Boards failing to address complex and inter-related issues

The corporate governance and sustainability competency of many boards questioned at global convention
Prof Colin Coulson-Thomas
Prof Colin Coulson-Thomas
PETERBOROUGH, U.K. - Nov. 13, 2018 - PRLog -- Prof Colin Coulson-Thomas, author of Developing Directors and Winning Companies; Winning People has raised the question of whether many boards have the openness, flexibility, intellectual ability and energy to confront complex and inter-related issues. Speaking at this years London Global Convention organised by India's Institute of Directors (IOD) on the theme of the board's transformational strategy for building a sustainability paradigm, he suggested some corporate boards are not providing any form of proactive leadership let alone transformational leadership.

According to Coulson-Thomas in his published findings: "Too many boards just react to events and they often react when it is too late. Look at what is happening to many retail chains. Their directors have been so slow to respond to on-line shopping."

Coulson-Thomas explained the findings of his investigation of approaching twenty years of IOD events: "Annual calendars of meetings and board practices allowed many boards to deal with discrete issues as and when they arose. The departmental structure of companies meant that issues could be categorised and routed to appropriate specialists who could handle them with or without intervention from the board."

The chairman of Adaptation continues: "Over the years the concerns of business leaders attending IOD conferences have changed. Conferences that used to be mainly self-contained have become more integrated. Certain topics now feature in multiple events. As issues become more complex, inter-related and significant in their possible implications, their categorisation can be more problematic."

"Corporate leaders portray a business environment of change, uncertainty and insecurity. Boards are simultaneously confronted with multiple and inter-related challenges and, at the same time, new and unprecedented opportunities. Because issues may have implications across a company, identifying which individual, group or department should address them is difficult. Some remain at board level because there is no obvious group to whom they can be delegated.

"Few people appear to have authoritative and relevant expertise and few organisations offer compelling and actionable solutions. Business leaders find that their colleagues' past experiences and current corporate capabilities, approaches, structures and practices may not be relevant for today's requirements and tomorrow's possibilities.

"Climate change, cyber risks and the challenges and opportunities of digital technologies, new business models and the sharing and circular economies can impact upon most companies. Addressing them can benefit from a collective response. However, there is more recognition of the value of collaboration, than understanding of with whom and how it might best be achieved.

"The scale and potential impact of some threats and opportunities is such that more boards are recognising responsibilities to a wider range of stakeholders. A broader range of interests may need to be engaged, but one might first need to restore trust. Many companies are perceived as compounding problems rather than developing solutions. Tackling a challenge such as climate change or sustainability requires more than the incremental improvement of current operations. Innovation and transformational leadership are needed."

Coulson-Thomas finds: "Many organisations retain departmental structures. Their people specialise in relatively narrow and self-contained areas. Some leaders struggle to find the breadth of perspective and dispassionate objectivity required to simultaneously address inter-dependent and multi-disciplinary issues. Clinging to standard models and approaches developed in a previous era can inhibit the exploration and diversity required to develop adaptable and flexible solutions for particular situations at a certain stage of development and in a changing context. Given the multiplication of opportunities and options and the requirement for a greater variety of approaches we may need more guidelines and fewer standards."

The findings of Coulson-Thomas' investigation raises the issue of whether our board, governance and regulatory practices are capable of handling a collective response to inter-related challenges such as climate change and sustainability that may have multiple implications for different groups over varying timescales. He believes: "Many companies would benefit from a fundamental review of their governance arrangements, board and management practices, and business and organisational models. In many companies urgent action is needed to develop or acquire multi-disciplinary and complex and inter-related problem solving competences."

Coulson-Thomas suggests: "More issues may need to be handled by multi-disciplinary, multi-location and multi-organisational working parties, project groups and programme teams. Their effective management and governance might benefit from use of relevant digital technologies.

More systems thinking is required in corporate boardrooms and in support of boards to better understand and map interdependencies, identify points of greatest potential impact, agree warning signs or 'traffic lights' and establish control limits." He also believes more companies could benefit from an area he has explored in a series of research reports: "Greater attention could be given to more affordable, quicker and less disruptive approaches to change, knowledge and talent management and ways of helping people to cope with complex challenges and simultaneously deliver multiple objectives."

Coulson-Thomas concludes: "Some boards clutch at straws. With a degree of arrogance and a touch of hypocrisy it has become fashionable for some business leaders and consultants to suggest that other people's values need to change because of behaviours caused by their own priorities and their promotion, remuneration and other policies. They should first look at themselves. They should question whether they and senior management are providing ethical, inspirational and transformational leadership, and doing enough to stimulate, support and enable creativity, innovation and entrepreneurship."

Prof. (Dr) Colin Coulson-Thomas, chairman of Adaptation Ltd, has helped directors in over 40 countries to improve director, board and corporate performance. He was speaking at the 18th London Global Convention on Corporate Governance and Sustainability. Details of his most recent books and reports can be found on:

Adaptation / Colin Coulson-Thomas
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