Board leadership conference stresses 5 areas of focus to ensure good governance
Reatha Clark King, Board Chair of the National Association of Corporate Directors, opened the 2014 Board Leadership Conference by putting corporate boards on notice that they need to update the priorities on their agendas in order to be leaders in their industries and to keep the public’s trust. The conference was held October 12-14 in National Harbor, Maryland, just outside Washington, DC.
Building on the conference theme ‘Beyond Borders’, she challenged boards of directors to think beyond traditional norms and embrace ‘a new paradigm of continuous reinvention’ to inspire innovation in their companies and to find solutions to the biggest challenges of the day. She said thinking beyond borders would enable boards to lead.
First King suggested boards do a self-evaluation and determine whether they have the right board makeup to deal with the accelerating changes and new challenges they are facing in today’s technologically advanced global economy. She then said boards must update their agendas in order to remain relevant to their communities and competitive in their industries. She offered five areas boards should focus on to ensure good governance:
• Excellence in basic governance functions – Areas such as audit, compensation, nomination and governance, strategy and risk should be maintained at a world class level. Additionally, communications, adapting to technology, board and management diversity and the corporate reputation should also be maintained at a high standard. The basics of governance must be handled well so the difficult issues can be dealt with more easily when they arise.
• Innovation – ‘The creation of new knowledge will prepare the company for long term and sustainable success,’ she said. Innovation leads to value creation for shareholders, stakeholders and communities.
• Harnessing the transformation benefits of new discoveries – As the digital era ushers in new discoveries that are beneficial, boards need to be mindful that companies need to ‘mitigate the risk and potentially harmful effects of these new discoveries,’ King said. She pointed out that while the era of big data will add great efficiencies to companies it will also lead to harmful data breaches that turn consumers against companies.
• Embracing a broad view of the company’s contribution to society – Corporations have an impact on local, state, national and international communities. ‘We don’t have to be located outside the United States to know that global issues are affecting our companies,’ King said. Boards must have a direct impact on how companies react to those global influences, and those reactions can affect many communities for the better.
• Communication and keeping the public’s trust – Transparency and disclosure will be emphasized going forward, so boards should embrace it and use it to their advantage. ‘I challenge us to communicate clearly with our stakeholders and work harder to ensure that our companies are worthy of their trust,’ she said.
The opening day of the conference also included a keynote address from Carlos Wilson, CEO and co-founder of OZY Media, and a conversation with Carolyn Miles, president and CEO of Save the Children, and Donna Young, a member of that organization’s board of trustees.
Wilson offered the audience 10 lessons he learned from launching his startup venture OZY Media, while Miles and Young discussed the challenges of running a global non-profit like Save the Children that must tackle many of the same problems as major corporations.
