The Institute of Directors in South Africa (IoDSA) lays out five key trends for boards and directors to focus on in 2023. Parmi Natesan, CEO of the IoDSA argues that boards need to begin planning their agendas for 2023 to ensure they are on top of these trends—and that their members have the requisite skills to fulfil their duties.
“Short-sightedness is one of the most damaging traits in directors, so companies must ensure that directors have the knowledge and skills necessary to embrace these trends and create a sustainable future for the company,” she says.
The five disruptive trends are:
Less time, more pressure. Businesses have to respond fast to a rapidly changing global environment that is increasingly automated - directors are under increasing pressure to take important decisions rapidly. The chair’s role becomes even more critical in striking a balance between facilitating an inclusive exchange of views while preventing unprepared directors or individual agendas to hijack or prolong the board’s deliberations. By the same token, directors must be properly prepared to make decisions on agenda items.
Less paper, more AI. Boards will specifically need to acquire the skills to interpret real-time data accurately in order to incorporate it into their decision-making process. They can no longer simply base their deliberations on the board pack but will need to ensure that artificial intelligence (AI) is effectively used to process large amounts of data to deliver relevant insights. In a similar vein, directors will need to allocate resources to streamline business processes within the company using AI and other Fourth Industrial Revolution technologies.
Less focus on operational issues, more oversight. The traditional view that extensive operational or managerial experience makes for a good director must now be discarded once and for all—directors need a distinct knowledge base and skill set. “Continuing learning is vital. The IoDSA’s advice is to plan training topics into the meeting calendar for the year and, if necessary, integrate training sessions into the board’s or committee’s meeting agenda,” Ms Natesan says. “The IoDSA can help by providing this phased and structured learning via two-hour snapshot training sessions.”
Less stability, more agility. Today’s world is volatile, uncertain, complex and ambiguous (VUCA), with economic and geopolitical issues more intertwined and harder to interpret than ever. Long and complex supply chains also expose companies to contingent risks and thus require extensive planning to ensure alternatives are in place.
In this VUCA world, the ability to respond rapidly and strategically is critical.
Less greed, more green. Environmental issues, including but not limited to climate change, should be prominent on the board agenda for a multitude of reasons. Directors need to have the skills not only to understand these complex issues but also how to measure and report credibly on the company’s progress in meeting its environmental targets.
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