Governance has struggled to keep pace with today’s business landscape. The world we live in is switched on, digital and decentralized. Cyberattacks can originate from anywhere in the world. Social media amplifies the voice of every stakeholder and employee. In a world where nanoseconds count, old governance practices aren’t just out of date; they’re exposing today’s organizations to the kinds of risks that can lead to crises. And there’s no shortage of examples these days…
Cyberattacks on healthcare and financial institutions. Scandals resulting in tarnished reputations for universities and colleges. Violations of nonprofit laws and regulations. Organizational cultures gone awry. These are the things that governance shortfalls are made of. And the next question is always the same: Where was the board and leadership team while all this was happening?
Simply put, good governance is a strategic advantage in today’s complex, digital world. And the first step towards modernizing governance frameworks requires clear identification of the problem.
Acknowledging the Governance Deficit
Globalization, digitization, connectivity, access—many of these change factors have been welcomed advancements, yet the rate at which they’ve come into play has left today’s organizations with little time to adapt. As a result, organizations have been exposed to a dangerous governance deficit, which can take many forms:
- Leaders don’t have the right information at the right time to ask the right questions.
- The board lacks visibility into the organization, across the industry, and into the future.
- Organizational data and communication systems are disparate and unsecure, hindering collaboration and exposing its users to potential cyber risk.
Core to today’s governance deficits are a lack of visibility, security and speed. When organizations and boards address these deficiencies, they empower effective decision-making, enhance transparency, and gain access to the kinds of insights that drive growth and longevity in today’s digital age.
Defining Modern Governance
Modern governance: (n.) the practice of empowering leaders with the technology, insights and processes required to fuel good governance.
In an effort to bridge the current governance deficits, BoardEffect is thrilled to be a part of the Diligent team in launching a new category: modern governance. Enabling this new category, BoardEffect’s offerings put the necessary tools and intelligence at the fingertips of today’s board members and leadership teams.
Modern governance equips boards with the information they need to ask questions and address red flags. It protects an organization’s most important data. It enables transparency and liberates the flow of information. It transforms the board into an engaged partner and a radar on the future. Most importantly, modern governance is a strategic advantage in a time of enhanced risk and disruption.
What does a modern governance product solution look like? An integrated suite of tools—from board analytics to secure collaboration—that allows organizations to govern seamlessly. BoardEffect is proud to be a part of the Diligent family of brands in bringing these modern governance solutions to life and together serving more companies across the world than any other board service provider.
Motivating this modern governance category launch is our genuine belief that good governance matters and impacts us all. Every employee and community is affected by the way organizations govern, good or bad. Given Diligent’s customer base—more than 650,000 users in 90+ countries around the world—we recognize our impact in the governance equation. Not only are we equipping today’s boards with the tools they need to thrive, but with the tools they need to do the right thing.
4 Steps Boards Can Take Towards Modern Governance
Good governance is dynamic—it can look a little different from one organization to the next. Yet, there are a few modern governance principles that hold constant:
Re-examine the governance structure you’ve inherited.
When you join a board, you’re inheriting a governance structure (i.e., an existing set of rules, roles and processes that govern the board and the broader organization). New board members must get up to speed quickly on necessary processes and protocol, but they can also offer a fresh perspective on how things could be done better. Board members should not be afraid to re-examine or challenge the current processes that are in place and ask, “Can we be doing this a better way?” Keeping a close eye on the effectiveness of your current governance structure will allow your organization’s board to more precisely pinpoint areas of improvement.
Focus on board composition and development.
It’s quite simple: today’s organizations have the right mix of people sitting around the boardroom table. Modern governance organizations align board skills with long-term strategy; they see diversity of all kinds as an advantage, not a requirement. However, executing on these succession-planning principles is where many boards fall short. Modern boards must work to identify gaps, understand the skills and perspectives required to answer the needs of the organization, and recognize any potential conflicts of interest.
Improve visibility around key risks and opportunities.
Irrelevance befalls organizations that fail to innovate fast enough. It’s not enough to simply identify key organizational risks—boards must then design the dashboards, reporting frameworks, and info-gathering networks that allow them to monitor these risks and identify red flags. A modern governance product solution ensures that boards remain aligned with their goals, that they collaborate on critical issues securely and effectively, that they manage reputational risk, and that they stay in compliance with laws and regulations.
Avoid easy cyber mistakes.
Board and company leaders are notoriously guilty of using text messaging or personal email to share sensitive information and materials. Even when the information they’re sharing is not sensitive in nature, these unencrypted communication channels can be used as entry points for bad actors. Organizations that practice modern governance do not make these mistakes; they centralize board and management communication through secure messaging and collaboration tools. The best part? Secure communication is no longer at the cost of convenience, but it has all the functionality and ease of everyday messaging and collaboration tools.
Over the next several weeks and beyond, we’ll be exploring the impact of good governance, sharing best practices, and celebrating the organizations, board members and professionals who are doing it well. Stay tuned!