We're in a new world — one that requires a new paradigm of management leadership and board oversight.
With tension finally starting to ease on the heels of 2020's prospect for unparalleled economic collapse, escalating social and political turmoil, and catastrophic climatic shifts, and with COVID-19 vaccines now widely available, making the pandemic seem more manageable by the day, many companies that had shifted to remote work are planning a return to the office — a return to “normalcy.” Business leaders who have been missing “the way things used to be” are now devising ways to effectively roll back the clock to before March 2020, when our world was forever changed.
But resuming business as usual without fully applying the lessons learned over the past year would be a critical mistake. Public and private company boards need to resist the temptation to fall back into old habits, patterns and plans. They must have the courage to move their companies and their board governance forward, and not seek the perceived safety of the old “normal.”
Today's boards need to work with management to exercise engaged and collaborative oversight.
Post-pandemic boards will require new — and different — competencies and skill sets in increasingly important areas such as AI and automation, risk management, supply chain optimization, transformation and process redesign, mobile workforces and satisfying stakeholder demands for environmental, social and governance objectives.
And, to do so, they need diversity — in thought, experience and background in addition to diversity in age, gender, race, and ethnicity. Today's boards need directors who have an agile, open mindset and are committed to continuous learning.
Private and public companies have typically looked to retired CEOs or CFOs for board leadership placing a high value on experience with the way things used to be rather than skills and competencies requisite for success in the new global and domestic business environment.
However, this past experience, while still extremely valuable, is likely not enough to provide all the expertise and perspective organizations now need at the board level.
The following are a few questions to ask yourself as you reexamine the composition of your current board:
- How does our board makeup compare with our customer base, products, geographies and communities?
- Do we have the right skill sets, experience and competencies on our board? Are there any gaps that we may need to fill in the coming year?
- Do we have a variety of perspectives and background experience represented on our board?
- How does our board makeup compare with our organization's stance on diversity, equity and inclusion?
- Are we working effectively and collaboratively with management or is there opportunity for improvement?
It would be easy to fall back into old patterns and habits and pretend the past year never happened! Many board members (and employees alike) want nothing more than to go back to the way things were.
But as a leader, you have to recognize the urgent need to change in order to carry the company successfully into the future. Old plans, ways of doing things, strategies, business models or revenue streams may no longer fit the new reality. And you have to know when you need to get more help — either by adding new board members or engaging outside consultants.
This may be an opportune time to consider engaging advisors to help you evaluate your current board, including looking at the experience and competencies of current members, identifying any gaps in your board structure, and developing a multi-year plan for evolving your board to better fit your long-term goals and strategy in the new normal.
Private and public company boards must face the future with both eyes open, keeping in mind the lessons of the past year and evolving to meet the new reality, as they prepare to address whatever challenges and opportunities may lie ahead.
N.K. “Trip” Tripathy, MBA, CPA, CGMA, is a business consulting services principal at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S. Trip is a former CEO, COO and CFO, having served in senior management roles both in the U.S. and abroad. You can reach Trip at ttripathy@kaufmanrossin.com. Glenn C. Davis, CPA, is a Kaufman Rossin principal emeritus and a risk advisory services director at Kaufman Rossin. Glenn has served on several public, not-for-profit and ESOP boards. You can reach Glenn at gdavis@kaufmanrossin.com.