Rising expectations and game-changing issues will continue to drive a sharper boardroom focus on positioning the company for the future. Here, we highlight three of the top issues boards should consider as they focus on their 2018 agendas.
Help the company keep its eye on the ball: long-term value creation.
One of the board's most important roles is to empower the CEO and management team to think and act long- term--investing in talent, driving innovation and taking the long view on corporate performance. While there is a genuine need for short-term stewardship, don't let it distract from focusing on long-term value creation.
Indeed, major investors have made clear their expectations for companies to focus on long-term value creation and the factors driving it--strategy and risk, talent, investment in research and development, culture and incentives, and environmental, social and governance (ESG) issues, particularly climate change and diversity. On ESG issues--which are also squarely in the sights of employees, customers and communities --the board can help management widen its aperture to understand how the company's strategy and operations impact all of its key stakeholders and drive long-term performance.
Expect disruption to continue full-force with technology and "digital" at its core.
The raft of start-ups upending traditional business models should put disruption high on board agendas. Advances in digital technologies such as cloud computing, robotic process automation, machine learning, artificial intelligence and blockchain are transforming how companies do business. Moreover, the speed and impact of these technologies have the hallmarks of another "new economy" (the internet was the last). Help the company test its strategic assumptions and keep sight of how the big picture is changing.
Understanding how the company collects, protects, analyzes and uses data has become table stakes for broader, potentially game-changing questions: What are the goals of the company's digital strategy and how can the use of big data and advanced analytics drive the business? Do we have the right tools, technology and talent to develop a quality big data program?
Be particularly sensitive to risks posed by the tone at the top and culture throughout the organization.