Nicos & Koralia Timotheou

The successful organization is led by its board of directors. A board that assumes its leadership role in owning the corporate culture: identifying and adopting corporate values, formulating  a code of ethics and a code of governance and exemplifying their implementation not only in living and preaching them but also in utilizing them in solving business dilemmas. A board that propagates the culture by mentoring top and senior management.

Research(1) shows that the effective board
   
  1. has diversity of background, of opinion, of gender, of nationality (especially for international companies) and of maturity –of “wisdom”;
     
  2. needs wisdom: knowledge, continuous (willingness and capability for) learning, reflection, courage to express opinion, humility and lack of arrogance and willingness to take action after consultation;
     
  3. is evidence-led: it assesses continuously not only the company’s reality, but also what is happening in the business sector, the related technology, the (geo)politics, finance, etc; has the wisdom to recognize promptly disruptive trends in technology, in local and international competition, in local and international finances, in the (geo)political environment –in anything that may affect the future of the business;
     
  4. is not complacent due to current or past success: it has the wisdom to challenge continuously the current corporate mission and revise the corporate vision and hence its strategy;
     
  5. disrupts the current mission despite temporary losses by carrying out frequent (annual) zero-based reviews;
     
  6. faces proactively the "innovator’s dilemma"(2): it has the boldness, courage and wisdom to set up a separate corporate structure to create and deliver new products and services, even if they will cannibalize existing successful ones –so as to preempt competitors doing so;
     
  7. has the ability to switch from a telescopic view of the past to a kaleidoscopic one facing the future;
     
  8. has the ability to reflect and restrain rushed action until dialogue is exhausted and consensus, alignment and engagement is reached with due consideration to time.
Effective boards comprise a good mix of age. Besides including their executive directors (the main chief executive officers) and a few young and dynamic non-executive ones (usually experienced technocrats of diverse specializations), they do comprise a couple of older people in their late sixties to their eighties because neuroscience has shown that maturity and wisdom come with age -frequently in the role of the Chairperson and/or the Lead Independent Director.
   
  • These elders, usually with CEO experience, are not only able to surface the real issues and weaknesses hindering the functioning of the board but can deal with emotions and conflicts and assist in sense making and sense breaking!
     
  • The older board members can mentor the younger ones -especially the executive ones, being able to control their ego and having been through various similar situations in the past.
     
  • The older non-executive directors can help resolve difficult dilemmas being able to face both teleological personalities (influenced by the opinions of others) and deontological ones (acting always on their personal values –what they consider right or wrong). 
These elders are absolutely necessary since boards do face regularly difficult dilemmas:
   
  • Sensitivity ones: how to negotiate differences of vision, strategy and tactics and achieve alignment, dealing with teleological and/or deontological personalities –substituting animosities with commitment to the team, the organization and the greater good;
     
  • Timing ones: how to face disruptive changes while the company is still successful, forcing passive stakeholders to acknowledge the impending/occurring (potentially disruptive) changes and state what they are willing to do before them; and
     
  • Transparency ones: how to deal with the need to observe the corporate values and codes of ethics and governance in environments where only by defeating them one has any chance of competing, especially when customer-facing managers are evaluated and paid on results! 
     
In summary, effective boards have a diversity of people. Of great value are older people having the wisdom to deal with the extremely difficult issues facing enterprises in 21st century’s open business environment characterized by glocalization and chaoplexity –persons who have the ability to put their Aristotelian wisdom to practice: stand back and reflect, hold back, slow-down and rethink before deciding and acting, ask for/give feedback, discuss openly, achieve alignment and never go back. People who have impressive passion and professionalism and care about the organization and its stakeholders!

People who will remind their colleagues on the Board and the Executive Management that
   
- business success equals delivery of value; 
- value lies in the eye of the beholder, be it an organization or an individual;
- the company exists for the specific purpose of creating and delivering a specific value to its stakeholders; 
- the corporate purpose is realized as its mission and sustained by its vision: and, last but not least,
- the Board of Directors must act as the steward of the interest of ALL stakeholders! 

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(1) Τhe Successful Formula – How Smart Leaders Deliver Outstanding value, Andrew Kakabadse, ISBN: 978-1-4729-1684-6
(2) The Innovator’s Dilemma, Clayton Christensen, ISBN: - 978-0062060242 

27.11.2015