Scope). After a successful career as an auditor and a CFO, she embarked on a portfolio career. She serves on leading organisations in the Netherlands. For her, it is vital that the Board is a team.

“A diverse Board means that in order to make it work, you have to work harder”

Petri opens by explaining that the difference between a Board of individuals and a team is the connection with other people, which brings fun into work. The Covid crisis highlighted that you lose that connection if you lose that feeling of being part of a team by only seeing each other through online means, electronic devices or even the telephone. After Covid, every Board needed a reset, getting to know each other again. Petri believes a Board needs to work as a team because only then do you get the creativity needed to make the best decisions. It is too late to become a team when it is most needed in a crisis. Today’s issues and transformations form a truly complex environment, and more and more Boards need diverse insights and perspectives.   Petri believes that this requires hard work because it is more difficult to understand people who are different from you. Getting members to appreciate each other is critical which requires time.

“The starting point is truly being interested in each other, as well as in the task at hand”

Petri stresses that the team concept applies to Boards, and members need to be interested in each other and the organisation and understand each other’s views. Then, a Board can come to a shared view that includes shared norms and values. In a complex environment, taking sustainability as an example, she notes that everything is new and undiscovered territory, so nothing can even be truly measured for decision making and economic goals yet. Dilemmas arise very quickly, because of all the different stakeholders, and these fundamentally affect the business model and strategies of companies. So, it is important to share views around values and laws related to the decision-making in these complex areas.

“Ensure that you focus on the right issues, and also ensure that you do not focus and do not discuss what doesn’t need to be discussed”

Petri notes that time commitments only continue to increase and increase. She has seen, for instance, how well a pre and post meeting with the Non-Executive Directors can work. A pre-meeting creates an opportunity to see what shared concerns should be focused on in the meeting, and can avoid extra discussion on things that are not the main focus at the Board but will eat into the time available. So, prioritising and ensuring the right topics are on the agenda helps. A post-meeting allows Board evaluation of whether the intentions were achieved and how adjustments might be made if it is felt there are things that need to be improved. Petri also recommends meeting informally once every quarter or so. 

“It generally works best if company secretaries really ensure to team up with the chairs”

Petri notes there are different types of Company Secretaries and believes the best way of working is for them to team up with the Board or Committee Chair. This leads to understanding what the chair wants to achieve and how they want to structure the agenda, and in this, company secretaries can be a great help. She acknowledges that sometimes there is hesitance reaching out, but as a chair, you can overcome that and make it work. The corporate governance codes that are everywhere now require at least an annual evaluation, and these should allow you to sit down and bring issues to the table and overcome any hesitance. She also points out the benefit of general requirements to do evaluations at least once every three years with an external evaluator. As a result, if there is a hesitancy to speak up within the team, an external person can help bridge that. She believes that in evaluations it is always critical that the Company Secretary is involved in one way or another.

“If you do not like being on a Board. If you do not feel connected to the other people on the Boards, how can you bring the best in yourself to that Board?”

Perti advocates the team approach because people feel more able after the meeting to make an approach to discuss one-on-one. A Board that has invested in the whole team and each other makes it far easier to have one-on-one discussions. She also feels that people need to enjoy being on the Board and feeling connected to the other members so that the best of everybody is brought to the Board. That means appreciating and respecting what every person brings to the Board and ensuring everybody can be open. She reiterates that this is critical in a crisis. In the current complex environment with huge dilemmas with sustainability, geopolitical issues, etc, there are issues that require Board members to bring their best, be open, and ensure that everything comes to the table before making a decision. Working as a team in this way is an investment that pays off on a personal level, and pays off for the team in decision making, so ultimately pays off for the organisation.

The three top takeaways from our conversation are:

1. A Board needs to invest in being a team.
2. Understanding where people come from and bringing forward the strengths of every individual as well as the strengths of the team is worthwhile. This investment needs to be on the personal and organisational levels.
3. Board members owe the companies they serve and society to bring the best out of each individual on a Board.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: The Board as a Team appeared first on The European Business Review.

When LGBT+ employees feel their employers aren’t doing enough to support LGBT+ inclusion, many are prepared to look elsewhere for organisations that do. This is one of the many stark findings from Deloitte’s recently released 2023 LGBT+ Inclusion @ Work report, which explores the experiences of more than 5,400 respondents across 13 countries through the lens of both sexual orientation and gender identity. 

The survey findings reinforce that when organisations foster diversity and demonstrate a commitment to LGBT+ inclusion, it can positively impact the lives and experiences of all employees in the workplace.   This is why boards need to recognise the importance of inclusion and move beyond lip service to ensure companies have the necessary strategies to ensure their organisations cultivate environments where LGBT+ employees and all employees can thrive.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards,  discusses the 2023 LGBT+ Inclusion @ Work report and why boards need to prioritise LGBT+ inclusion with Emma Codd, Global Chief Diversity, Equity and Inclusion Officer for the professional services firm Deloitte.   Emma leads the firm’s strategy on gender balance, LGBT+ inclusion, mental health, disability inclusion, neurodiversity, and the development and delivery of thought leadership aligned to this strategy, including the annual ‘Women@Work – a Global Outlook’ report. In 2021 Emma was awarded Honorary Membership by the UK’s ICAEW for her work championing diversity and inclusion of women 

“LGBT+ inclusion and the willingness for people to be out in the workplace is a barometer for other aspects of inclusion”

Emma explains that the 2023 LGBT+ Inclusion @ Work report is one of Deloitte’s “At Work” series of reports, and involved around 5400 LGBT+ people in workplaces across 13 countries – Australia, Brazil, Canada, China, France, India, Japan, Mexico, the Netherlands, Poland, South Africa, the UK and the US.   It is designed to give a representative view through a global lens.

Emma explains that many people who identify as LGBT+ fall into Generation Z and millennials – for example around 10% of Gen Z identify as LGBT, and in reality, possibly more. At Deloitte, over 80% of employees are Gen Z or millennials, which is an increasingly important issue. Being out at work was an important aspect discussed in the survey, and Emma points out that LGTB+ is an identity that people can choose to hide, so the more people who are out at work, the more likely the culture is inclusive. She also notes that the impact of what is known as “covering” applies also to other diversity aspects, such as neurodivergent variations. The reality is that covering means people are not bringing their whole selves to work, and if you cannot be yourself in the workplace, you are not applying yourself 100%, and you will not be fully happy or fully engaged.

“The survey shows us how important it is to LGBT+ people that their workplace is inclusive for them”

The survey revealed both positive and concerning information. Emma warns that one-third of respondents said their current employer does not focus on LGBT+ inclusion and expressed a desire to change employers to find a more inclusive workplace. This increases to half of respondents in an ethnic minority in their home country. The survey also highlighted the importance of a diverse workforce, with nearly 70% of respondents stating that it was a deciding factor in choosing a company. 

“If they are their true selves in the workplace, they’re worried they’ll be discriminated against, that they’ll be harassed, they’ll be disrespected, but then they’re also worried about their personal safety”

Emma notes that 6 in 10 respondents felt it was important to be out about their sexual orientation, and three-quarters about their gender identity. However, less than half felt comfortable being out with all their colleagues, and a further third with only a select group of colleagues.   Concerns about being treated differently, discrimination, harassment and personal safety were cited as reasons for not being open about their identity and a personal preference to not talk about it. Emma points out that nearly 2 in 10 have a concern for their personal safety if they were out about their sexual orientation, and just over a quarter are out about their gender identity. This raises concerns about employees’ psychological and physical safety in the workplace, which boards have a duty and responsibility for. 

The survey also revealed that individuals were less comfortable being out with higher-level positions, such as their direct manager (37%), HR (34%), company leadership (28%) and clients and customers (20%). This poses a challenge when it comes to reporting non-inclusive behaviours and feeling supported in the workplace.

“The importance of LGBT+ inclusion in the workplace is more important, according to this data, for Generation Z and millennials”

Emma explains that looking at Gen X, millennials, and Gen Z, there was a real difference in attitudes. According to this data, LGBT+ inclusion in the workplace is more important for Gen Z and millennials, who feel the importance of this ability to bring their whole self to work. Gen X does not see it as personally important for them. Therefore, higher leadership roles (who may frequently be older) could be failing to understand the needs of the younger generations. This was worryingly similar in different countries.

“One in 10 of respondents that experienced these non-inclusive behaviours said that they were exposed to physical aggression”

Emma references the research each year into millennials and Gen Z (over 25,000 millennials across over 40 countries). Questions are asked about non-inclusive behaviours – harassment, bullying and microaggressions.   42% of respondents (very similar to the Women at Work data) said they had experienced these behaviours. Emma notes that the data is subjective but shocking that just under half of those who experienced those behaviours are certain they experienced them as a result of their sexual orientation or gender identity. A further 37% strongly suspected it to be the reason, and over 80% of those strongly suspect that it is a result of how they identify.

The most common non-inclusive behaviours encountered were microaggressions, again, very similar to the Women at Work report data. The frequent definition of microaggressions is often unintended, seemingly small behaviours that adversely impact somebody – so comments of a sexual nature, unwanted jokes about the way they identify, what was probably previously called workplace banter. Emma explains that the impact these microaggressions have on people and how excluded they feel is very significant. Most concerning was that one in 10 respondents that experienced these non-inclusive behaviours said that they were physical aggression, believing this is because of how they identify. Reflecting perhaps the data on how many LGBT+ people were comfortable disclosing at work, 43% of those who experienced non-inclusive behaviours did not report it to anyone. Not their employer, not HR, not to anyone. Why? 39% said they thought reporting it would worsen the situation, and around one-third had no confidence that action would be taken, or were concerned about adverse career impact.

“Do you know how many of your employees actually are willing to give you their personal data in the first place?”

Emma points out that some organisations are doing an amazing job, making LGTB+ inclusion a priority, talking about it, educating, and demystifying. Boards need to consider self-identification and whether there has been a voluntary self-ID campaign. Do you know how many of your employees identify as LGBT+ or are willing to give their personal data at all? Employee resource groups are really important, but it is not their job to fix anything from a DI perspective, that is the board and management committee’s role. An ERG enables people to spend time with others to share experiences and help advocate any change where needed. Emma maintains that every board member should be a visible and vocal ally when it comes to LGBT+ inclusion.

The three top takeaways for effective boards from our conversation are:

1. This is important to your business.
2. For one day try not referring to your partner by their pronouns to see just how difficult that could be for somebody who cannot be out at work, and therefore the impact on their performance.
3. Understand that culture is everything, and doesn’t just impact LGBT+ inclusion. It impacts everything – and boards have a responsibility here. Try and understand how your people are feeling, what they are experiencing, non-inclusive behaviours and what needs to happen to deal with them properly.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: The Retention Factor – Why Boards Need to Prioritise LGBT+ Inclusion appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

So much of the global discussion of corporate governance focuses on the major themes – ESG, sustainability, stakeholder rights, executive pay, and government regulation. Yet corporate board members on the boardroom front lines often wrestle with basic but crucial issues of “boardsmanship.” How do the well-meaning, part-time amateurs on a board meaningfully direct and monitor a complex business operated by full-time professional managers? Are we demanding more tactical oversight from boards than they can realistically deliver? Has the “Board of Directors” model become a dangerous anachronism?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses governance with Ralph Ward, who is an internationally recognized speaker, writer, and advisor on the role of boards of Directors and the future of governance worldwide. He is publisher of the online newsletter Boardroom INSIDER, the worldwide source for practical, first-hand advice on better boards and Directors, and he also edits The Corporate Board magazine. He is the author of six books on boards and governance.

Key statements

• “The corporate board model is the worst way of monitoring a large enterprise, except for everything else we have tried”
• “Small adjustments can yield significant improvements”
• “Work with the company secretary and their staff, who are the ghosts in the machine”
• “One of the leakiest areas for online security and data theft are the outside board members; they’re a loose cannon”
• “Intelligent, savvy people know what they’re doing, but the Board of Directors model collectively makes them dumb. It makes it difficult for them to come in, hit the bricks running, and know what to ask”
• “There is very little training on how to be an effective board member and there is almost none on how to be an effective board leader, a Chair – and that’s very dangerous”

The three top takeaways from our conversation are:

1. Being on a board is not the ultimate feather in the career cap. Check whether you know what you’re really getting into and are ready to take on the commitment, liability, and regulatory dangers (especially for a major public company).
2. Ensure you have the time commitment. People at the corporate level on a Board of Directors are good time managers, yet they always underestimate the time and effort involved in taking on a board role. Take whatever seems like a reasonable amount of time – and double it.
3. Keep communication. Please do not leave the board meeting and not think about it until you get ready for the next board meeting. Assume once you’re on a board, it’s one more job you’ll have to weave into your busy schedule.

Please contact sabine.dembkowski@better-boards.com for a copy of the full text blog.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Governance – Are Boards Part of the Problem or Part of the Solution? appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

The boardroom is a desirable place, and after a successful Executive career, many wish to embark on a portfolio career and serve on boards. Programmes that promise participants a seat at the table have sprung up worldwide – but not participants all make it. What does it take to make it in the boardroom?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses making it in the boardroom with Imran Saleem. Imran has been an Executive Search Consultant with Egon Zehnder in the Middle East for over 16 years. He works extensively with private and public sector clients across various topics, including Board consulting and advisory, succession planning, leadership assessment, development and coaching, and executive search. Imran has worked with the region’s leading banks, family businesses, and other government-related entities. He also leads the Board Practice and co-leads the Financial Services Practice in the Middle East. 

“It depends on either the experience or the wisdom that they bring to the table”

Imran explains that Egon Zehnder places individuals on boards globally according to client needs. Their selection process focuses on two groups ideally placed to join boards. The first group consists of individuals with specific qualifications or high-in-demand characteristics, such as boards prioritising diversity, seeking women or ethnically diverse individuals, or requests for individuals from specific geographic regions, such as Asia or North America. Imran explains that the Middle East presents a unique category, as connectivity within the right circles is crucial due to the region’s prevalence of government-related or family businesses.

Individual experiences and wisdom characterise the second group of people. Imran explains how individuals with relevant experiences as CEOs or CFOs bring a lot of credibility to boards with their strong financial acumen, understanding of risk, and broader strategic knowledge. They are well-suited for roles such as Audit or Risk Committee Chair. He notes that CEOs bring a unique perspective, as they have experienced similar challenges and can empathise with the existing CEOs and C-suite. Their experiences in navigating technology changes, transformations, and organisational structures make them valuable in understanding the current state of the host company and where it needs to go.

Imran notes that while candidates from service backgrounds are still good candidates, boards may prefer individuals with real operational experience.

“The process of narrowing down candidates from a long list to a shortlist isn’t always driven by logic”

Egon Zehnder has been in the Middle East for over a quarter of a century. In his 16 years with the company, Imran has learned that various factors influence decisions when narrowing down a long list of candidates. It is not always logical and can include factors such as the candidate’s representation on paper, clients’ perceptions and feelings towards a particular company, and their understanding of its operations. Imran believes it is an art form. Individuals are included on the long list because there is faith in their potential to deliver and be effective board members. Egon Zehnder is responsible for advocating for them to make it to the shortlist.

Imran also notes that his company prides itself on a reputation for lateral thinking and brave suggestions. They strive to go beyond the traditional cookie-cutter approach of selecting board members who have simply replicated their past experiences in other companies. Instead, they aim to be creative in advocating for individuals with unusual backgrounds. Their task is to consider candidates from the broadest possible pool. 

“They need to help the management look around corners.”

Imran points out that different boards may have different success factors and requirements based on whether they are a family board or publicly listed. However, he believes that incoming board members need to develop a reputation for asking good questions and providing good answers. Effective board members should look for ways to help the company avoid traps and anticipate challenges. They should encourage management to think big and be ambitious by asking the right questions. They should not provide all the answers but offer guidance and allow management to develop their solutions. 

“The demand for good board members is extremely high”

Imran explains that they often look for board members from FTSE and DAX, but it is not just about where the companies are listed but also how they operate. For boards in the Middle East, board members from global companies with experience in emerging markets and different geographies are most sought after.

Middle East boards are becoming more sophisticated due to the demands and aspirations of the companies and entities they oversee. This includes government-related entities and family businesses that now have global aspirations. As a result, there is a high demand for competent board members. To be successful in the boardroom, these members must bring tested judgment from their prior board or executive roles and then demonstrate this in making decisions on important matters such as investments, mergers and acquisitions, and transitioning between public and private ownership. They must also possess the ability to provide constructive feedback to the Chair and management in a way that encourages positive actions. Imran notes that these behaviours are not easy to master.

Culture plays a significant role in the region, particularly the Middle East and GCC culture, which people must respect and aspire to. However, boards and companies seek individuals who bring international thinking and best practices. It is important to note that in some cases, there may be unclear boundaries between ownership status, ultimate shareholders, the board, and the management, especially in family businesses. Board members must be able to navigate and operate within these dynamics, which differ from Western boards, where these alliances are often more clearly defined. 

“Companies should not hire a board director when a consultant or advisor can fulfil the role”

Imran outlines the Egon Zehnder view that companies should not hire a board director when a consultant or advisor can fulfil the role. Specialist insights can be obtained through advisors, managers, or by creating an advisory board, and the main board should consist of individuals who can contribute to a wide range of topics rather than being focused on a specific area. The main board should be represented by individuals who can discuss many topics, as the focus of hot topics may change over time. For example, having a CEO, CFO, or other individuals with relevant qualifications on the board may be more important than having someone with a narrow focus. However, this may vary for specific technology companies.

The three top takeaways for effective boards are:

1. Make sure you practice good judgment. Good judgment always comes into play whether a board is looking for a board member or aspiring to be board member.
2. Bring curiosity and insight to ask the right questions versus giving answers.
3. Always hire to contribute to a broader board across various topics and hire consultants where specific expertise is needed.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: On Making it in the Boardroom appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

The landscape of employee relations is changing, particularly in office environments with flexible working. There are many different opinions about how organisations should approach their policies while representing their employees’ diversity. The subject of employee engagement sounds simple, but is it?

In this podcast, Dr Sabine Dembkowski, Managing Partner of Better Boards, discusses board futureproofing with Louise Hardy and Kevin Maguire. Louise is Non-Executive Director at FTSE 250 company Crest Nicholson, where Kevin Maguire is General Counsel & Company Secretary.

“There really is nothing like sitting in a room with people”

Louise opens by saying that boards get a lot of data-driven, paper-based information about how employees are feeling and thinking, from surveys, for example. But nothing beats having these conversations face-to-face to tease out the issues, bouncing thoughts and ideas off one other. She believes it gives a richness of direct feedback for employees to engage with an independent Director who brings learning and insights into the boardroom. 

Kevin points out that employees are key stakeholders in a board’s deliberations, and there is more than one method of employee engagement that satisfies the corporate governance code. They have both found that a designated non-executive director approach with employee meetings is the best for board effectiveness.

“Don’t manipulate who attends”

Louise relates that at Crest, they have established visits to all regions, business units, and head office, aiming to engage with a diverse range of individuals. Given that the organisation is both site- and office-based, it’s crucial to include representatives from different departments, workgroups, and stages of their careers – from newcomers to those with 20 years of service, to enrich discussions. They do not dictate who attends these sessions and often rely on volunteers.  

Board attendance at these sessions consists of Louse as the designated workforce engagement representative and the Group HR Director. This is beneficial because many of the concerns raised may already be addressed through ongoing process and procedure enhancements, and having the HR Director present allows for immediate responses. Engagement is key during these sessions, so to avoid distractions like notetaking, a third party is present to note key points and relevant issues that arise.

“The more you can get people to open up, the more others will open up”

Louise outlines the “house rules,” which are seldom altered. She initiates each meeting by emphasizing the freedom to express oneself (Chatham House rules, where no statement is linked to a specific person). She explains they are conducting a comprehensive review of the organisation to identify common concerns. These collective issues will be presented to the executive team and the board.

A significant part of the process is the atmosphere in the room, and she aims to foster an environment that naturally helps people gradually become more comfortable as the meeting proceeds. It is a gentle, open, and discursive approach, probing into people’s feelings. Louise also notes that, at times, someone from one region voices a concern or praises something, and another person from a completely different department/region resonates with it. This triggers a flowing and expanding dialogue. Over time, people have realised there will be no negative consequences of speaking up in sessions, and people feel it is a safe space where issues raised will be addressed within the organisation.

Kevin notes that the effectiveness of engagement sessions largely depends on how they are initially set up. After conducting these sessions for several years, there’s a certain momentum and rhythm, and people clearly understand what to expect. Even those who don’t attend know what transpires during these sessions, creating a certain reputation around them.

He suggests beginning simply for those just starting to look at employee engagement, especially if there are resource or time constraints. While it might be ideal to have a representative from every business unit or to hold different meetings for complex groups, starting small is no harm. You can start with just one representative from each business unit or a sample of employees, hold a first meeting, see how it progresses, and gradually build on this, making adjustments as you proceed. This approach also helps build employee confidence about what they can expect, rather than presenting something so big and significant at the outset that no one is quite sure how to approach it.   The advice is to start small and keep it simple.

“Treat the employee engagement subject like a board Committee”

Kevin explains how the role of the company secretary can differ from one organisation to another. Still, as Company Secretary at Crest, he is crucial in ensuring corporate governance and code compliance and that the chosen engagement method meets these obligations.

Company Secretaries can also provide additional input and guidance as needed, as their role extends to sequencing the outcomes of these meetings into boardroom discussions and the boardroom agenda. Crest finds it effective to treat the topic of employee engagement like a board Committee during board meetings – so as Committee Chairs provide updates at most meetings, Louise provides updates on recent employee engagement progress and outputs as if it were a separate Committee. During board meetings, he and Louise often refer back to specific feedback items that may be relevant to the ongoing discussion. This is a reminder to keep an eye on employee feedback and how it can contribute to board debates, much like many other topics discussed around the board table, as they assist the Chair in managing the agenda and debate. 

“Information is just information. You do need to do something with it”

Louise explains how she and the HR director have established a reporting structure. They conduct 3-4 meetings annually, covering all regions twice, for 8-9 meetings. During these, they identify the main topics; typically, some issues will be more prominent and widespread, affecting the entire company. After the sessions, they both review all the issues and identify the top 5 or 6, which are usually the most significant and impactful. These key issues and recommended actions are presented at the board meeting, usually after discussion with the CEO beforehand, and often with agreed-upon actions. Below these, they list the smaller, more localised issues, which are not ignored but are expected to be addressed by the senior management team.

Kevin notes that the executive team may not always concur with every point raised during the employee engagement sessions, and it is not the board’s role to address each comment. However, trends can be identified by maintaining records and monitoring issues over time. A single comment may not gain traction initially, but if similar sentiments surface repeatedly over a few months, either from the same or different divisions, it prompts re-evaluation, as a recurring theme could indicate a deeper issue that needs to be addressed.

Louise explains that they do not record the sessions but rely on notetaking. As the independent Non-Executive Director, she aims to be fully engaged in the meeting, making minimal notes to ensure everyone feels heard and not singled out. After the meeting, she immediately identifies the main points, and Kevin explains that these are condensed into a 1- or 2-page summary for the subsequent board meeting. This concise format is easy to digest and allows focus on the key points from the recent session – plus, it aligns with the updates provided by other Committees.

The three top takeaways from our conversation are:

1. Do not put off getting started because it is so beneficial and really worth the time and effort.
2. It becomes easier if you start small and then build up from there, so you will quickly find a rhythm that will work for your organisation.
3. It’s not that difficult talking about the tough subjects – they come up in the natural course of the discussion, so it is pretty easy to get those aired.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Building a Successful Employee Engagement Process appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Risk identification, ownership, and monitoring sit at the highest levels of organisations and are the ultimate responsibility of a firm’s board of directors. We hear much about ESG but focus on the E and S acronyms, i.e.,  ‘environmental’ and ‘social’ aspects. However, risks arising from the ‘G’ – governance – should be at the forefront of directors’ minds. But what do we mean by the term governance risk, and how can it be effectively managed?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses managing governance risk with Liz Lynxwiler, Company Secretary at Brightwell Pensions.

“One of the key governance risks is around decision making”

Liz explains that governance risk is wrapped up in many other risks, but the first step is to define what governance risk means for your organisation. In her experience, one of the key governance risks is decision-making and unclear roles and responsibilities, usually when delegations and powers are not sufficiently identified and defined. This can result in decisions being made by individuals, groups, or forums lacking the right (or any) delegations in place. One of the main benefits of a robust governance structure is to ensure that boards maintain sufficient oversight of management and the business’s day-to-day activities. If individuals or groups are acting outside of their powers, it deprives the board of the opportunity to challenge decisions or courses of action. There is also compliance to consider for firms that are heavily regulated, listed, or public interest entities. Liz emphasises the risk around ensuring that the board can meet the stakeholders’ expectations, whether they be shareholders, regulators, or the government. As with any risk, boards need to ensure the right controls are in place to mitigate the likelihood of any risk developing, and governance professionals, in particular, act as one of the most important controls around governance risk. 

“It’s very easy to hide key information in a 30-page paper”

Liz believes that one of the key things (and a by-product of how the UK corporate governance framework operates) is the natural information asymmetry between the board’s non-executive and executive directors. A non-executive by proxy is not involved in the business’s day-to-day activities, so they need to lean on their governance teams to ensure management information provided for meetings is on time, clear and concise. If boards are given insufficient time to read papers before a meeting, it is very easy to lose key messages. She explains that at Brightwell, they work systematically through management information to ensure they provide data as clearly as possible. They continue to evolve that information and recently changed their approach to reporting, asking those contributing to board or committee reporting to think critically about what they would want to know if they were sitting outside the business but still responsible for it. The result has been management information that tells a story rather than just reporting.

“Board Papers are a sticky issue, regardless of how much is written about them”

Liz agrees that board papers are too long, and she outlines the tension between the business wanting to tell the board everything and the board just needing the information that is relevant and clear enough for them to challenge. Every company secretary and director she speaks to agrees this is a key issue. Simple things like executive summaries are key. Brightwell has done a lot of Report Writer training and treats the executive summary as an elevator pitch with only a minute or two to get key points across. Why is this coming here, what is important about it, and what do you want to get out of it? They also take time at the end of meetings to reflect on the meeting itself and the management information. Was it the right information? Too much or too little? What would they like to see more (or less) of next time? Liz explains it is always an evolving process.

“In reality, the risks are owned by everyone”

Liz believes that governance risk is one of those rare risks jointly owned between the first line and the board because, ultimately, governance risks sit with the board, and it is up to them to maintain oversight of what is happening on the ground. In the division of responsibilities, executive management should monitor and manage the risks regularly and escalate them as appropriate. The board works with management to determine the appropriate level of risk and probes the executives on how they manage that on behalf of the board. Liz explains the three types of governance risk. Firstly, enduring risks that remain static and vary from firm to firm. Secondly are point-in-time risks, which will impact the firm and crystallise and fade away. Lastly, emerging risks may be far on the horizon but potentially a big issue for the firm.

“How do you ensure that all of these topics received sufficient attention on the board agenda?”

Liz advocates starting by assessing the importance of a topic for the organisation, its relevancy, and its likely impact. If it is crucial, it needs sufficient time on the agenda. If a particular issue or topic needs a deep dive, it could be delegated to a committee for more in-depth information or probing before escalating it back to the board. Standalone deep dive sessions could also be set up on a particular topic that needs sufficient time but doesn’t necessarily need to form part of a formal board agenda. 

“It’s our responsibility as governance professionals to monitor what the board needs and to work with the business to make that happen”

Liz explains that sometimes there will be topics that need training on, particularly areas around corporate governance changes, but governance professionals act as a facilitator between business and board. Because they are in every meeting, they know what the board members are asking and whether there are gaps. She recommends getting feedback from the Chair and members directly.

The three top takeaways from our conversation for effective boards:

1. Be open.
   Feedback is the breakfast of champions, and sometimes it can be difficult to receive feedback on processes or ways of working that the business has spent a long time building up. But one of the best ways to build trust and strong relationships with the board and other stakeholders is to really listen and take action on areas that might need improvement.
2. Don’t shy away from being bold.
   If there is an opportunity to be more efficient, take it. Just make sure there are clear parameters and adequate checks and balances around any delegations.
3. Trust your governance professionals, who are there to give boards and management impartial advice on how best to maintain the integrity of the governance framework.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on  Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us.

The post The Better Boards Podcast Series: Managing Governance Risk appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Despite living in an era of rapid technological advancements, ground breaking discoveries and instantaneous global communication, the World Economic Forum predicts it will take 132 years to close the global gender parity gap.

This stark assessment underscores the need for boards and organisational leadership to focus on implementing policies and cultivating organisational cultures that enable women to thrive. Deloitte’s ‘Women@Work: A Global Outlook’ report, now in its third year, looks at the views and insights of the world’s working women. The report paints a deeply concerning picture. Despite some improvements, an overwhelming number of women are experiencing burnout, challenges with hybrid working, and non-inclusive behaviours in the workplace. The stigma around mental health persists, and women are struggling to balance mounting domestic loads and increased pressure to be “always-on” at work, while many are also facing challenges with their personal health and worried about their futures.

As organisations around the globe seek to attract and retain top talent, there remains a critical need to dismantle age-old societal and cultural barriers, challenge biases, and forge a new path toward a more inclusive, equitable future. As board members, it is vital to understand these challenges and ensure strategies are in place to ensure your organisation cultivates an environment where its most valuable assets—its people—can succeed.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses the Women @ Work report and what it means for board members, leadership, and anyone working to drive change and achieve true gender equity in the workplace with Emma Codd, Global Chief Diversity, Equity, and Inclusion Officer for the professional services firm Deloitte. Emma leads the firm’s strategy on gender balance, LGBT+ inclusion, mental health, disability inclusion, and neurodiversity, alongside the development and delivery of thought leadership aligned to this strategy, including the annual ‘Women@Work – a global outlook’ report. In 2021 Emma was awarded Honorary Membership by the UK’s ICAEW for her work championing diversity and inclusion of women.

“The findings are deeply concerning, when it comes to the actual ability to attract and retain women”

Emma starts by highlighting that the third Women@Work report is representative across 10 countries and 5000 women within the workplace in Australia, Brazil, Canada, China, Germany, India, Japan, South Africa, the UK, and the US. Results were “deeply concerning”. Many countries have targets or quotas for the representation of women on boards, and data shows that diverse businesses perform better, but to meet those targets, you need to attract and retain women. 

Boards need to know about this, as unless the business is retaining high-performing women, it cannot meet those targets or quotas. She feels that to get to executive level, women have to have been an employee and stay, but many women are saying they don’t want to stay with their employer.

“That is an improvement, but I hate using the word improvement because it feels wrong to be using it when the data that sits under that is still so concerning and is still so poor”

Emma describes how last year, the report found some very shocking, deeply concerning data around three areas – burnout, non-inclusive behaviour, and hybrid working exclusion. Also, women reported not having enough access to senior leaders and sponsorship. Things have improved this year in these three areas, but Emma emphasises this improvement is from a very poor position. Last year about half the women polled said they were burnt out, six in ten experienced non-inclusive behaviours, and around six in ten had been excluded while working in a hybrid way. This year,  just under a third of women say they are burnt out, 44% have encountered non-inclusive behaviours, and 40% have been excluded while working in a hybrid way. So, although Emma acknowledges improvement, it is still not a good picture. 

“These women are encountering these behaviours, and under half of them are actually not reporting it to anybody”

Emma explains that non-inclusive behaviours are microaggressions or harassment. Microaggressions are often unintended, seemingly small behaviours that exclude an individual. They include jokes at someone else’s expense, comments about how you identify, etc. The challenge is that while these may be unintended, they can deeply impact the individual, particularly when it happens for a prolonged period.

44% of the women surveyed have experienced at least one form of behaviour in the workplace in the last year that is simply unacceptable, mostly microaggressions. One in ten women in the last year moved from their employer because they had experienced microaggressions or harassment. Emma believes this is either because people are just not educated, don’t understand, fail to fully understand the impact, or simply think that they can say and do these things. She stresses that when someone experiences this sort of behaviour, they must feel able to talk to somebody or report it. More women reported them last year, but it is still less than half, and with so little reporting, that behaviour will continue, and then women will often effectively make the choice to leave. 

“The challenge, though, is that you when you don’t know if there are a low number of reports, you don’t know if that’s because people simply aren’t reporting”

Emma notes that the top reason for not reporting is that women didn’t feel it would be seen as serious, or that it was serious enough to warrant reporting. That has to stop. Usually, the relevant executives, such as the Chief DEI officer, should be in front of the board regularly and disclose how many reports of non-inclusive behaviour there are. When things go horribly wrong, people often go to the media or onto social media because they feel this is the only option left to them. They either tried reporting internally or had been too worried to report internally. So that reporting process and mechanisms are extremely important. Deloitte has respect and inclusion advisors, an important cohort of senior individuals for people to go to, enabling people to speak up. 

Education is also important, Emma says, especially education around microaggressions. Regardless of how senior someone is, you need a plan in place because this can go public very quickly, and we all know the impact that can have on an organisation. From a governance perspective, Emma advises that boards get to grips with this and spend time with the executive responsible for it, understanding what data means and how people are actually feeling.

“For over half of the women, we polled their mental health is a top concern”

Mental health and issues around menstruation and menopause are impacting women in the workplace, Emma says. From a mental health perspective, the data last year was so high that despite that improvement, it is still deeply concerning.

Mental health was a top concern for over half the women polled. Around a third are burnt out, and their stress is higher than a year ago. Emma describes one worrying issue that has significantly worsened from last year – the term “always on.” Only a third of the women polled said they feel they can switch off from work and need to be able to access support, yet only four in ten women say that they get adequate support at work for mental health. A quarter feel comfortable talking about mental health at work, which is significantly down from last year but only a quarter give the real reason when they take time off for mental health.

Emma recommends that good practice for organisations is to normalise the conversation about mental health and, from a board perspective, ensure the organisation has an employee advice programme (EAP). Senior leaders being open about their own experiences of these issues makes a real difference for people suffering in silence. To be an employer of choice, a successful business, this is something that can’t be ignored.

Emma also notes that the deeply personal issue of menstrual health is an issue for businesses to consider. When asked if they suffer pain or symptoms from menstruation or menopause, almost a quarter of the women said they do. So once a month, or longer for, women in menopause, they are suffering from adverse symptoms associated with a normal part of life. This can cause intense pain and symptoms, yet they do not take time off, which is a real issue with real stigma that we have to break down. Interestingly, women are saying they want policies that recognise the impact of menstruation and menopause on so many. Emma explains that the data for menopause is better than for menstruation, and only one in five of the women polled who are in menopause said they did not take time off. There are higher disclosure rates, possibly because of more workplace conversations. This is important for boards because, unfortunately for many women, it takes them longer to get to the top of a business and longer to get onto that board. For many women, it coincides with hitting menopause, and the symptoms are debilitating for many women. The conversation around this needs to be normalised so that people suffering from these things feel able to say so and access support. Unfortunately, the data tells us that it is just not happening enough.

“I am a big fan of talking about things”

Emma explains that board members need to understand the processes in place, talking to the CHRO and DEI lead. She advises that every organisation has two separate roles doing because they are fundamentally linked to each other but both distinct areas. She also strongly advocates normalising the conversation in exactly the same way as with mental health. Sharing experiences of senior women is a huge benefit. She believes that just talking about issues can have a significant positive impact.

The three key takeaways for effective boards are:

1. Gender equality is a matter for boards. This is not something that is a “nice to have” but a business imperative.
2. Look at the results and data of the report, as within it are a small number of women that work for companies getting it right.
3. The report provides the insight needed to ask the questions you need to ask within the organisation and make sure that you are able to make those targets and quotas.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on  Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or for more information on Better Boards’ solutions, please email us at info@better-boards.com

The post The Better Boards Podcast Series: Gender Equality in the Workplace Starts at the Top appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

AI and generative AI are capturing the headlines. We know it will bring an era of rapid change, new opportunities, and new risks. The cost structure of expertise and repetitive tasks will shift fundamentally. Existing security protections against spoofing and phishing are now vulnerable, and employees are wondering what it all means for them. Developers of Generative AI are acknowledging the risks and asking governments and companies to lean in on regulation, governance, and controls. So what should boards and directors be thinking about all of this? And more importantly, what should they be doing?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Director of Better Boards, discusses the implications of AI with Karen Silverman. Karen has dedicated her work to the practical aspects of technology governance, strategy, and policy and how it intersects with corporate governance. She is a member of the World Economic Forum’s Global AI Council and a WEF Global Innovator, a member of McKinsey’s External Technology Council, an advisor to the Business Roundtable, and a technology expert on the California Supreme Court’s Blue-Ribbon Commission on the Future of the Bar Exam.

“It needs to get put on the agendas as a deliberative item”

Karen starts by explaining that there’s a lot of talk and inquiry from both the board and management. At the existential level, these technologies (and particularly the newest) are likely to impact cost structures across the business dramatically. How we value and pay for expertise and automate repetitive processes will change to have both cost and revenue impacts. If the issue is not on the agenda yet, it needs to be put on those agendas, not as a reported item, but as a deliberative item. Then boards are encouraged to get informed, ask questions, and interrogate management about the use of the technologies, the impact on business, and new categories of security risks. She cautions that for board effectiveness; these questions need to be discussed as part of the strategic conversation, not just in a compliance conversation. Thinking about it as integrated into the rest of the business is a good start.

“Start giving them access to resources, both internal and external”

Karen says that the first thing boards can do is start giving themselves and others access to resources and have someone keep an eye on technology. She notes that it is tough to keep up at a broad landscape level, but which technologies will impact the business needs to be identified. Some contextually relevant sources of information need to be created that boards have access to – both when they’re operating in committee and when questions arise in the course of business operations. This is not necessarily an internal organisational function. It could very well be an external resource that needs to be assigned.

“The rates of uptake create some urgency, but also it’s creating a level of anxiety”

Karen feels the urgency around AI is a by-product of how quickly these new technologies are coming online and being integrated into workflows. Chat GPT, for example, had 100 million users within a few months of its release. So incredibly high numbers are experimenting with it, learning to use it, learning what it does well and what it doesn’t, and how to manipulate it. Rates of uptake create urgency but also create a level of anxiety within the workforce and customer base that needs to be dealt with, whether this is warranted or not.

Karen explains that it creates a risk of disinformation and an “authenticity crisis.” We make assumptions about what is authentic and what is not, primarily based on what we see and hear. Now what we see and what we hear is going to be easily spoofed and replicated by these tools, which will cause a period of very uncomfortable uncertainty about relying on information sources that were previously reliable. All this will be disruptive to how business gets done and threaten the productivity of teams that are finely tuned for worlds where this is not a problem. This is, Karen believes, what is generating the current focus and sense of urgency.

“This belongs in the category of strategy and risk management as much as it belongs in the category of compliance”

Karen believes that boards need to ‘lean in’ to the issue. It needs to be on the agenda without waiting for management to decide it needs to be there and add it. Boards need to lean in and ask questions about where these technologies are being used within the organisation, for what purpose and to what end, and what is being done to defend against foreseeable risk. Boards must understand that this belongs in the category of strategy and risk management as much as it belongs in the category of compliance, which is how many organisations have been treating it up to now. Too many organisations are waiting and watching regulations develop across the world, to see what will be required. But businesses have to do things, make decisions, allocate resources and prioritise objectives and risks, and figure out ways to do that sensibly in the context of their business. Regulations and governance are never going to answer that question.

“Every industry is struggling with this in some way”

Karen advises that to avoid being overwhelmed, boards take a step back and hear the various reports from the CFO, the general counsel about data protection, and also the report about AI. They need to ask who is accountable within the organisation for that AI report and ensure they hear it.

Karen believes boards are not always well served by management and that these issues intersect and impact one another, so ensuring the organisation’s security risks or considerations run in alignment or intention with other parts of the business becomes much more important. She feels boards and management need to integrate better.

The pace of strategic planning also needs to increase. Once a year means that what was decided 12 months ago may not be relevant anymore. The important issue for boards is to be more agile. Boards that have a strategic discussion every 2 or 3 months will be better placed to cope with the technology change rate.

The three top takeaways from our conversation are:

1. AI promises ease and efficiency, but it requires (particularly of leadership) a heavier cognitive load and more thinking, work, and questioning. Lean in to the change.
2. Consider how the values of the organisation are going to align, and guide it through periods of surprises, creating space to both deliberate and become educated.
3. Stay curious and expect change. Part of what is holding people back is processing surprise, and they need to get beyond surprise to real leadership. There is a huge role in setting the tone, capabilities, and capacity of employees and customers to manage this change.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: AI – Rethinking business appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

It is well-known that the track record for successful acquisition is poor. All kinds of studies with different methodologies generally point to the dangers of acquisitions, some claiming that as much as 70% of deals underperform.

So, if the stats are generally correct, this would seem like a massive risk for those governing the enterprise. How do they beat the odds and avoid becoming another statistic of value destruction, by presiding wisely over transactions?

In this podcast, Dr. Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses this issue with Dr. Dean Blomson, a highly experienced strategy and transformation advisor. Having previously served as a consulting partner with several global consulting firms, Dean now operates his own independent strategic advisory business and is a board director for several start-ups. He is also a part-time professor at the Sydney School of Business, teaching MBA programmes with courses in governance, strategy, and transformation.

“The bottom line is that transactions are a 50:50 proposition for most acquirers”

Dean starts by explaining how he stumbled upon governance during an Advanced Diploma in company law when he did his dissertation on an aspect of reckless mismanagement. As a consulting partner with Ernst and Young in Sydney, after a particularly spectacular transaction ‘fail’ that his team was drawn into trying to remediate, he started thinking about board effectiveness and what boards of the acquirer need to do to preside over (or provide effective oversight over) transactions.

“Failures during’ are often directly attributable to the lack of priming and the lack of preparation”

Transactions can fail before, during, or after acquisition. Dean relates that most failures before and during the acquisition phase can be attributed to a lack of preparation. Maybe the transaction happens in a rush, without proper priming at the board level, in that the board hasn’t had time to work carefully through an M&A strategy with the executive team. Or the foundational organisational work (assembling skills, teams, planning etc.) in preparing for a potential acquisition has not been adequately done by the executive. 

During the transaction phase of the acquisition, the causes of failure are also prevalent. Dean points out that once a transaction is flowing, specialist firms are often appointed to advise on legal and financial due diligence, investment banking, and tax impacts of the deal structuring. Dean believes this requires a mature, sophisticated executive team and a board working closely to ensure they get cohesive advice. He points out that this can be rare, particularly if the board itself is not skilled and experienced, and there may be a need for board development. So, building those teams of third parties needs to be done carefully, with a management team that can coordinate rather than just sitting back and waiting for the experts to tell them.

“Rush the due diligence, and you end up stepping on a whole lot of landmines afterwards”

Dean explains there are several reasons for failure during the deal-making stage of the acquisition.

• Firstly, a lack of discussion between the board and executives about the ‘go’ or ‘no-go’ decision gates, so transactions tend to drift if there is no set of non-negotiable criteria
• Secondly, and typically, the due diligence is not properly structured and/or is superficial and rushed
• Lack of coordination with and input from internal teams at the right time, catching them by surprise.

“There’s what I call a conspiracy of silence…”

Dean outlines how the causes of failure reside in the earliest stages, but issues can still arise post-acquisition. Significant cultural mismatches that were not anticipated come to light, or the integration efforts start late or are not well-coordinated or are bungled.

He notes that management, or even the board itself, can lose focus in the post-transaction phase. He warns that if it is felt that the transaction is marginal, there is sometimes ‘a conspiracy of silence’ on the benefits’ reporting and integration progress. The board needs to ensure continued attention is given to their commitments and maintain the tempo of integration.

“What is it that we’re looking for?”

Dean outlines three key areas for boards to pay attention to: 

• Firstly, they need a clear upfront strategy. Why they (executive and board) want or need to grow through acquisition, where they want to grow, how they will do so, what a perfect deal would look like, etc. Then they need to build a target list to work through.
• Secondly, boards need to pay particular attention to early preparation and planning. Have they the right skills in the boardroom and amongst the executive team? Are those skills current or have they atrophied?
• Lastly, Dean advises a proper understanding of culture. What is the executive team looking at? How will they know they are culturally compatible? The board needs confidence that the executive team really understood the cultural alignment adequately and will manage it wisely.

“Proceed with caution. That’s one of the things that boards need to do continuously”

Dean repeats that boards need to have justifiable confidence that the executive has prepared and planned well.

One thing that stands out for him about the best-performing boards is that they recognise that practice makes perfect. Starting small and learning from all prior transactions with the executive team is important. What worked, what didn’t work, what could have been done better? It becomes a deliberate capability-building exercise.

Also, the best-performing boards proceed with caution. They keep testing the assumptions of the executive team, stress tests all models, and are very alert to bias in its different forms. Boards need to be continuously proceeding with caution and informed scepticism, and working with the executives –and elicit views outside of the deal team because deal teams can often be compromised (they tend to fall in love with the deals).

“Have an engaged conversation with the chair of the board”

Dean notes that the board should encourage the CEO and the executive team to start early and engage with them about important issues such as:

• the direction and progress of the transaction agenda
• their own skills versus what is really required
• their respective responsibilities and decision-making rights (what things the executive want to have some autonomy over; and topics the board needs to have visibility of and direct input to)
• do they have an end-to-end process for how the transaction may run; and
• what are the stage gates to engage with the board?

Dean’s best advice is for the board, CEO, and executive teams to have an engaged conversation about how they will run things end to end.

The three top takeaways for effective boards:

1. Be prepared. Do the foundational thinking and preparatory work
2. Be disciplined, follow a process, and stick to the plan. If you said you’re not going past the stage gates, or this is a non-negotiable criterion, you need to stick to it. Of course, plans need to be flexible, but if necessary, understand why you need to move away from the plan.
3. Be challenging of your thinking individually and of each other.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: How do Boards Preside Wisely Over Transactions to Avoid Shareholder Value Destruction? appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Transferring a family-owned enterprise to the next generation raises complex and emotionally charged questions. A Chinese proverb states that “wealth shall not pass three generations.” The first generation builds wealth, the second manages it, and the third generation destroys it.

Founders and generations after them also have obligations to fulfill to ensure successful succession to the next generations. The challenge often arises when the next generation takes over from the founder or multiple generations who personally poured everything into the business. In contrast, the next generation tends to have less of an emotional connection to the business.

This 3-part podcast series looks at different angles at boards, governance, and related topics in family-owned enterprises. In this episode, we will focus on the next generation’s role on boards of family-owned enterprises.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses the role of the next generation with Martin Roll, a global expert on family business and family office topics and a world-renowned C-level advisor and business school educator. He mentored over 650 Next Generation Family members and understands what keeps them awake at night.

“Next Gen X-ers can bridge past, present and future”

Martin introduces how the combination between family and business is unique. The family brings values, legacy, passion, entrepreneurship, and, first and foremost, very personal involvement to business. He believes that the next generations in family businesses can play the roles of change agents and have three distinct roles to play. They can work in the business, serve on the board (or supervisory board) and/or become a responsible owner. Naturally, these different roles can change over time, and often someone might start to work in the business when young, later serve on the board, and eventually be an owner of the business, for example. But Martin notes that involvement needs to fit with their personality, skills, and interest because this is a long-term commitment. Overall, he believes the role of the next generation is renewal, and to be the voice of the new generation, modern customers and competition. They understand the legacy because they are family, but they can be change agents to make sure the family enterprise continues being successful. He notes that younger entrants to the business should bring as much as possible to the table and essentially be the ‘new voice’ with a global outlook and savviness in digital and technology. Next-generation leaders should question the established norms and structures, but he cautions that coming in, you do not need to create a revolution in the firm but to ensure constant renewal and fit for purpose.  

“Make sure you clean up the shop in every generation, don’t pass on the laundry”

Martin believes bringing Next Gen family members into the business starts with creating the invitation to join or to be involved. This can be difficult, with different expectations and possible tensions across generations. The senior generation in succession planning needs a protagonist to allow the Next Gens to have a voice, opinion, and perspective.

He notes some stumbling blocks for the Next Gen, such as their mandate, role, authority, and autonomy. He cautions that the issue of when to step aside and a retirement date can be very difficult for seniors. Only 15% of family businesses worldwide have a plan for succession in place, and yet it takes at least 5-7 years in most cases to do succession. This is where boards have a huge role in mediating, asking sensitive questions, guiding, and nurturing succession over time.

Martin notes that succession is not a standard formula because every family is unique with their own. There needs to be a resolution of current tensions, unsolved issues, ownership disputes, etc, so they are not passed on to the next generation. 

“Outside directors on family business boards have a huge role to play”

Martin outlines the role outside directors have as directors of all generations – not only the senior generation on the board but also the younger generation coming in. They can provide mentorship and facilitate, creating a formal and informal relationship with the Next Gens entering new roles. This is because outside directors lack the family biases and tensions, and although aware of the family issues, they can act as an independent voice to help communicate across the generation gap if one exists. They can also be a toolbox for board work, compliance, governance, and best practices and inspire the Next Gen.

The three top takeaways from our conversation are:

1. Succession is one of the most complex matters in a family business, so planning should start early to ensure the next generation is in place when needed and desired.
2. Remember that next-generation members bring renewal, so directors can influence how to integrate them, onboard them and help to mentor them.
3. The next generation brings continuity, and they are the ones that will make sure the legacy carries on. The board should help the long-term competitiveness and relevance of the family business and help to unlock that passion.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: The Role of the Next Generation on Boards of Family-Owned Enterprises appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

So much is written and said about what it means to be an effective Director. However, most are with listed organisations in mind. We aim to readdress the balance with this three-part podcast series on family-owned enterprises. In the first episode, we looked at “The role of boards in family-owned enterprises.” In this episode, we will focus on how to become an effective Director in family-owned enterprises.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Director of Better Boards, discusses this issue with Martin Roll, a global expert on family business and family office topics and a world-renowned C-level advisor and business school educator. He mentored over 650 Next Generation Family members and understands what keeps them awake at night.

“As much as you can observe governance, it’s a little more irrational in nature”

Martin points out that being an independent Director on a family business board is the same as being on a listed board, but a few things need to be viewed very differently. This is because an enterprise owned by a family is frequently one with many emotions involved, as the legacy is at stake, so in many ways, governance is often “a little more irrational.”

An independent Director can add much value here, bringing transferable knowledge, skills, and experiences to the family business board. An independent Director will also need to absorb a great deal. The presence and the influence of the family can be quite substantial, and although there may be other professional outside Directors, there may be many family members. All of the family intricacies and dimensions may be absorbed, but outside Directors should never forget what they bring, stand for, and the impact they can have.

“You need to care for the business family and the legacy”

Martin explains that an outside Director needs to be motivated, enjoy the industry and have the right fit and skills, and have some chemistry with the family. The advice given to the board may be different than a listed business board, as a family business board needs to take a more long-term view because business families often have an intergenerational time horizon. In contrast, on listed boards, the view is weeks, months, or quarters.

However, family-owned businesses think very long-term because they may want to hand over the business to a younger family member, so a generational shift is taking place. Purpose also matters because many family businesses are based on strong beliefs, values, and perhaps even an overarching purpose.

Martin also feels that before joining such a board as an external Director, you really need to understand and identify with the business family and legacy. However, it is not necessary to fully agree with it because the role is to bring an independent view.

“I’ve got a title like God. I’m sitting on the board”

Martin explains that the initial fit of a Director to a family board must be done professionally, with proper due diligence. Governance structure may also differ from a listed organization, with more dotted lines and more subtle informal communication to be navigated. With more emotions involved, external Directors may become more entrenched in family and succession.   He cautions that there are possibly also cultural differences, such as gender or status issues (“I got a title like God, I’m sitting on the board”) and informal influence.

“You will very quickly potentially get sucked into family matters”

Martin explains that an external Director brings not only insights into external practices and their own experiences to the table but also high ethical standards and integrity.

With proximity to the family owners of the business themselves, one may very quickly get sucked into family matters, even personal or very intimate ones, so it is necessary to keep the relationship at arm’s length. It may be necessary to say no to the Chair or family members to have the opportunity to remain in a mediation role. Tension arises naturally on any board, but Martin explains that it may be greater on family-owned enterprise boards.

“Be attentive to but not biased by the business family and the business family matters”

Martin makes the point that external Directors may find themselves working for potentially a very wealthy, very influential, maybe even a very famous family – and doing it in the local society, region, or country. This can be intimidating. But an independent Director is independent and must bring an outside perspective.

Family businesses have been very successful, sometimes across generations, but this does not mean that success is guaranteed tomorrow, and renewal of entrepreneurship needs to occur to be competitive.

The three top takeaways from our conversation are:

1. Independent Directors bring immense value – governance structures, best practices, industry experience, and a life outside the family business.
2. The influence of the business family, the complexity, and sometimes navigating tensions and emotions can be demanding.
3. Entrepreneurship is deeply embedded in family-owned enterprises – it is why they are successful, often across generations.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: On Being an Effective Director in Family-owned Enterprises appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Family-owned or family-led enterprises are the backbone of thriving economies across the world. Family-owned enterprises account for a majority of companies, providing 70% of the global GDP and 60% of global employment. They are a key driver of global business and growth, so their sustained long-term value creation is important for the economy.

Families-owned enterprises have always benefitted society, and next-generation leaders seem to have a renewed appetite to make lasting change. However, the long-term success of family firms across multiple generations is neither a given nor an easy task. There are many complexities involved when ownership, management, and family roles overlap.

Family business owners, leaders, and the next generation face many challenges in preparing for the long-term future. One of them is to have proper governance mechanisms and boards in place. Yet when we talk about boards and governance, we do so mainly with large, listed corporates in mind.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses the role of boards in family-owned enterprises with Martin Roll. Martin is a senior advisor to Fortune 100, Asian firms, global family businesses & family offices. He has more than 25 years of board & C-suite counselling experience and is an advisor to global boards and prominent business families. Martin is also a mentor for next-generation leaders in family-owned enterprises. He is a Distinguished Fellow at INSEAD Business School and a former Senior Advisor to McKinsey & Company. Further to this, he is the author of the global bestseller “Asian Brand Strategy” and co-author of “The Future of Branding” – with two new books in the pipeline: Family Business Strategy (2023) and Family Office Strategy (2023).

“Family-owned or family led business receive less attention in the public debate”

Martin explains that corporate governance principles are the same for family-owned enterprises as for other entities. However, there are differences. In a family-owned enterprise, a board may comprise family members with independent directors, or only family members. Also, family board directors may be owners and/or leaders in the company. Regardless, the board must ensure the business operation is aligned with the values and goals of the owning family, and act as the facilitator of a long-term journey, ensuring that the company changes over time and is always fit for purpose.

With an owning family or sometimes several owning families, anyone sitting on the board is challenged to ask difficult questions that will keep the business competitive. This can include questions where family members might have conflicts, disagreements, or different aspirations for the business. Martin notes that many of those issues may arise in family-owned firms because, compared to public markets, there are more emotions and tensions between shareholders and different generations.  

“Who really has the power on the board?”

Martin believes the board put together for a family-owned business is going to mirror global markets in those intricacies that relate to that particular family. So, flexibility is needed, which is possible because family-owned enterprises are not bound by the same SEC rules and monetary authority rules (unless partly listed). He recommends ensuring more informed reporting lines (or many complex reporting lines) to intertwine ownership, family members, and management. As more people are involved, there are more reporting lines and a lot of informal communication because family, ownership, and business interests overlap.

“In family-owned enterprises, there is this underlying notion of a very long-term view”

Martin believes there are four things he has seen working in family-owned enterprises that larger organisations could learn from. Firstly, he outlines the importance of the long-term view. Secondly, the fact that family-owned enterprises tend to think in generations does not mean they are not agile. On the contrary, they can be very competitive. Thirdly, family firms are driven by purpose and often values, ethics, and sometimes legacy. Martin finally believes family firms are a force for good in the world because a family enterprise often comes from a particular region, town, city, and/or culture. They very often want to give back to that community.

“If you are making space for outsiders, you also need to give them that space”

Martin finishes by looking at the challenges for boards in family-owned enterprises and the difference between family and non-firm/non-family directors. He notes that external directors need to understand the history of the enterprise, as the culture of a family firm is a combination of past, present, and future, and that culture must be respected. He describes that in a family-owned enterprise, there is a lot of entitlement and a sense of ownership (and aspiration for ownership). This needs to be managed because behind it will be much emotions and complexity, and maybe tension to be navigated.

The three top takeaways from our conversation are:

1. Governance matters for family firms, but it is often underestimated. They need to start early to adapt and learn and then see governance as a journey and not an end state, to add new skills, get an outside perspective, freshen up, and innovate, while still keeping checks and balances.
2. Family business boards are more informal and more complex to manage. The oversight is different and takes extra attention and skill, but it can also be a fun and rewarding journey.
3. Learn from family-owned enterprises because they have a long-term view and are more patient but still very competitive. Learn from the best practices in corporate governance, but also be willing to create your own model because all family firms are different.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: The Role of Boards in Family-Owned Enterprises appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

High-profile corporate scandals globally have generated increased interest in corporate governance. As companies in Africa are becoming international players in both operations and sourcing of capital, the need to meet listing requirements of foreign exchanges and appeal to international investors has elevated the importance of corporate governance in Africa. Generally, favourable economic growth expectations and lack of legacy issues mean that Africa has some advantage in having new governance frameworks fit for the 21st century.

However, corporate governance failures persist in many African countries, and there are still many challenges and opportunities in developing and implementing corporate governance.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards talks with Tinuade Awe, Chief Executive Officer of NGX Regulation Limited – an independent regulatory subsidiary of the Nigerian Exchange Group Plc. The Group was formerly known as The Nigerian Stock Exchange (NSE) and is licensed by the Securities and Exchange Commission (SEC) to provide regulatory services within the Nigerian Capital Market.

“Entities don’t go into business because they want to be regulated”

Tinuade starts by outlining the difficulties of multiple layers of regulation, sometimes with different regulators, each wanting to impose certain obligations, each acting within its mandate by the legislative enactment. She believes that while regulators are already collaborating, there should be more of this.  

She describes how sociocultural issues are important because the underpinnings of good governance are transparency and disclosure, but the African approach to disclosure differs. African countries have extremely multi-ethnic cultures, leading to a sense of ‘keeping what’s yours to yourself.’ She believes this leads to people simply ‘not wanting to see what is happening,’ not because of any wrongdoing, fraud, or cover-up, but because culturally, many people don’t believe that type of disclosure is necessary.

Also, not every African regulator is keen on that type of disclosure because some regulators want to do their work and may not want the entire world to know what is happening.

“We tend to look at what works in other places and then domesticate for our market”

Tinuade believes that Africa is more similar than different to other countries in regulation. However, when thinking globally and acting locally, there are exceptions, and she gives the example of the demutualisation of the Nigerian Stock Exchange. It was decided to have a separate company with a separate board because they wanted the stamp of independence, so everybody would know that this was independent regulation. There was no idea that its decisions could be subsumed under business considerations. Tinuade gives this example of Africa going in a different direction from the rest of the world. Although there are other companies like this in Singapore, Japan, and Brazil, they are few and far between.  

She explains that there were certain things about the economy in Africa that require a growth board for growing companies, and they are also in the process of creating a technology board. There is a lot of investment by PE and VC firms in technology companies that have come out of Nigeria, Egypt, and Kenya, for example, and there are already unicorns from Nigeria.

Nigeria seems to attract technology, even though it is a developing country and some of the conditions may be challenging, so they are creating a board for technology. However, she accepts that they tend to look at what works elsewhere and then domesticate for the African market.

“Regulator, don’t you really think that you should be looking at this group of us and trying to come up with something?”

Tinuade reports that the very youthful population in Africa are digital natives and thus require access to digital sources of information and want disclosure. They want well-run companies because they can see how governance is helping to improve other economies and giving opportunities. She feels the combination of youth and the democratic creation of technology is undoubtedly vital for the furtherance of corporate governance. Also, governments themselves have a role in trying to attract funding, and one of the ways to do this is to have certain levels of governance. More and more African countries have principles-based codes, for example, Nigeria, Kenya, South Africa, Egypt – also Mauritius. 

Tinuade thinks the private sector does not necessarily lead many of these initiatives, so governments step in. Some African companies are finding particular demands are being made of them, especially when seeking foreign capital. If compliance is required, and it becomes more expensive to do business than for a fellow company that doesn’t have to comply, they are turning to the regulators. It helps to market to foreign investment to be able to say you are regulated. Regulation can be for a selfish motive in the sense that now the cost of business is higher, regulators or the government are being to raise the standard, so everyone has that additional burden. Finally, financial institutions like the IFC, and FSD, have an African focus. They are trying to encourage companies to do better governance and to be better run because of their belief that when you have better-run companies, it benefits the economy.

“The move from rule-based to principles-based helps moderate the box-ticking”

Tinuade acknowledges that, unfortunately, sometimes corporate governance becomes a box-ticking exercise, and there is not as much time spent on whether the board or the governance processes are effective. But if you have a completely Greenfield country, where there is no corporate governance, she feels people need help to get accustomed to what governance means. At the start, you may want to give a tick-box list of things to do. Then at some point, the move can be made to be more principles-based. Tinuade advocates principles-based corporate governance because it gives scalability and flexibility, which help to moderate the frustrations that a company may feel. It gives them some level of ownership and control as to how they will meet the principal’s requirements. Then buy-in is more likely, and companies are more willing to comply.

Tinuade believes that regulators have a lot of tools, ranging from a civil money penalty to a warning, to naming and shaming, to meeting with the board. She explains that when a company does not comply, the first thought is not that the company doesn’t want to comply, but it is to engage with the company as to why there is no compliance. Instead of a penalty, sometimes this leads to mandatory compliance training. This helps the company to understand better, leading to less box-ticking.

The three top takeaways from our conversation are:

1. Corporate governance is global. There is no African or Western corporate governance. Certain immutable principles apply everywhere.
2. Many companies are not taking issues around ESG as seriously as they should, and there are many developments in the world right now that will require mandatory obligations on companies.
3. The regulator is your friend. People should engage more with regulators and find a way of engaging with regulations and forcing a relationship that should be a two-way street.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Governance Challenges in Africa appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

There are many types of differences and diversity, and not all are visible or recognised. But what can be done to build and maintain a truly inclusive and equitable board?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses building inclusive and equitable cultures with Dr Doyin Atewologun, Director of consulting firm Delta Alpha Psi.

Doyin is a business psychologist, executive coach, scholar-practitioner, regular media contributor, and multi-award winner in recognition of her work on driving evidence-based inclusion in organisations. She is Director of Delta Alpha Psi, a leadership and inclusion consultancy; a member of the advisory board for the Carlsberg Foundation study on the Equality, Diversity & Inclusion Market in Europe; Academic Adviser on the UK government-backed Parker Tyler Review on ethnicity on FTSE350 boards and Advisory member of the Co-operative Group Limited Think Tank on Diversity & Inclusion.

“Different differences have an impact”

Doyin opens by explaining that inclusion is about the degree to which difference is recognised and valued, regardless of the type of difference. She highlights that in some geographical locations and cultures, certain differences matter more than in others, and some differences are visible and some not so visible, such as neurodiversity or religion. She believes there is a need to think intentionally about different identity dimensions and how they matter differently. Doyin feels that boards have a role as role models because of the work that boards and their members can do as a powerful social system. But that system has structural inequities. To build organisations that are gender, race, disability, or neurodivergent inclusive, we have to understand how structures may be exclusive based on certain groups. But structure alone is not sufficient. She believes individual action is very important, and the key question that everyone in the boardroom should ask is: ‘What is your own compelling driving force for equality in the business?’

“Analyse that assumption that you’re sacrificing competency for diversity” 

Doyin explains that, in her opinion, there are three different types of work to achieve diversity and inclusion: thinking work, talking work, and doing work. She defines thinking work as ongoing alertness to the less visible structures around us, being a critical thinker and challenging what we are used to hearing or saying. She feels we may not do enough thinking work. She gives the example of the myth that competency is compromised for diversity. Most women, people of colour and other underrepresented groups will say that their experience is the opposite – rather than lowering the bar, people who come from underrepresented groups find that they have to undergo a higher level of scrutiny, as more hurdles are put in their way. By the time underrepresented people are ‘on the radar,’ they are much more likely to be exceptional, because of the barriers they have had to navigate. Critical thinking will show that rather than sacrificing competency, you are probably getting much better ‘bang for your buck.’

“Gently, subtly, politically, but sometimes more directly influence behaviours, so that they’re much more aligned with your own values of inclusion”

Doyin explains that talking work includes the idea of calling out behaviour, for example, when in a meeting if someone is interrupting or ignoring someone else’s particular ideas. If calling out is a little too direct, calling in is another option, to change behaviours. Under no circumstances should anyone see something that goes against what they stand for and, as a leader or steward for a business, wait for someone else’s permission to disrupt it.

“The strength of a board is it comprises of different people”

Doyin explains that the third type of work is doing work, which is important to consider within the boardroom itself. It is important for boards to be strong, high-functioning work groups and for board members to trust and challenge one another and engage directly on critical issues facing corporations, either with senior managers or within themselves. The strength of a board is that it contains different people, different roles, and different powers. Doyin believes it is useful to build inclusive and equitable micro-cultures within the board and offers some ways the board can do this. First-time and minority ethnic directors and women receive significantly lower mentoring than white male first-time directors and are less likely to be advised by someone who is already a director about how to navigate the boardroom. So Chairs should attend to who is speaking and how often, to ensure that the minority member’s voice is heard during board discussions. Affinity bias or social identity-based liking occurs when you like or respect people who are similar to you, and research suggests that when new female and minority directors are not similar to their boards, they do not necessarily have  a similar chance to be appointed committee members or to have a long tenure. Again, this can be countered by the role of the Chair and other colleagues on the board. Doyin believes that until we get to a truly equitable and inclusive culture (and we should work towards it), we cannot be blind to the differences that occur right now.

The three top takeaways from our conversation are:

1. Inclusive cultures matter not only in the organisation, but also in the boardroom. The work of diversity in boards should not be just one person’s agenda item, but everyone’s agenda item.
2. Chairs have a particular role to play, e.g., in helping support the informal induction of new members – especially those who are ‘different ‘– don’t be blind to difference. Be intentional about it.
3. When you think about diversity as work, remember there are different types of this work – thinking work (thinking critically), talking work (calling things out when you see things inappropriate) and doing work, being seen by everyone to embody and shake up the culture

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: On Building Inclusive and Equitable Cultures in the Boardroom and Throughout the Organisation appeared first on The European Business Review.

The podcast and the article are brought to you by The Better Boards Podcast Series.

Healthcare in the U.K. is state-funded and led by way of a political manifest. The issues of governance in the National Health Service are complicated, and it is a ‘wicked challenge.’  The NHS is one of the largest global employers, with 1.2 million staff members. On average, on any given day, over 1.5 million patient contacts are made with health and care providers in the U.K. The nearest relatable context is Amazon which sends over 1.6 million packages daily. The hierarchical structure, multi-layered bureaucracy, and under-investment in the health system are coupled with crippled capital restrictions and a mountain of workforce issues. This makes for a perfect storm, certainly requiring governance.

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses the challenges of boards in the NHS and healthcare with Nabil Jamshed. Nabil is recognised for his outstanding governance work in the largest Trust in the National Health Service in the U.K.  Nabil is Head of Corporate Governance at Guy’s and St Thomas’ NHS Foundation Trust for the Integrated Specialist Medicine Clinical Group. He has over 20 years of experience working in the NHS and internationally with Qatar’s Ministry of Public Health and other health agencies. He is an elected member of the European Health Management Association (EHMA) Scientific Planning Committee, where he contributes to wider European healthcare management developments. He is also a Non-Executive Director at Black Country Healthcare NHS Foundation Trust. 

“A wicked problem doesn’t equate to a wicked answer”

Nabil explains that health care as a service provided to customers, clients, and patients has grown significantly in complexity over the years due to how communities have grown. Governance within that is what he describes as a really wicked problem, and Nabil thinks solving this is the biggest challenge in the health sector. In the U.K., healthcare is predominantly funded through the state, whereby you pay National Insurance and are provided facilities (mostly free of charge) when you need them. But the traditional model no longer works because we live our lives very differently from how we used to, as our habits, communities, lifestyles, and social constructs have changed. Health and care needs are now two different things, and all the socioeconomic factors known to be significant contributors to a person’s health and care needs must be addressed in a partnership model with robust governance. Defined and clear-cut accountability, responsibility, and rules are needed to deliver the best service to the patients; this is the governance challenge. 

“If you don’t take a holistic approach, and take everybody with you on the journey, the governance in the traditional way will fail”

Nabil explains there are many different approaches to governance, and there is still an absolute need for the mechanical aspect of governance – meeting the minimum compliance regime, standards to ensure a safe environment, producing a high-quality product, etc. Committees meet and feed into each other and then to the board. However, governance also needs both a vision and strategy. The decisions taken today need to account for the impact five years down the line, and without that strategic view, you are unable to assess the leadership needs for the delivery of that strategy. You will not be able to understand how you define your risk appetite as a collective unitary board, and the risk appetite determines what to proceed with.

Nabil gives the example that if, 10 or 20 years down the line, a lot of the delivery will be replaced by A.I. or robotics, decision-making today needs to invest heavily in innovation, and a risk appetite needs to be set accordingly, with an open risk appetite for innovation. How do you ensure that the risk appetite is translated? This is what he believes governance is really about.

He feels this is where traditional models fail because they do not emphasise the softer aspects of governance enough and focus more on compliance. Hence, he believes governance has to change and adapt to the new modern governance approach, looking at the cross impact of one area of business to the other and the rest of the organisation in an integrated way. If you do not take a holistic approach, governance in the traditional way will fail because it will not have the support systems it needs.

“Meaningless governance is not governance. Meaningful governance is governance”

Nabil explains that their approach is not typical in the NHS. He gives the example that in London, going from one underground station to another no more than five minutes south, life expectancy reduces by five years with each stop, culminating in a life expectancy gap of about 15 to 20 years. This is a huge problem, and how do you ensure the delivery of comprehensive, holistic health and care needs to address that inequality? Nabil describes that each organisation with a significant role has to think about the basic principles of modern governance, which must be applied and explained. 

He explains that his Trust looked at the principles set out by King and his approach to integrated reporting and applied that knowledge in a slightly different way. King talks about his six capitals, but in healthcare, and especially state-funded healthcare in the NHS, their own capitals need to be defined – the key things that make the organisation a success.   He gives the example that the Trust cannot compromise the quality and safety of care provided to clients, which is their utmost commitment. This led to how they deliver that through a workforce representative of the population served. Finances are another capital, as are regulatory standards. Without an integrated approach, looking at those individual capitals for the impact assessment holistically on each other, the delivery of care will be pointless.

Nabil believes silos need to be broken to apply and explain governance principles. Ensuring agility is developed within leadership modeling in the vision of delivery of care. This needs to be driven through the frontline to ensure that the clinical people who understand the clinical needs are in leadership positions as the lead accountable people for delivering the services they own. Without doing that, you will have meaningless governance.

“When you have your non-executives involved versus your executives, they have two different lenses”

Nabil relates that executives tend to focus on operational delivery. In contrast, the Non-Executives focus on the assurance that everything is happening as it should happen, with no loopholes, and that this does not expose the organisation to significant risk. In his Trust, they modelled the governance structure on assurance committees and fixated on those capitals. Every committee led on one, two, or a combination of capitals, with responsibility against that. The provision of assurance from the executive committees then goes to the senior board committees. He explains that they have also implemented a performance review meeting process, and joining the two structures together created assurance modelling.

Nabil believes assurance has to be based upon triangulation from various sources, and performance data on key indicators is only one aspect of it. KPIs may give you one aspect, but delivery against the stewardship, modelling, and systemic modelling within the governance is critical. You need to build an assurance model that includes fully comprehensive data elements, softer intelligence from the patients you serve, and what the staff tell you. 

“Any single report that comes to the board is aligned to those six capitals”

Nabil advises that the Trust is on a journey that is not yet complete. But all information produced for board packs is now aligned to the six capitals, as is any single report. He is proud of the Triple-A model that has been introduced. Within each report, the 3 A questions are

1. What do we want the committee or the board to be Alerted to?
2. What do we want to provide the board and the committee Assurance with?
3. What Actions are we taking to address going forward?

Every single report that comes to the board covers those three elements. But he notes the real change is in the discussions held at committees in local feeder groups, which is an absolute bottom-up approach. Without a subsidised governance approach, you can’t achieve this right away. They have redefined agendas and enabled executives to hold time for thinking, discussion, and focus of attention before the meeting, so they are pre-prepared about the questions instead of presenting a report. This has changed discussions. This needs both a bottom-up approach and a top-down commitment, plus the mechanical governance combined with looking at the six capitals every time.

He talks about a new discussion place, the Integrated Governance Assurance and Performance meeting, or IGAP, to fill a gap in their thinking ability. This takes all the information from all angles and feeder groups upwards to the executives, giving them that flavour of triangulation of vital themes across the organisation where multiple avenues of leadership structure are affected.

The three top takeaways from our conversation are:

1. Have a clear-cut, long-term strategy; stick to it regardless of changes and believe in the process it will deliver.
2. Build agility in governance and link it to your strategy and the risks you identify through that process, not getting hung up on one compliance only.
3. Complex problems do not mean a complex solution. They mean a simple solution. But that simple solution doesn’t mean the complexities are avoided – you understand and address them and build your governance to simplify those complexities.

Don’t forget to subscribe never to miss an episode of the Better Boards Podcast Series. Available on their website, Apple, Spotify or Google.

To find out how you can participate in the Better Boards Podcast Series or more information on Better Boards’ solutions, please email us at info@better-boards.com.

The post The Better Boards Podcast Series: Governance – Wicked Challenges in Healthcare appeared first on The European Business Review.