In 2022 and beyond, many opportunities exist for boards to become more effective. These changes require boards to capitalize on new methods and technologies to streamline operations and better track and analyze overall board activities. The insights can provide a foundation for continuous improvement, steering boards in the right direction and facilitating real-time course corrections.
These changes won’t be easy. They require boards to be purposeful in reshaping standard operating procedures. Here’s the good news: The past two years showed that boards everywhere are capable of embracing and leveraging digital tools.
BRINGING DIGITAL DISCIPLINE TO THE BOARD
The Covid-19 pandemic accelerated the digital evolution of boards. Now, it’s time to keep the momentum going. It’s about taking small steps.
Consider the compounding effects data insights have over time. Fitbit and Apple Watch step trackers, for example, began with a simple promise: Track your daily steps toward a goal and report progress in real time. These tools transformed into intelligent devices that coach users toward better health and wellness.
The same can hold true for board meetings. Boards should start by thinking beyond virtual meetings and considering other board interactions that could benefit from digital transformation. Board management solutions offer the ability to convert many functions, such as voting, taking attendance and annotations, building agendas, conducting surveys and defining roles and terms, from analog to digital.
Converting to digital makes board processes more efficient, allowing board leaders and administrators more time to focus on more meaningful priorities. It also provides an opportunity to collect data with real-time insights for more informed decision-making.
These insights could benefit boards at multiple levels. At the meeting level, for example: How many interactions and discussions happen before the meeting? Do board members consider themselves adequately prepared? Is there sufficient time to cover everything on the agenda? Boards can analyze and optimize all this data for more effective meetings. Leaders can identify unnecessary processes, enabling them to spend their valuable meeting time together on the most vital matters.
Another level of intelligence could focus on data about the board itself: Do we have the right people in the room? What skills do our board members have? Do we need a new committee for ESG issues? This data is more complex, but it should be analyzed so boards can evolve toward better versions of themselves for the organizations they serve.
THE FUTURE OF BOARD INTELLIGENCE
The next level of intelligence involves evaluating boards against external benchmarks. This could include comparing attributes such as size, geography or stage of business development. For example, the board of a fast-growing financial services firm could assess how its board activities compare to similar firms locally, nationally or even globally.
With this data, boards could answer important questions such as: Are we making decisions quickly enough? Are we keeping pace with our peers on ESG? Where are we lagging on diversity compared to other boards?
Here are five steps board leaders can use to make the shift to digital processes:
1. Build consensus. Board leaders should work from the start to gather input and build buy-in organization-wide so all stakeholders understand the need for a board management solution.
2. Evaluate current processes. Boards must understand where they are before they determine where they need to go. Analyze how the board operates today, including director and administrator responsibilities, the time involved and the tools, processes and resources they use to complete specific tasks.
3. Define your needs. Based on a comprehensive analysis of current processes, board administrators can identify what works, what doesn’t and specific requirements for a board management solution.
4. Research your options. Explore the available digital tools, platforms and applications. Consider cost-effectiveness, ease of use, security, adaptability and training and support.
5. Execute a clear implementation plan. Once boards select a solution, board leaders should develop an implementation plan that assures everyone receives adequate training and support. Some boards may think that adapting to virtual meetings qualifies as digital transformation. But to truly transform board processes and effectiveness, boards must rethink governance processes and ask themselves if their analog solutions are aiding—or inhibiting— their important work.