Governance in the Digital Age

A Guide for the Modern Corporate Board Director

Brian Stafford, Dottie Schindlinger

• Editore: Wiley
• Anno: 2019
• ISBN:
  9781119546740
• Edizione: 1
• Argomento: Business
• Categoria: Corporate Governance

A new edition of the #1 text in the human computer Interaction field!

This book seeks to chart the technology-fueled changes taking place in the field of corporate governance and describes the impact these changes are having on boards and the enterprises they govern. It also describes what the future could look like once companies truly embrace the power of technology to change governance.

Additionally, this book will provide a set of "suggested action steps" for companies and their boards focused on ways they can leverage technology tools to enhance governance immediately. Through a review of the latest governance research, interviews with key thought leaders, and case studies of enterprises that have embraced governance technology, readers will be armed with new insights and approaches they can take to enhance the work of their boards and senior leaders to reach new levels of performance.

• Explains how to use design and evaluation techniques for developing successful interactive technologies
• Demonstrates, through many examples, the cognitive, social and affective issues that underpin the design of these technologies
• Provides thought-provoking design dilemmas and interviews with expert designers and researchers
• Uses a strong pedagogical format to foster understanding and enjoyment

An accompanying website contains extensive additional teaching and learning material including slides for each chapter, comments on chapter activities, and a number of in-depth case studies written by researchers and designers.

PART 1
Governance Practices in the Digital Age

CHAPTER 1
Ensuring Value Creation (Despite Volatility)

Most companies have growth periods and value periods. You grow and then you harvest.¹

– Margaret Whelan, Corporate Director of TopBuild and Mattamy Homes

What is value creation in the digital age? It’s a home-building company actively reallocating its capital to the markets with the most need and the least competition. It’s a medical IT company² developing products that respond to pain points in customers’ daily workflows. It’s a mail-order provider of DVDs adjusting to changing consumer behavior to become a world leader in scripted programming.

Value creation is different from growth. Growth is about short-term returns and capital expansion, with less focus on longer-term consequences. Value creation, by contrast, is a long-term strategy that takes into account how companies invest in innovation and sustainability.

Importantly for corporate boards of directors, value creation today goes beyond immediate decisions on dividends and investment strategies to maintaining a durable and sustainable business model. Think of it as building a strong company as well as a strong stock — a dual mission that’s more challenging than ever in today’s global landscape of technological complexity. And think about it as staying ahead of risks and opportunities. At any moment, a new innovation like blockchain or artificial intelligence, or virtual reality can irrevocably upend business as usual, even for the most entrenched global leader.

Stakeholders agree that boards need to play a more involved role in making their corporations valuable to customers, investors, and the overall marketplace. BlackRock, State Street Global Advisors, Vanguard, and others have been pressing for governance practices that support long-term, sustainable value creation.³ Evolutions in these practices have included mandatory sustainability reports for publicly traded companies in Singapore and proxy statements in the United States that have evolved from check-the-box compliance statements to rich windows into a company’s strategy, performance, compensation, and culture.⁴

Board members already make pivotal decisions on acquisitions, investments, marketplace expansions, executive hires, and more. But in an environment of constant and often cataclysmic change, they must replace the caretaker model through which they traditionally view such decisions with what consulting firm Bain describes as a “private equity” approach.⁵ They must look at decisions with the sharp, opportunity-focused eye of an investor, as well as the caution of a steward.

The right board leadership can steer a $500 million company into becoming a $10 billion leader, while ineffectual guidance holds a similar power in the opposite direction. Or, to paraphrase the famous words attributed to Intel’s Andy Grove, only the value creators survive.

How can a forward-thinking board make the shift from cautious steward to innovation catalyst? Even the most time-efficient director possesses only 24 hours in each day. And board processes, steeped in decades of tradition, may not be agile enough to respond to the heady demands of value creation.

We believe quick wins in this complex area can be achieved. First, focus on operational engagement, specifically implementing fresh tactics for collaboration, shaping board structures (especially committees) for the value creation mission, and using technology to stay in touch with what’s going on inside and outside of the organization. Then examine your Board Behavioral Profile. Which traits does your board currently exhibit? Consider how your profile might need to shift for greater value creation.

Embrace New Ways of Working Together

Becoming a value-focused board doesn’t happen instantly, with one epiphany at an alpine board retreat. It happens over time, with incremental changes to business as usual. In a November/December 2017 Harvard Business Review article about the “new innovation imperative,” former Mastercard CEO Robert Selander emphasized that big ideas typically don’t spark transformative change.⁶ It usually takes several ongoing discussions about several ideas, good and bad.

Cambia Health Solutions CEO Mark Ganz put this premise to work by turning its PowerPoint–driven board meetings to open discussions.⁷ Through encouraging thought-provoking questions, his board improved their partnership with management and increased the value delivered by individual members.

Boards are recognizing the need to solicit new and different viewpoints in order to stay relevant. Board diversity is key to board resilience, an area that will be explored further in the next chapter. Specific to value creation, many directors and other governance professionals are finding that bringing in a broader range of perspectives can keep a board more closely in touch with change and better equipped to talk about it. Onboarding new directors can also change board dynamics for richer, deeper conversations and faster, sharper decision making.

“They say that if you have at least two or three women on a board, it really changes the way a board processes things. The same study has been done with digital directors,” said Betsy Atkins, CEO and founder of Baja Corporation, who serves as a director on the boards of directors of Cognizant, Wynn Resorts, SL Green Realty, Schneider Electric, and Volvo Cars. “You need, at minimum, two digitally savvy directors to understand the rate of change, technology, and how to use technology to bring costs down, take friction and steps out of the customer journey, and truly understand future differentiated business models.”⁸

How important are these broad-ranging perspectives? Allstate CEO Tom Wilson cited valuable insights into customer behavior from a board member experienced in “connected car” startups and the manufacturing/OEM space.⁹ And imagine the fate of Netflix if someone hadn’t flagged changing habits in TV and movie consumption as a game-changing trend.

According to Ralph Loura, who’s been an executive with Rodan + Fields, Clorox, and HP, boards can change their value-creation outcomes by becoming more digitally focused. “Like a lot of things that have happened around IT in the past, supply chain automation, financial consolidation, this was at first thought of as ’Oh, this is just an IT project.’ But then something like 70 percent of all CRM implementations were considered failing at some level, and people realized they were treating these implementations like an IT project, instead of business projects.”¹⁰

Disruption in the Entertainment Industry Inspires a “Fashionable” Startup

Sometimes the best way to sense that a business model is changing is to see it in action. StitchFix founder and CEO Katrina Lake was studying Blockbuster and Netflix in her previous role as a venture capitalist when she realized the way people were consuming movies was evolving toward a subscription model.¹¹ She sensed that similar changes might be happening in retail and built a $977 million company on that insight.

Bringing on members with fresh perspectives on value creation is only part of the battle, however. Boards must be able to dra...

Indice dei contenuti

• Cover
• Title Page
• Copyright
• Foreword
• Acknowledgments
• About the Authors
• Introduction
• Part 1 Governance Practices in the Digital Age
• Part 2 Framework for Modern Governance
• Index
• WILEY END USER LICENSE AGREEMENT