Tag Archives: #boarddiversity

ESG x Governance (6): Law, Compliance, Value Add – Déborah Carlson-Burkart

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This is the sixth of a series of interviews intended to help our IDN members grapple with the ESG topic.
In this episode, we delve into the experiences of a lawyer and INED, and explore the insights she has gained in the course of her career.

Déborah Carlson-Burkart

Déborah Carlson-Burkart, specialises in strategic legal, compliance, and governance matters. She chairs committees for transforming companies and has advised on corruption, fraud, and money laundering investigations throughout her career, guiding regulated, listed, and private firms through transformative processes, especially under regulatory scrutiny.
Currently serving as an independent non-executive director at Visana Insurance Group, Fintech Bank N26, and technology company RUAG International, Déborah holds a law degree from the University of Zurich, an LL.M. from Duke School of Law, and a board certification from INSEAD. Fluent in four languages, she also lectures on governance and compliance at the University of St. Gallen and the Swiss Board School.

In your view: What is the relevance of ESG for overall company governance and success?

As a lawyer with decades of experience in compliance and governance, I’ve come to firmly believe that ESG factors are pivotal for overall company governance and success.
Having worked extensively with companies facing compliance challenges for over 25 years, I’ve witnessed first-hand the significance of ESG. It’s no longer a niche concern but a critical component of every company’s risk management strategy.
Effective governance demands the integration of ESG factors into decision-making processes, serving as a compass for navigating risks and seizing opportunities. This is particularly relevant in three key areas:

  • Risk management,
  • Long-term sustainability, and
  • Stakeholder management.

Companies that prioritise ESG are better equipped to navigate complex regulatory environments and capitalise on emerging opportunities. Even in highly regulated sectors, such as someones I am involved in, ESG-focused companies demonstrate greater agility and resilience.
In my capacity as a guest lecturer, I emphasize the importance of ESG, drawing from practical examples. Across the boards I serve on, ESG has become a central agenda item. While each company may prioritize different aspects of ESG based on its operations, the overarching commitment remains consistent.

For instance, at Beyond Gravity, a company specializing in satellite technology and aerospace, we’ve set ambitious ESG goals, aiming to lead the industry by 2025. This involves a targeted focus on environmental and social aspects, such as supplier monitoring and energy efficiency.
Similarly, at N26, an online bank operating across Europe, our emphasis is on governance and social responsibility, addressing compliance issues and fostering inclusivity.
Finally, with Visana, a comprehensive insurance provider, we’re undertaking specific projects to enhance our ESG performance, from sustainable investments to fostering a diverse and equitable workplace.
In each case, our approach to ESG is tailored to our company’s profile and priorities, reflecting a commitment to responsible and sustainable business practices.

What is the value add of ESG, including compliance and risk management, in overall company governance and success?

In my view, illustrated by the examples I’ve just shared, ESG initiatives offer more than just compliance and risk management—they add tangible value. While compliance and risk management are crucial and easily recognizable benefits, there’s a deeper impact. Allow me to elaborate with a case involving Viasana, where we’ve made numerous investments due to our surplus cash.

Firstly, integrating ESG principles enhances long-term financial performance. This, in turn, elevates our reputation across multiple dimensions. Reputation matters greatly—it not only attracts investors but also makes us an employer of choice. In an era where finding suitable talent for meaningful projects can be challenging, being an attractive employer is paramount.

Effectively, by prioritising ESG considerations in decision-making, we become a sustainable and trusted entity. This not only appeals to investors but also helps in risk mitigation and fosters sustainable growth. The potential benefits are considerable, though it’s important to acknowledge that there are costs involved. However, in my assessment, the positives outweigh the negatives.

How is the perception of ESG shaped differently across various markets?

Geographical disparities in ESG implementation, stem from diverse factors, ranging from regulatory frameworks to cultural norms and stakeholder expectations.
In Europe, for instance, regulatory standards are notably stringent compared to other regions. This is partly due to e.g. a lower tolerance for corruption, as evidenced by the region’s position in corruption indices. Compliance with regulations necessitates a shift in perspective, pushing us to consider long-term goals beyond immediate gains.

To illustrate, at Beyond Gravity, we’ve set an ambitious target to achieve a zero environmental footprint by 2026. While this goal is challenging, we’ve developed a clear roadmap for decarbonization. Operating across 14 different countries adds complexity, but we’re steadfast in our commitment.

Adapting our implementation strategies to accommodate geographical nuances is imperative. However, our overarching objective remains consistent—achieving a zero or net-zero environmental footprint by 2026. We’re making progress, and with continued effort, we’re optimistic about reaching our target.

Based on your experience, where do you see the biggest alignment gaps between executive leadership teams and non-executive boards regarding ESG? What are your recommendations for non-executive boards to address these gaps?

The issue of misalignment between the board and the executive or leadership team is not exclusive to ESG management but rather a pervasive concern. Misalignment can manifest in various areas, and with ESG, given its relatively new prominence, there’s heightened awareness of potential discrepancies. Conversely, in financial matters, there’s often an assumption of alignment, only to realise differences during implementation or when objectives aren’t met.

I perceive three primary sources of misalignment:

  • A lack of understanding,
  • A lack of focused attention, and
  • Divergent goals.

Understanding ESG is complex, encompassing environmental, social, and governance factors with no universally agreed-upon definition. Consequently, there’s a learning curve, compounded by busy schedules, which can lead to knowledge gaps within both the board and executive ranks.

Additionally, competing priorities vie for attention amidst already full agendas, diluting focus on ESG initiatives. Moreover, executives may prioritize short-term gains, while boards often espouse a longer-term, sustainability-oriented perspective, inherently misaligning priorities.

To mitigate these challenges, many companies, including ours, have appointed dedicated managers for ESG, ensuring visibility and cross-functional connectivity. Aligning management and board goals is crucial.

One effective strategy we’ve adopted at one of the companies involves tying the annual bonuses to achieving company specific ESG targets. This approachfosters alignment across the organization, with bonuses linked to collective ESG success.

While not without its complexities, this strategy streamlines efforts toward a shared objective. It underscores the importance of cohesive goal-setting and incentivise alignment across hierarchical levels.

Where do you see the biggest gaps for board directors to become ‘ESG fit’? How can boards efficiently upskill in this regard, and what should be the priorities for board chairs?

Let’s address your second question first. The key to advancing without stepping on anyone’s toes lies in continuous education. INSEAD, for instance, offers a wealth of opportunities for ongoing learning. The courses and resources available are exceptional and immensely beneficial. In my view, just as with any emerging field, board directors must prioritise continuous education to refine their skills and remain effective.

ESG literacy, akin to financial literacy, should be a fundamental requirement for board members. Additionally, as technology like AI becomes increasingly significant, AI literacy will also become essential. In our INSEAD cohort (IDP 29), we’ve fostered a close-knit community. Regular meetings every two weeks allow us to share insights, best practices, and even failures. This collaborative approach ensures that each member stays updated and continually improves.

Continuous education is particularly crucial in the realm of ESG. Given its complexity and evolution, one never truly finishes learning. Engaging with peers and staying abreast of developments ensures that fundamental skills are consistently honed.

Returning to the question about chairing boards, a simple yet effective strategy is to prioritize ESG on the agenda. It’s imperative that ESG principles are deeply understood and integrated into every aspect of board and management decision-making.

As a chair, personal commitment to continuous improvement is vital. For instance, I chair three nomination and compensation committees, emphasizing the importance of ongoing education through these committees’ agendas. Additionally, being involved in two audit committees ensures that ESG reporting is meticulously overseen. However, it’s crucial to remember that execution is just one aspect—cultivating a culture shift towards ESG is equally essential.

In essence, like many endeavours in life, the energy invested in ESG initiatives yields growth. It requires a mindset shift and the dedication of at least one committed individual on the board to champion this cause. Mere box-ticking won’t suffice; what’s needed is a genuine commitment to play by the rules and sometimes a cultural transformation. .

Looking forward, what will be the biggest ESG-related challenges for non-executive boards, and what can companies do to address them?

When considering the most significant risks from a board perspective, three critical areas come to mind, based on my experience overseeing major companies:

  • 1. Environmental Risk Management: Especially when operating internationally, the challenges posed by environmental concerns loom large. Effectively addressing these issues is paramount to our operations.
  • 2. Social Responsibility Assurance: The landscape of social responsibility evolves rapidly, with geopolitical shifts and societal changes. Remaining vigilant and responsive to these changes is essential to upholding our commitments.
  • 3. Governance Oversight: While governance may seem straightforward, the reality is that boards often face challenges in critically assessing their own practices. Vigilance in governance starts at the top and requires continuous evaluation.

In today’s business environment, companies must navigate a myriad of regulations and expectations related to sustainability, diversity, inclusion, ethics, and transparency. The breadth of these considerations is vast and requires constant attention.

ESG serves as a tool to achieve and be held accountable for sustainability, a goal that transcends generations. Cultivating a sustainability mindset among decision-makers and influencers within the organization is crucial. They need not hold formal positions of authority but should influence and advocate for responsible and sustainable practices, recognizing our duty to stakeholders present and future.

I consider myself fortunate to collaborate with CEOs who recognize ESG as not just a moral imperative but also a sound business strategy. Their leadership underscores the potential for ESG initiatives to yield returns on investment and drive growth.

Indeed, sustainability presents not only a responsibility but also an opportunity for innovation. Across industries, including our endeavours at Beyond Gravity, in insurance, and banking, we explore how sustainability can catalyse the development of new products, services, markets, and revenue streams. We leverage sustainability to chart a course towards success and resilience.

The interviewer: 

Dr. Pamela Ravasio, Shirahime

Dr. Pamela Ravasio is the founder and managing director of Shirahime Advisory, a Corporate Development & Responsibility Governance boutique consultancy. She serves as fractional Chief Sustainability Officer for companies and advises boards on ESG and governance. With a background in roles like Global Stakeholder Manager, she played a key role in making the European outdoor industry a leader in future-proofing.
She currently is a member of INSEAD’s International Directors Network.

ESG x Governance (5): The CSRD Challenge – Céline Abecassis-Moedas

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This is the fifth of a series of interviews intended to help our IDN members grapple with the ESG topic.
In this episode, we delve into the experiences of a seasoned business academic who is also an INED, and explore the insights she has gained in the course of her career.

Céline Abecassis-Moedas

Céline Abecassis-Moedas is an academic and corporate leader, with over 25 years of experience spanning academia, consulting, and board positions. She is the Dean for Executive Education and Associate Professor at Católica-Lisbon School of Business and Economics, and serves as a non-executive director on the boards of CUF (chair of the innovation and sustainability committee), Vista Alegre Atlantis in Portugal, and Lectra (Chair of the remuneration committee and member of the CSR committee) in France. She also was on the board of Europac in Spain and of CTT and Grrenvolt in Portugal. She earned her PhD from Ecole Polytechnique, a MSc from Dauphine University (France), and is also an INSEAD IDP-C certified independent non-executive board director.

How does ESG, particularly with the emergence of the CSRD, impact company governance and success?

In my view, the relevance of ESG for overall company governance and success is multifaceted. Firstly, it’s a requirement. Legislation is evolving, and 2024 is a pivotal year as companies will need to report increasingly detailed ESG information due When I say it’s a requirement, I’m referring to the Corporate Sustainability Reporting Directive (CSRD). The first cohort of large companies will need to report on their fiscal year 2024 activities under this directive.
From my perspective, obtaining this information is quite challenging, especially for SMEs, which are often suppliers to the companies on whose boards I serve. It’s like we’re reinventing accounting or creating a parallel system of accounting. We must report all these new metrics, and many companies are unsure where to begin.

What’s the added value of ESG beyond compliance and risk management, considering your board and academic experience, and do you see any geographical variations in its importance?

Yes, it’s an interesting topic. Last week, during our Advanced Management Programme (AMP)—the most senior programme we have— I invited a guest speaker (a female seasoned expert in the area) to discuss the Corporate Sustainability Reporting Directive (CSRD) because it’s a major topic. She titled her talk “CSRD: Challenge or Strategic Opportunity,” which aligns perfectly with what we were considering. While not all companies view it as an opportunity, some definitely do.
For example, I serve on the board of a company in technology for the fashion industry that focuses on computer-aided design and manufacturing. They report on metrics such as energy usage and improvements over time. This company structurally benefits the environment by helping its clients reduce waste. However, since it’s their clients’ waste being reduced, it doesn’t directly reflect on the company’s own sustainability metrics, which is frustrating. The fashion industry is highly polluting, but by enabling on-demand fashion and reducing waste, this company contributes to sustainability. This exemplifies how CSRD can be seen as an opportunity rather than just a challenge.
On the other hand, I also sit on the board of a ceramics company, which uses a lot of energy. The recent rise in energy costs has been a financial nightmare for them. They’re now considering changing their energy sources to become less dependent on traditional, more polluting options. For them, CSRD is more of a challenge, but it can become an opportunity.
I notice more industry-specific differences rather than geographical ones. My experience is mostly in continental Europe—Portugal, France, and some in Spain. I suspect the topic is less pressing in the US, but I don’t have detailed information on that.
I am an optimist and believe CSRD presents opportunities for those who understand what is at stake. In the last two years, I’ve seen the growing importance of our role as non-executive directors in this area. While executives drive these initiatives, we have a significant responsibility bring external perspectives and best practice from company to company. This makes our work as non-executives particularly valuable.

What alignment challenges do you observe between executive leadership and non-executive boards in terms of ESG, and what recommendations would you offer to address these?

In terms of alignment, I also see the need to balance the Environmental (E), Social (S), and Governance (G) aspects of ESG. When people talk about ESG, they often prioritize the Environmental part, while the Social and Governance parts receive less attention. Two companies where I serve on the board—a tech company, and a healthcare company—are very people-oriented. Both have faced the issue of doing a lot in terms of social initiatives but not reporting it effectively. It’s a pity because their efforts are not visible. They needed to make an effort to report better, use more KPIs, and show their social impact more clearly.
The environment part is always present and significant but difficult to address. As for governance, it’s often assumed to be well-managed, but it should receive more focus. This could be because governance was previously well-handled, or because the other two areas need so much attention that governance is overlooked. I believe it’s a bit of both.
In governance, two things are particularly important, diversity and processes. Diversity on the board is essential, beyond just gender diversity. Diversity is becoming mainstream, but it’s crucial to extend it beyond gender. More than anything it is the existence of processes that guarantees good governance.
Finally the balance between the three and they interact is core and needs to be looked at.

What are the main gaps for boards to become ‘ESG fit,’ and how can they efficiently up-skill directors? What should Board Chairs prioritize?

What I’ve been observing more and more from the inside is that, in the last year or two, companies are increasingly hiring for ESG roles. They are bringing in consultants and hiring dedicated ESG personnel within the company. It’s like we’re creating a second accounting system and now building the team for it.
If you compare it, today a company might have an accounting team of 25 or 30 people for regular accounting and only two or three for ESG. It will take time to build up to the same level, but that’s where we are getting. As both a board member and an academic, I see that even the most dedicated companies often don’t know where to start. The CSRD rules are very demanding, still being designed, and this creates a significant challenge. Companies often don’t know where to begin. They are seeking help from consultants, but even the consultants are still learning. This situation is both exciting and a bit scary because we are all learning as we go.
For boards to be “ESG fit,” the biggest gap to close is in understanding and capability. Boards need to prioritize building their own knowledge and skills in ESG. This means Board Chairs should create ESG training for board members, hire or consult with experienced ESG professionals, and integrate ESG considerations into the core strategy of the company.
Efficient and effective up-skilling can be achieved through dedicated training programs, learning from best practices, and ensuring ongoing education on the evolving ESG regulations and expectations. It’s essential to foster a culture of continuous learning and adaptation to keep up with this rapidly changing field.

What are the primary ESG challenges ahead for non-executive boards, and how can companies address them effectively?

I think the big challenge is not just having a strategy and an ESG strategy separately, but rather integrating ESG as an essential part of one cohesive strategy. Not all companies are ready for this integration, and in some cases, it might require significant changes that are daunting for them.
The role of the board is essential here. Because we have a broader perspective and can bring insights from across different companies, non-executive directors have a unique responsibility. For example, I serve on the boards of three companies with different activities, but the discussions we have in one often become relevant in another.
One example I’m proud of is how we integrated ESG into the variable remuneration of the CEO at one of the companies. As the Chair of the Remuneration Committee and a member of the ESG Committee, I led multiple discussions to include ESG criteria in the CEO’s variable pay. For 2024, 50% of his variable remuneration will be based on ESG performance, which is a significant change. Next year, we plan to extend this to a few more executives and eventually further throughout the company. This makes ESG truly strategic; if variable remuneration is tied to both EBITDA and ESG, it changes priorities significantly.
Another critical issue is getting the right information, which is often challenging. In the private healthcare group that I sit at the board of, we discovered that anaesthetic gases had the same carbon footprint than their entire fleet of vehicles. Initially, this seemed like a mistake, but after thorough checks, including comparisons with NHS data, it was confirmed (Desflurane has a significantly higher global warming potential compared to Sevoflurane). We then had to convince doctors to switch to the gas with the lower carbon footprint. This example illustrates how crucial it is to have accurate information; without it, significant impacts can go unnoticed.
In summary, for boards to be “ESG fit,” they need to integrate ESG into their core strategy and ensure accurate information flow. Prioritizing ESG training, hiring knowledgeable professionals, and setting clear ESG metrics in executive compensation are key steps. This approach not only aligns short-term actions with long-term goals but also makes ESG a fundamental part of the company’s success.

Could you provide an overview of University’s upcoming CSRD preparation program, its objectives, target audience, and key features?

The programme is still a work in progress, we aim to launch it by October. It will be called ESG Strategy and Reporting. The idea is to address the needs of the many companies that will soon be required to comply with the CSRD. For example, in Portugal, around 1,200 companies will need to report, a significant increase from the current number. The top 50 companies probably have the resources and knowledge, working with large Audit firms. However, the remaining thousand companies probably don’t know where to start.
Our goal is to build a programme that helps guide these companies through compliance. We’re still finalizing the length and cost because it needs to be accessible. We also want to involve the right experts, as few people have deep knowledge of the CSRD requirements. The programme will include expert instruction and numerous guest speakers from top companies that have already begun this process. We aim to create a community where participants can share best practices and support each other during and after the program. These companies are not in competition; they are facing the same challenges and would benefit from working together.
We see this as a significant opportunity, but we acknowledge that auditors are already moving into this space, which is only fair. We will need to collaborate with them to ensure the programme’s success.

The interviewer: 

Dr. Pamela Ravasio, Shirahime

Dr. Pamela Ravasio is the founder and managing director of Shirahime Advisory, a Corporate Development & Responsibility Governance boutique consultancy. She serves as fractional Chief Sustainability Officer for companies and advises boards on ESG and governance. With a background in roles like Global Stakeholder Manager, she played a key role in making the European outdoor industry a leader in future-proofing.
She currently is a member of INSEAD’s International Directors Network.

Women chairs to drive diversity across the business

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This International Women’s Day 2022, Helen Pitcher OBE, IDN President shares her thoughts on the role that women chairs play as a driving force for diversity across businesses.

It is widely recognised that the two critical dimensions driving equality in the organisational and business workplace are the roles of Chairman and CEO.  Currently however, they are acting as barriers to progression, with the woeful lack of diversity in our Chairs, CEO’s and Executive Leadership populations.  The recent FTSE Women Leaders Review Feb 2022 again highlighted this issue especially in the CEO and Executive Leadership landscape.

“The number of women in the very top job, that is the CEO remains flat and stubbornly low, and there is much more to do on Executive Committees.”

The annual Female FTSE Board Report by Cranfield University shows a positive gender progression at the NED Board level, but throws into stark relief the lack of progress on gender equality in the C-Suite, with the female Chairman leadership of our Boards at 11% in the FTSE 100 and 14% in the FTSE 250 and with only 8% female CEOs across the FTSE 350.  Additionally, female participation in executive leadership has flatlined at 13.7% in the FTSE 100 and 11.2% in the FTSE 250.

We are relying on traditional and slow solutions to solve an unsustainable situation; we need to employ spiralling creativity and innovation to drive change.  This should be a revolution of action, thought and imagination to break the mold and learn new ways of thinking and acting.

The classic rationalisation to the lack of progression for women in CEO, Executive Committees and Senior Leadership roles is the ‘supply deficiency.’  The research done by Assistant Professor Shirley Lu (Harvard Business School) indicates that we could be waiting a long time for the ‘supply side’ environment to change voluntarily.  At the same time, we have the insight from the Cranfield Report of the many capable female leaders who are around, ready and able to fulfil these most senior roles.

While the average tenure of CEO’s at 5 years, provides an insight into their short-term focus, there is little excuse for Chairman to ignore this inequality with their generational stewardship of the business.

In a recent article I suggested that Quotas was the only way to break this log jam, starting with the role of the Chairman at 40%, in order to drive diversity throughout our companies.  The female Chairs are available, ready and waiting for these appointments as demonstrated by the Cranfield Report.

It is time to act, and let’s not kid ourselves that ‘voluntary’ action alone will solve this issue.  The original 2011 Davis Review ‘Women on Boards’ was commissioned and driven by the Government who were concerned about the slow rate of progress of women onto Boards.  It did not spontaneously emerge for companies, the FRC or Companies industry bodies seeking to drive change.

The FTSE Women Leaders Review which is supported by Government and builds on the work, and success, of the Davies and Hampton-Alexander Reviews, has recognised this dilemma.  The Review has set a new recommendation for the Senior Leadership of the FTSE 350 business.  Namely, that a women should be in at least one of the most senior roles in a FTSE 350 business by 2025.  Those roles are the Chair, Senior Independent Director, CEO or CFO.  While this is a good first move, it fails to recognise the dominance of the Chair and CEO roles as the primary driving force for diversity across our businesses.

The Chairman and CEOs have had their chance to progress voluntarily, and they have failed.  It is now time for Governments, Regulators, Female Chairs, NEDs and the Diversity Lobbying Bodies, to say enough is enough, the time for substantive action to break the behavioural anchors has arrived.  Only an immediate progress on the levels of Women Chairman will drive out this inequality of female CEO’s and Leadership Executives across our business landscape.  I would be delighted to see the FTSE Women Leaders Review Recommendation drive a significant upward movement to a 40% target of women Chairs, I remain vigilant however, as to what will be achieved by the end of 2025.

IDN celebrates International Women’s Day 2022

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IDN celebrates International Women’s Day 2022

Over 50% of IDN’s board members and ambassadors are women

This March 2022, INSEAD Directors Network (IDN) celebrates International Women’s Day.

In line with INSEAD’s commitment to cultivating a community that pursues equity, exemplifies inclusion, and cherishes diversity, IDN’s board embraces gender diversity.

As of 8 March 2022, four out of the eight IDN board members (including our President, Helen Pitcher, Helen Wiseman, Pamela Ravasio and Karen Loon) are female.

Further, following the recent appointment of Mary Antenen as our IDN Swiss Ambassador, 12 of our 20 IDN ambassadors (60%) are women.

Why is greater board diversity important for organisations?

  • It makes business sense. To date, academic and business research has focused on the business case for greater board diversity and have sought to demonstrate a correlation between board diversity (principally gender) and greater financial performance. This includes a broad range of areas, including financial position/performance, public disclosure, socially responsible behaviours, firm decisions, philanthropy, reputation, and innovation.[1]In 2020, a study in Australia by Curtin University took this a step further and found a causal link between greater numbers of women on boards and in leadership and better financial performance.
  • Stakeholders expect it – In line with the global focus on stakeholder capitalisation and sustainability, investors increasingly expect organisations to have greater board diversity. For example, in the past 12 months, several asset managers have updated their proxy voting requirements on gender diversity to now cover listed companies in some markets in Asia. Further, increasingly more governments, regulators, professional organisations and advocacy groups have released regulations and guidelines which encourage improvements in the pipeline of available diverse candidates for boards. These include a greater focus on disclosure of board diversity policies and reporting measurable progress in improving board diversity.

Yet, whilst women are estimated to hold 19.7% of board seats globally, a 2.8% increase from 2019, progress has been slow and inconsistent. Further, according to Deloitte, only 6.7% of board chairs are women, and only 5% hold the CEO role.

While many argue that it is important to have at least 30% women on board, having greater diversity without a focus on board dynamics will not necessarily lead to greater performance.

Board chairs and other directors also need to create inclusive cultures that allow healthy discussion and dialogue in a safe space.

How can IDN members support greater diversity in the boardroom and #breakthebias?

Create the right culture and board dynamics

  • Invest time in group dynamics and board development. For boards to be effective, it is vital to create the right environment and dynamics in the boardroom. In our IDN webinar on Positive Board Dynamics and Coaching: Key to Superior Performance held on 8 July 2021, Professor Vincent Dominé of INSEAD highlighted that “collective behaviour at the board level has an 800% greater impact on a firm’s performance than the characteristics of individual directors”, according to the benefits of boards working effectively as a team. Emphasising the importance of having psychological safety in the boardroom, Professor Domine highlighted that investing time in group dynamics and board development is essential.
  • Adopt Fair Process Leadership. Another framework that supports better board dynamics is Fair Process Leadership. Many IDP attendees would be familiar with the importance of having Fair Process Leadership in the boardroom. As Professor Ludo van der Heyden of INSEAD argues: “the sustained practice of fair process leads to greater value creation for a corporation’s stakeholders and increases the trust that society awards the business. Fairness is not an option: it is fairness for the board and ultimately business performance.” Using the FPL framework in the boardroom will support greater board effectiveness.

Grow the pipeline of female directors

  • Mentor aspiring and new female directors. The journey to becoming a director is often opaque. IDN’s experience is that board mentors play a key role in supporting the successful transition of senior executives and new directors into their roles. As one of our IDN mentees said in 2020: “Normally it takes years to come up the NED learning curve…and a few mistakes along the way. My mentor saved me a year or two easily.”
  • Encourage greater diversity in your organisations – Understand from the management of the organisations where you are a board member how they manage diversity. Ask them questions such as: how does greater diversity align with your organisational purpose, lived values, and behaviours? What are some of the inhibitors, both conscious and unconscious, inhibiting change? How is greater diversity embedded into all areas of your organisation, including beyond talent management? And are your organisation’s senior management (especially women) encouraged to take on external board roles as part of their leadership development programmes?

 

Karen Loon IDP-C is an IDN Board Member

[1] For example, refer to the overviews of recent research by Kagzi and Guha (2018) at https://www.emerald.com/insight/content/doi/10.1108/JSMA-01-2017-0002/full/html, and Salma and Qian (2021) at https://www.journalofbusiness.us/index.php/site/article/view/182.