How having a board mentor supports lifelong learning

As told to Karen Loon, IDP-C and IDN Board Member.

“Never hesitate to ask for guidance, empathy, advice and support” – Virginia Brumby Ferreira

Virginia Brumby Ferreira MBA’09J, a recent mentee in the 2020 INSEAD Directors Network (“IDN”) INsights Director Mentoring Programme is a typical INSEAD MBA.  After completing her MBA, she became an entrepreneur, leader, and board director.

“In true INSEAD spirit, I changed absolutely everything post-INSEAD: I moved to a new country, switched sector, and became an entrepreneur for the first time – in fact, the business I set up was my INSEAD MBA project!  A decade later, after the most challenging, fulfilling (and fun!) decade of my life, I am still running that same company. None of it would have been possible without my incredibly supportive INSEAD friends and network”.

As a result of her enthusiasm to give back, she has been an active member and has taken on board and leadership roles with the Singapore NAA, as well as the INSEAD Alumni Fund.

On how she developed her board portfolio, “’Pursue’ is not the right word; my board roles are more a consequence of my chronic inability to say no. Friends call me a ‘serial volunteer’ since I tend to constantly raise my hand and get involved in all kinds of projects, from fundraising to event organisation to helping out aspiring entrepreneurs and businesses with their strategy and communications. After years of involvement, there was a natural evolution into more board and leadership roles”, Virginia shared.

Lifelong learning from director mentors

In 2020, Virginia felt it was time to invest in her board career, and joined the INsights Director Mentor Programme.  She was matched with an experienced female board chair.

“Having been my own boss for many years, as well as an Entrepreneur-in-Residence at INSEAD, I was thrilled at the prospect of getting advice and guidance, instead of giving it!”

Virginia met her mentor, who was based in a different country, monthly, via Zoom.  They adopted a relatively informal approach that fit their personalities and goals for the programme, but with action points to follow up on after each discussion.

The range of topics discussed was also broad.  “Some of the subjects I most enjoyed discussing were the most unexpected – such as appreciating the role of serendipity in our personal and professional lives, knowing when it’s time to close a door, and making the ‘highest and best use’ of our most precious resource – time!”

Virginia enjoyed sharing experiences with her mentor.

“Being able to share openly with both my mentor about our respective journeys — including the disastrous moments! — helped me put my own challenges in perspective and find a way forward” – Virginia Brumby Ferreira.

Learning from director peers

Another benefit was having an opportunity to learn from and be supported by other mentees through the monthly mentee sessions.

“I found the group discussions with my fellow mentees both practical and inspiring. They shared a wealth of experience, and the overall atmosphere in the group of acceptance, inclusivity and encouragement was especially important during this roller coaster year”, she remarked.

Leveraging the power of the INSEAD network

Virginia suggests that new directors should seek advice early in their careers.  “Even the leaders we most admire and idolise (the mentors in this programme are excellent examples) didn’t get there on their own. Never hesitate to ask for guidance, empathy, advice and support”.

She highly recommends that a good place to start is to leverage the INSEAD community and in particular, in relation to board experience, other IDN members.

 

To find out more about IDN’s INsights Director Mentoring Programme, visit here.

 

INSEAD Directors Network (“IDN”) – An INSEAD Global Club of International Board Directors

Our Mission is to foster excellent Corporate Governance through networking, communication and self-improvement. IDN has 1,500 members from 80 countries, all Alumni from different INSEAD graduations as MBA, EMBA, GEMBA, and IDP-C. We meet in live IDN webinars and meet-ups arranged by our IDN Ambassadors based in 25 countries. Our IDN website holds valuable corporate governance knowledge in our IDN blog, and we share insights also to our LinkedIn and Twitter  followers. We highlight our member through quarterly sharing of their new board appointments and once a year we give out IDN Awards to prominent board accomplishments. We provide a peer-to-per mentoring and board vacancy service and we come together two times per year at the INSEAD Directors Forum arranged by ICGC. We also engage with ICGC on joint research.

INSEAD Corporate Governance Centre (“ICGC”)

Established in 2010, the INSEAD Corporate Governance Centre (ICGC) has been actively engaged in making a distinctive contribution to the knowledge and practice of corporate governance. The ICGC harnesses faculty expertise across multiple disciplines to teach and research on the challenges of boards of directors in an international context and to foster a global dialogue on governance issues with the ultimate goal to develop boards for high-performance governance. Visit ICGC website: https://www.insead.edu/centres/corporate-governance

 

Why Some Boards Add Value and Some Don’t

Webinar Summary of Lifelong Learning IDN Webinar

By Karen Loon IDP-C with inputs from Roy Ling GEMBA

How do boards and board directors best equip themselves to deal with the challenges of innovation and disruption, and how do they add value? 

INSEAD Directors’ Network (“IDN”) members Denise Koopmans IDP-C, Roy Ling GEMBA, and Hagen Schweinitz IDP-C shared their diverse views and experiences on these questions in an INSEAD Lifelong Learning session by IDN, sponsored by the INSEAD Alumni Association on 19 January 2021.  The session was chaired by IDN Board Member, Liselotte Engstam IDP-C.

Prior to the session, participants were surveyed and asked to share their views on the effects their boards have on company value. The key findings suggest that the top area which boards have been focusing on in more recent times is value adding strategies.

The panellists shared their candid views and insights, as well as practical feedback on key developments in corporate governance in more recent times.  These included:

  • How boards can be successful at creating value – Successful boards invest sufficient time on board work; maintain a well-rounded team; and have an effective chairperson who runs meetings well, as good leadership sets the tone for the board as a whole and sets the stage for a more value enhancing board.  As Roy Ling shared:

Boards should maintain a well rounded team with a culture of trust and respect, where directors and management challenge each other with constructive feedback”.

  • Changing dynamics in the way boards work – Boards are becoming increasingly agile and forward looking, working together through many challenges. They are discussing strategy and scenario development more frequently.  More backward-looking topics are being discussed in committees.  Decisions are being made faster, there is more focus on task forces to deal with certain topics, and more open flow of information.
  • Having board diversity – Not just in the areas of gender, age or experience, but diversity of opinion, personalities and capabilities. Directors need to be comfortable with differences of opinion.  A question which was discussed was how good companies are at finding independent directors.  The panellists also shared that whilst specialist skills such as digital, innovation and sustainability are important, directors also need to have other skills such as leadership and being able to operate in a team to be effective in the boardroom.
  • A growing focus on board reviews – With the increasing need to further professionalise boards, leading boards undertake regular self-assessments on board performance on Board composition and dynamics, how boards perform specific board tasks and how boards operate. More advanced organisations focus more interviews and less on questionnaires.  Annual review processes including the use of peer reviews with 360-degree feedback are also becoming more common.  Many also obtain external third party periodic “health checks” to evaluate the feedback process.

Participants highlighted that they believe that the top area of focus of their boards in 2021 will be digital innovation.  The panelists also shared that areas such as talent management, human resources and effective board processes should not be ignored by boards in 2021.  As Denise Koopmans shared:

Boards have  become more leading, agile and forward looking. They have speedy and resilient decision making processes with ad hoc committees, deep dives and task forces as support. The board agenda is more geared towards strategic challenges and the role of the Chair as facilitator is critical.

On board processes, many boards remain focused on upholding corporate governance and compliance with regulations.  However, a challenge is that directors who have extensive views on how to reinvent the company and its business model may often not receive adequate attention from the board due to limited board time. One suggestion was that perhaps an ‘Innovation Committee’ should be formed to get more board attention. The innovation committee role is to actively motivate and facilitate management’s ideas and initiatives on innovation and productivity.

Another idea was that a review of the board’s agenda is a good way to measure board effectiveness. If the same items are appearing on the agenda with no resolution, it may be an indication that the board lacks the necessary expertise to deal with the issue.

How can directors keep up to date?

A challenge for most directors is how can they keep up to date as a board member.  In addition to leverages such as the IDN network, recommendations included:

  1. Engaging between board meetings. Not just about spending more time on board strategy, it’s also about being able to connect with management in between meetings and staying current. But how often should they meet? Boards need to experiment to figure this out, but the key is to remember that boards are only as good as the information they have access to.
  2. Engaging with strategy as it is forming. Directors can participate early in the formation of strategy and stress-test it along the way, as opposed to reviewing a strategy that’s been fully thought through by management.
  3. Engaging on the tough questions. It is important to ask uncomfortable questions that extend beyond strategy sessions to a wide range of issues. Every board member does not necessarily need to have industry experience, but you must have the courage in the boardroom to ask the difficult questions.

As Hagen Schweinitz shared:

Being a board director is now a profession with a lot of obligations. And future board reviews will look at how board members behave, interact and how independent they are.

COVID-19 has reshaped board strategy

COVID-19 has certainly disrupted and reshaped how boards undertook strategy work in 2020. While many boards are tempted to refocus from long-term growth to short-term survival due to COVID-19, this could be a grave mistake. Instead, boards should capitalize on the COVID-19 opportunity to reposition and pivot their companies to strengthen their positioning and come out ahead. The participants suggested that boards need to be aware of three areas.

  1. Resilience comes through speed. COVID-19 gave rise to many uncertainties and changes. But boards need to guide management processes for fast responses. The point isn’t to have the right answer. The point is to build organisational capability to learn quickly why your answer is wrong and pivot faster than your peers do.
  2. Beware of a gulf between board and management and workers. While it is relatively easy for boards and management to switch to remote working, and they see it as effective and efficient, those in the trenches may not see it as so.
  3. More than ever, a bias to action is essential, which will frequently mean getting comfortable with boardroom disagreement.

Looking ahead

While 2020 has been a year of disruption, 2021 is a year of renewal.  Some areas for board directors to watch out for are:

  1. Always work on your own game as a director – Continuing education remains important.
  2. For people who want to join boards, carefully check if there is a match between your skills and the needs of the company, as well as a good fit and trust. Remain resilient and have sufficient time for your board roles.
  3. Spend even more time on board strategy – Manage through the COVID-19 crisis and into the new normal. Renew board processes to make them more effective and efficient.  Balance trust with challenging discourse.  Consider appointing an ambitious Board Chairman and rethink the annual agenda in 2021.

 

INSEAD Directors Network (“IDN”) – An INSEAD Global Club of International Board Directors

Our Mission is to foster excellent Corporate Governance through networking, communication and self-improvement. IDN has 1500 members from 80 countries, all Alumni from different INSEAD graduations as MBA, EMBA, GEMBA, and IDP-C. We meet in live IDN webinars and meet-ups arranged by our IDN Ambassadors based in 25 countries. Our IDN website holds valuable corporate governance knowledge in our IDN blog, and we share insights also to our LinkedIn and Twitter  followers. We highlight our member through quarterly sharing of their new board appointments and once a year we give out IDN Awards to prominent board accomplishments. We provide a peer-to-per mentoring and board vacancy service and we come together two times per year at the INSEAD Directors Forum arranged by ICGC. We also engage with ICGC on joint research.

INSEAD Corporate Governance Centre (“ICGC”)

Established in 2010, the INSEAD Corporate Governance Centre (ICGC) has been actively engaged in making a distinctive contribution to the knowledge and practice of corporate governance. The ICGC harnesses faculty expertise across multiple disciplines to teach and research on the challenges of boards of directors in an international context and to foster a global dialogue on governance issues with the ultimate goal to develop boards for high-performance governance. Visit ICGC website: https://www.insead.edu/centres/corporate-governance

Resource list

INSEAD Corporate Governance Centre (“ICGC”) research and articles

A checklist for boards in the new normal (INSEAD Knowledge Post)

Leadership in Risk Management (report)

The market for corporate directors (report)

Innovation & Corporate Renewal also disrupt Boards (report)

IDN Blogposts with related insights 

The evolving role of the board in the Covid-19 environment 

Board Dynamic Capabilities in Disruptive Times 

Can Digital Committees solve board challenges 

Getting your first board position 

Related webinar recordings

The End of Shareholder primacy?

Driving Tech for Good, the role of Company Boards 

Related Podcast Interviews

Create and believe in the Future with INSEAD Strategy Professor Nathan Furr

Experienced Board Chair INSEAD President Helen Pitcher OBE

2021 New Year Member Update

by Helen Pitcher OBE, President INSEAD Directors Network

Dear members – I trust that you are all well and are remaining safe in these interesting times.

2020 – A Year in Review

2020 was an extremely challenging, but interesting year for all of us as INSEAD Directors Network (“IDN”).  Our IDN board members have all continued to work hard to support our 1,500 members over the course of the year.  And like all of you, as board directors, IDN have moved our initiatives online and have been working in a more virtual basis.  Nevertheless, we believe that we provided significant value by supporting the lifetime learning of our members through our various initiatives which have run this year.  In addition to supporting initiatives of INSEAD, the INSEAD Alumni Association and the INSEAD Corporate Governance Centre (“ICGC”), our initiatives have included:

  • WebinarsUnder the guidance of Liselotte Engstam, IDN ran 15 webinars for members this year, which covered a wide number of topics, from managing during COVID, cyber, digital and sustainability, as well as how to get your first board mandate, which are all very topical interest areas of members.

  • Mentoring programme – We also revamped our mentoring program for new board directors and ran a successful program for 26 pairs of mentors and mentees on a fully virtual basis. Our mentors were experienced directors, many of whom were qualified IDP-Cs. This program was viewed by both mentors and mentees as a success. We will be running this program again in 2021, under the guidance of Helen Wiseman.  We will be seeking mentors and mentees for the programme so please do support this initiative.
  • Ambassadors Our network of 18 ambassadors under the guidance of Jeff Scott ran several in country initiatives to support our members over the year, many of which were on a virtual basis to allow our members to remain engaged with IDN, and to support their continuing education on a virtual basis. Events were held in geographies including Belgium, Singapore, France, the Americas, and Africa to share knowledge.  Please do connect with your local ambassador to find out more about initiatives in your geography.
  • IDN Inaugural 2020 Awards – Another new initiative we held in 2020, under the guidance of Thomas Seale was to recognise some of the most prestigious mandates which were awarded to IDN members. We awarded four of our IDN members with the Inaugural IDN awards for prestigious board positions. These were people who had been awarded what we have regarded as the most prestigious board positions, which were announced in our quarterly announcements, categorized into profit and not-for-profit categories. This included three female directors.

  • Advertising of board mandates – Under the guidance of Helen Wiseman, we advertised and placed a number of IDN members into international director positions.
  • Blog postsIn 2020, we also enhanced our blog posts where we have been sharing member viewpoints on topics of corporate governance, and providing our members who can’t attend our events, short summaries of discussions at our events. These details are shared via our social media on LinkedIn and Twitter.

Finally, to support our future growth, we have now established a legal entity in Singapore, INSEAD Directors Club Ltd. and have set up banking arrangements under the guidance of our Treasurer, Karen Loon.  This will support our further growth plans in 2021 and beyond.

What can IDN members look out for in 2021?

We expect to further refine and enhance many of the initiatives which we ran for members in 2020.  These include our webinars and our mentoring program, and continuing to support INSEAD and ICGC in Singapore and Fontainebleau, and collaborating more closely with the INSEAD Alumni Association and the National Alumni Associations around the world to support the lifetime learning of all INSEAD alumni.

Areas that we are working on in 2021 include:

  • Partnerships – We are on the lookout to partner with like-minded organizations who are interested in working with us to support our initiatives in corporate governance. If you do know of organisations who may wish to work with us on a global or local basis, please ask them to reach out to Dominic Nixon or Pamela Ravasio.
  • Ambassadors – We are looking to expand the geographical reach of our ambassador network in 2021. Watch out for further details.
  • Thought leadership – Representatives of our board have been working together with INSEAD faculty on various thought leadership articles on board dynamics and trends. Do sign up for our upcoming webinar on 8 February 2021 which will feature Stanislav Shekshnia, INSEAD Professor of Entrepreneurship and Family Business and Director of INSEAD Chair Program, and myself, Helen Pitcher OBE, moderated by Liselotte Engstam where we will discuss Modern Chair Practices.

We look forward to supporting our members on their corporate governance journeys. Please also do share with me or any of our board members feedback on how we can continue to support you as our members in your membership in your governance journey.

 

 

 

 

Helen Pitcher OBE, IDN President

Email – [email protected]

INSEAD Directors Network, IDN – An INSEAD Global Club of International Board Directors.
Our Mission is to foster excellent Corporate Governance through networking, communication and self-improvement. IDN has 1,500 members from 80 countries, all Alumni from different INSEAD graduations as MBA, EMBA, GEMBA, and IDP-C. We meet in live IDN webinars and meet-ups arranged by our IDN Ambassadors based in 25 countries. Our IDN website holds valuable corporate governance knowledge in our IDN blog, and we share insights also to our LinkedIn and Twitter  followers. We highlight our member through quarterly sharing of their new board appointments and once a year we give out IDN Awards to prominent board accomplishments. We provide a peer-to-per mentoring and board vacancy service and we come together two times per year at the INSEAD Directors Forum arranged by ICGC. We also engage with ICGC on joint research.

To find out more about IDN, visit here

To join IDN, visit here

About INSEAD Corporate Governance Centre

Established in 2010, the INSEAD Corporate Governance Centre (ICGC) has been actively engaged in making a distinctive contribution to the knowledge and practice of corporate governance. The ICGC harnesses faculty expertise across multiple disciplines to teach and research on the challenges of boards of directors in an international context and to foster a global dialogue on governance issues with the ultimate goal to develop boards for high-performance governance. Visit ICGC website: https://www.insead.edu/centres/corporate-governance

 

Getting your first board position

By Karen Loon, IDN Board Member and Non-Executive Director

What are the key actions that will increase the likelihood of getting your first board position?

INSEAD Directors Network (“IDN”) members recently had the opportunity to learn more about experiences and insights into the board recruitment process from four experienced IDN members:

in an exclusive webinar for members held on 1 December 2020 which was facilitated by IDN Board Member, Liselotte Engstam based in Sweden with Q&A support from Hagen Schweinitz, a fellow IDN Board Member based in Germany.

Participants heard from the panellists about their experiences getting their first board roles and growing their board portfolios.  They also had the opportunity to also to learn more about how an executive search firm can help directors.  Key advice by the panellists included:

  1. Invest in ongoing board education
  2. Have a clear vision on what roles make more sense to you
  3. Do thorough due diligence
  4. Build your board experience by collecting different facets of experience
  5. Don’t go it alone – find a mentor and a tribe to share and learn from
  6. Build your networks

Invest in ongoing board education

  • Continuous board education is important for all directors, even if you have had board roles as part of your executive career.
  • For international directors, consider both board education in your local market(s) as well as continuous education from programmes such as the INSEAD Directors’ Programme (“IDP”) and subsequently via the INSEAD Directors Network. The IDP programme provides participants with new perspectives including on the values and capabilities which they needed to act as independent directors and allows them gain greater perspective on the role of the board.
  • Keep your governance knowledge up to date but keep it practical and fit for purpose.

 Have a clear vision on what roles make sense to you

  • Do upfront research on what are the geographies, sectors and companies where you can and wish to best contribute. What is your unique selling proposition?  How many boards do you wish to be a director on?
  • Choose your targets by doing your research – what is the story behind the story i.e., what are they really grappling with at the boardroom table?  How might the current composition of the board be playing out?  Form a hypothesis and climb into the mind of the Chair.  What value do you bring both to the scenario and the different thinking styles and experiences of the board?
  • Get clear on your positioning so that people can easily remember you, build a networking plan (see below) based on the above research.
  • Prepare well for your interviews.
  • Collect your war stories for example from your executive, particularly crises requiring a collective with backbone to work through the issues, or influence across authorities – indicators of how you might perform on a board.

Due diligence

Be thorough on your due diligence on potential board roles.  Understand red flags and the culture of the organisation.

Build your board experience by collecting different facets of experience

  • Build your board experience by collecting different facets of experience to broaden your value offering for example industries, types of transactions/corporate actions, different stages in the life cycle etc.
  • Be willing to start on non-profit organisations and advisory boards.

Don’t go it alone – find a mentor and a tribe to share and learn from

  • Don’t go it alone, find a tribe to share experiences with and learn from (for example IDN, your local director association, Women on Boards).
  • Find a personal mentor (for example, a senior board director) who can help a new director to fine tune their communication styles for effective board decision making, taking into consideration personal values and styles. This will help you increase your confidence to look for further roles.  Consider joining IDN’s mentoring programme.

Networking externally and within your boards

  • Make yourself visible and able to be found. Ensure your LinkedIn bio is up to date.
  • Let people know that you want board roles (both your close contacts and more broadly).
  • Consider doing some public speaking at events or associations or industry specific events, writing a column in a publication or starting a business blog to position yourself as an expert worthy of being considered to sit on a board. IDN members may wish to volunteer to contribute to IDN’s regular blogs.
  • If you are not yet on a board, and still in an executive role, see if you can find opportunities to present in front of your current board to get familiar with the board rooms, dynamics, and structure.
  • Seek active endorsement and references from people who have seen you presenting and interacting in a boardroom.
  • Finally, if you are already on a board, don’t forget to focus on building strong personal relationships with your director peers and management.

IDN’s mentoring programme which is available exclusively for IDN members will be accepting applications in early 2021.  

 

INSEAD Directors Network, IDN – An INSEAD Global Club of International Board Directors.
Our Mission is to foster excellent Corporate Governance through networking, communication and self-improvement. IDN has 1500 members from 80 countries, all Alumni from different INSEAD graduations as MBA, EMBA, GEMBA, and IDP-C. We meet in live IDN webinars and meet-ups arranged by our IDN Ambassadors based in 25 countries. Our IDN website holds valuable corporate governance knowledge in our IDN blog, and we share insights also to our LinkedIn and Twitter  followers. We highlight our member through quarterly sharing of their new board appointments and once a year we give out IDN Awards to prominent board accomplishments. We provide a peer-to-per mentoring and board vacancy service and we come together two times per year at the INSEAD Directors Forum arranged by ICGC. We also engage with ICGC on joint research.
About INSEAD Corporate Governance Centre.
Established in 2010, the INSEAD Corporate Governance Centre (ICGC) has been actively engaged in making a distinctive contribution to the knowledge and practice of corporate governance. The ICGC harnesses faculty expertise across multiple disciplines to teach and research on the challenges of boards of directors in an international context and to foster a global dialogue on governance issues with the ultimate goal to develop boards for high-performance governance. Visit ICGC website: https://www.insead.edu/centres/corporate-governance

Webinar: Sustainability and Climate in Strategy and Board Agenda

By Karen Loon, IDN Board Member and Non-Executive Director

With climate challenges increasing, the board has a responsibility to assess the impact and define strategies to handle the risk.  Are we as board members doing enough?  Do we understand how to address the topic?  What are the challenges and opportunities here?

INSEAD Directors Network (“IDN”) members had the opportunity to listen to Lise Kingo, IDP-C, NED and former executive director at UN Compact and Novo Nordisk, Stig P Christensen, IDP-C and NED, and Silvio Dulinsky, Head of Business Engagement Latin America, World Economic Forum held on 18 November 2020 in an exclusive webinar for members which was facilitated by IDN Board Member, Liselotte Engstam based in Sweden with Q&A support from Hagen Schweinitz, a fellow IDN Board Member based in Germany.

Top left – Lise Kingo, Top right – Silvio Dulinsky.  Bottom – Stig P Christensen

In their introductory remarks, the panellists covered three areas:

Responsible business is now a board and senior management agenda however climate and social inequality remains far behind

The Sustainable Development Goals were issued out five years ago.  Whilst there is much broader recognition that responsible business is now a key board and senior management agenda topic, after five years, we are still very far behind in the whole climate area and also social inequality.

Due to the huge gap and climate emergency across the globe, the whole area of climate change has developed and is now one of the most mature areas in relation to how companies can control, manage and set good risk and targets.  In particular, the financial community has put climate risk as a key priority through how they are setting targets.  Another recent initiative is that investors want to know how companies put climate risk costs into their accounts.

Climate will continue to stay on the board and management agenda.  However, companies need to develop more holistic approaches to running their businesses when it comes to ensuring a successful transition to a net-zero economy. There are a number of tools and initiatives in place to support board members in this process, which means there’s no reason for boards not to stat working on a transition strategy.

We are beyond a tipping point in relation to climate.

  1. We are beyond a tipping point – We have no time to waste. Policy-makers and business leaders have to their best to rapidly implement new ways forward, as younger generations are demanding.  Investors are increasingly more supportive of these changes.
  2. Green and digital is core business – There is currently a risk for boards to get stuck on the compliance and risk agenda and not address opportunity agenda. It is often hard for boards to have strong and precise discussions and evaluation of the opportunity side.  Boards should push this agenda beyond climate.  The way forward requires innovation of the regulatory framework which is currently work-in-progress.
  3. Open the windows and doors – Look outside beyond the borders of your company and M&A objectives you are facing with a systems lens on. Create symbiosis between different companies and sectors.
  4. Listen to the crowds – They can’t be on the boards, but they have to be heard by the company.

Tools are available to support boards. A value chain approach should be adopted.

Tools are available to support boards in relation to setting up effective Climate Governance.  Specifically, there are eight climate principles outlined in the World Economic Forum White Paper “How to Set Up Effective Climate Governance on Corporate Boards – Guiding principles and questions”.  These are:

  • Principle 1 – Climate accountability on boards
  • Principle 2 – Command of the subject; boards need the knowledge to debate and stay informed re climate related decisions.
  • Principle 3 – Board structure; the board structure needs to be effective to embed climate in the decision-making processes of the board and senior management.
  • Principle 4 – Material risk and opportunity assessment; management should assess and manage short, medium and long term climate related risks and opportunities.
  • Principle 5 – Strategic integration; management should integrate climate considerations into their strategic and financial planning of the company
  • Principle 6 – Incentivisation
  • Principle 7 – Reporting and disclosure; reporting and disclosure should be undertaken with the same rigour as a financial report.
  • Principle 8 – Exchange; engage peers, regulators, investors and the whole value chain in the process.

All companies, including SMEs are crucial in relation to transforming value chains.  The role of the board is to support the broader value chain changes required.

A challenge is how can we bring on board others who are not yet convinced on the importance of the issue.  The Chair and CEO as well as a critical mass of directors play a critical role to put climate on the agenda of the board to support driving the change.

Top – Liselotte Engstam.  Bottom – Hagen Schweinitz

Following the opening remarks, the panellists and IDN members engaged in lively discussion in relation to topics including:

  • The importance of getting climate on the board agenda.
  • Being proactive on climate before rules becoming mandatory. Global requirements on climate are increasing rapidly.
  • Leadership agenda – Set goals which are not only financial, but also deal with other areas including climate, diversity etc. to drive the change agenda. The importance of the role of the board to drive this.
  • The increasing focus on climate being placed by investors in more recent times.
  • How do boards look at the risks and opportunities in relation to climate?
  • Sustainability reporting including accountability, accounting and valuation considerations.
  • Directors’ fiduciary duties in relation to climate.

As Liselotte Engstam concluded:

“There’s no question that we need to have increased focus from board directors, and it also needs to be more inclusive and holistic, and we are getting much more attention from investors… Don’t just look at this as negative it’s a fantastic time especially now to look at (it as) a source such as an opportunity to rethink and re-set”.

The next exclusive IDN webinar will be on Getting your First Board Mandate which will be held on 1 December 2020 at 1200 – 1300 CET.

 

IDN Webinar: Governance in a post-Covid World Lessons from Africa

By Adrian Moors, EMBA (2004), IDP-C, and IDN Mauritius/South Africa Ambassador

What are the learnings from Covid-19 and how are these being utilized in Africa to help enhance governance in a post-Covid world?

These were the questions discussed in an INSEAD Directors Network webinar, Governance in a post-COVID World – Lessons from Africa held on 4 November 2020.

The webinar was opened by Adrian Moors, EMBA (2004), IDP-C and IDN Mauritius/South Africa Ambassador, and moderated by Liselotte Engstam with support from Hagen Schweinitz, both IDN Board Members.

The panellists were:

The key highlights of the discussion were:

  • Africa is a complex and challenging environment.
  • There are negative perceptions of the continent.
  • However, there are also a number of opportunities.
  • Corporate governance is critical to realise these opportunities in a sustainable manner.
  • There are essential learnings and aspects of governance in Africa that could assist in this regard, particularly in a post-Covid world.

The key points discussed were:

Africa is a diverse continent

There is Anglophone, Francophone, Lusophone and Maghreb Africa. There are a number of programmes, and corporate governance codes being adopted across the continent. Many of these are linked to the King Code and OECD guidelines. Although the codes vary across the Anglophone, Francophone, Lusophone and Maghreb countries, the narrative around Corporate Governance is changing and complexity being removed.

Codes are also being developed and adopted across the Private Sector and State-Owned Enterprises with sustainability becoming a key element through the Global Reporting Initiative Standards.

Impact of Covid-19 on corporate governance

Covid-19 has highlighted the need for enhanced governance and sustainability for entities. This is also being supported by governments and the African Corporate Governance Network as composed of Institutes of Directors of about 30 African countries, including through virtual training and networking forums.

For example, following governance challenges within KPMG South Africa, the organisation restructured its board by including a number of non-executive directors and a non-executive Chairman.  In order for corporate governance to have meaning and become embedded in an organisation, it has to become part of the culture.  This needs to be underpinned in a real manner by the organisation’s purpose and values.

Governance in family businesses is often informal but underpinned by family values and thus embedded. In many instances it is better than that of listed companies.  Covid-19 has enhanced family businesses’ clarity of purpose and sense of responsibility towards the communities in which they operate.

Covid-19 has brought about significant changes to corporate governance practices and the manner in which boards operate in Africa, including:

  1. Regulators having to change and adapt their processes (e.g. allowing virtual Board Committee and Board meetings as well as Annual General Meetings)
  2. “Paternalistic” and “older” directors being forced to accept a more modern manner of operating.
  3. Staff welfare being prioritized while also having to develop accountability with remote working.
  4. The importance of CSR being elevated with companies that have traditionally neglected their social license to operate being penalized in the market.

It has also accelerated the implementation of initiatives such as linking objectives with performance (in the new remote environment), addressing CEO succession and managing risks, the information gap and fair process

The traditional limited transparency around board and organisational operations in Africa is no longer sustainable.

Understanding Africa

Board diversity in Africa is an important issue. It is not just about race, but also language and tribal.

Awareness of this and a local understanding is critical to successfully operate on the continent.

It needs to be addressed and can be done so through the right local structures and representation.

Having a “big bang” approach to improving governance as applicable to the Mo Ibrahim arrangement, is not practical and should be scaled up in a thematic approach to happen incrementally.

Along with the IDN members and ambassadors, other organisations that can assist in addressing this and finding local directors include the Institute of Directors and major accounting firms.

Conclusion

In conclusion, a learning from Africa is that it is essential to embed good corporate governance to protect business for the future and to grow in a responsible manner.

Confronting Governance Conundrums in an Era of Change

How have the role and focus areas of boards been evolving as the corporate landscape has changed? 

By Karen Loon, IDN Board Member and Non-Executive Director

On 16 October 2020, a diverse panel led by Helen Pitcher OBE, IDN President discussed “Confronting Governance Conundrums in an Era of Change” in a session held as part of the INSEAD Directors Forum.  Panellists included:

  • François Bouvard, Vice Chair of Institut Français des Administrateurs & NED
  • Karina Litvack, Non-Executive Board Director, ENI S.p.A., Executive Board Director, Chapter Zero, Member of Board of Governors, CFA Institute, Non-Executive Director, BSR
  • Elena Pisonero, Chairperson of Taldig and former President of Hispasat, former Spain’s Ambassador to the OECD; former Secretary of State of Trade, Tourism and SMEs in Spain

The panellists discussed a wide range of topics including:

  • What COVID has meant for boards
  • Digitisation and data
  • Changes in corporate governance in the future
  • How will the role of directors change in the future?

 What COVID has meant for boards

Over the past nine months, COVID has significantly changed our world.  Whilst some companies anticipated some of the changes, others were less prepared for them.  For many companies, it has created an acid test for workforces, management and boards who face big challenges ahead.  As management may not have enough time to focus on strategy and “reset”, there may need to be a big shift in the roles of management and boards.

The acceleration of change has also brought to the forefront companies which were less or more prepared due to their digital structures.  Those companies which identified the transition of change in society prior to COVID have been transitioning this fairly well compared to sectors which are struggling because they are still doing business in more traditional ways.  COVID has emphasised the need for boards and management to work more closely together to identify the future needs of stakeholders at large, not just shareholders.

The pandemic is an example of a systemic risk – something that none of us can solve because it needs to be solved at a systemic level, but all of us suffer the consequences of if it’s poorly managed, therefore, what are we going to do?  In considering the systemic impact of the pandemic, a broader question some companies have been considering is do boards understand systemic risk, do they talk about it, do they discuss it?  What can they do as companies to influence systemic preparedness, and is there a role for business in influencing the policy environment and the big social infrastructure investments that are made to protect both the society and business environment?

Some panellists feel that it is time for companies, led by their boards to introduce more ‘out of the box’ thinking and change the role of governance.  Boards and companies should not only be considering what they can control but think more broadly about all the things that are going on.

Digitisation and Data

Many companies have a misconception or misunderstanding of what digital is – it is what we can do with connectivity but doing things in a different way. Digital technology is the tool which allows companies to better reach their purpose.

Increasing the extent of use of digital should be viewed as a cultural change; it is not a matter of introducing new processes or new titles for the C-Suite.  It is how companies combine digital and physical means.  Companies need to have a mindset change and consider their whole value chain and how they can better manage and identify best opportunities to change their business models in order to thrive.  Companies cannot succeed at affecting this transformation unless they put people at the centre of it.

One suggestion was that in order to be better prepared for more digitalisation, companies should introduce ‘D’ in ESG because we should introduce as much data as we can to improve our decision-making processes.  Data is a crucial part of a digital mindset to improve decision making and identify and anticipate future risks.

Changes in corporate governance in the future

Boards are now looking at how they govern their companies more holistically, shifting discussion towards stakeholder governance rather than just shareholder capitalism.  Many companies are starting to address human issues (i.e. talent development) more effectively and are connecting the dots in terms of digital to human elements, recognising that at the end of the day that key stakeholders are customers and employees.  Digital has been providing companies ways to be more efficient.

Whilst sustainability is more on the mind of everyone, many companies are struggling with shorter term issues, so have pushed some longer-term questions aside for the moment.  This will continue if the pandemic drags on.  However, boards and management do need to revisit the way they work together on strategy in the longer term.  Whilst in the short term, companies may have lost focus on sustainability, in the longer term the view is there needs to be much more focus on this area as companies have a societal responsibility and everything they do should link back to the organisational purpose.

It is likely that the amount of time which boards spend focusing on more “out of the box” discussions in the longer term will expand, given that CEOs and management teams are required to spend much more time on shorter term issues.

How will the role of directors change in the future?

As the whole landscape changes, directors will also need to change.  This should start with the board of directors.  To be on top of all the issues, not only do they need to be open, read a lot and network well, they need to continue to improve their soft skills to be able to support their CEOs and teams in a supportive and yet challenging way.  Boards need to increasingly take a holistic view of their stakeholders, as well as how they support the development of talent, and how they use digital and data.  There is also likely to be much more interaction between boards and management, often digitally.

Distinction-cum-baggage: The board director’s track record

By Pamela Ravasio, IDP-C and IDN Board Member

A recent Bloomberg article found the following as they analysed the past and present professional affiliations of more than 600 directors and executives of the world’s 20 largest banks: Only few individuals had experience in renewable or sustainable industries. Far more had ties to polluting industries: At least 73 individuals even have at one time or another held a position with one or more of the biggest corporate emitters of greenhouse gases, including 16 connected to oil or refining companies.

More specifically: Of the four (4) banks where the boards directors offered some expertise in renewables or sustainability, every single one had significant links to ‘greener’ companies – notably in electric & utilities. The opposite held true for the remaining 16 of the 20 analysed boards.

In more succinct words: the study found that board expertise and prior affiliation of board directors correlated very well with the extent of investments into ‘emitting’ or ‘renewable’ energy companies.

Ironically, it is precisely the directors’ prior track record and experience, one of the very reasons why they got (s)elected onto the board, that could jeopardize their board’s forward decisions. Because – as the Bloomberg study showed – there are very, very few directors or even senior executives, with sufficient experience and track record in either renewables or sustainability. No matter their industry background.

…there are very, very few directors or even senior executives, with sufficient experience and track record in either renewables or sustainability. No matter their industry background.

To that point: there are even much fewer, if any, board directors in circulation that have a track record on how to marry the prosperity of a (their) company with business models that go above and beyond the traditional ‘growth model’, to just name one example. Hence, there is a tendency in relying on their past winning strategies to tackle the challenges in the wait for us to experience – globally as well as within individual businesses. This is like taking to the skies of the 21st century with technology from the era prior to the industrial revolution.

Track record bias: what is it, and why does it matter?

Track record bias is the unintentional bias directors introduce onto the board precisely through the very genuine, authentic and well-earned achievements of their prior career experiences.

Example: The former country manager of a large Aluminium firm with an excellent reputation for engagement with indigenous peoples and H&S joins the board of a major synthetic polymers company.

  • Pros: The new board director is very familiar with extractive industries, their environmental profile, the challenges around labour conditions and the global nature of such a low-margin business.
  • Cons: It may be tough for this new board director to consider viable alternative technologies based on renewable and/or recycled materials of origins, and the respective differences in client relationships, partnership models and global sales and logistics approaches.

Track record bias is something every director brings to the table once joining a board. In itself it is neither negative nor positive. In fact, consciously managed (key word: board thought diversity) it can add tremendous value by directing the board’s discussions into new, and so far unfamiliar terrain and in this way contribute to the resiliency efforts underway.

However, unsurprisingly the opposite it true if a board is not put together with clear priority given to thought diversity, as can be seen in the results of the Bloomberg research mentioned above.

And there is a somewhat simplistic reason for those results: Most board directors are or have been reasonably successful CEOs and CFOs, or else high-flying executives, of large(r) companies. Often in industries that are traditionally considered ‘adjacent’ to the company on whose board they are sitting.

Successful they may have been. But until very, very recently their role would not have required them to understand the implications of the Paris Climate Agreement, the SDGs, or the scientific consensus around climate adaptation for example. For most, such insights were allocated to the job descriptions of their sustainability speciality staff, or possibly the communications team, who in turn would have been required to pitch the traditional business case for any initiatives they saw necessary.

Board Diversity and Complementarity: The Origin of ESG[1] success and capability

In other words: not only do today’s board members by and large have very little practical experience when it comes to renewables, sustainability, or economic models that do not rely on pure and simple GDP growth. But they also have often built track records in industries that since decades are shown (and known) to be among the largest emitters, and thereby at the root of the current climatic challenges.

Therefore, unless such board directors are aware and accepting of the baggage they bring to a board table, and are willing to question the modus operandi of their industries of origin, their industry track record will only lead to more of the ‘old same’. And in this way merely perpetuate and replicate the issues found in precisely those emitting industries.

Once more: this is not to diminish such directors genuine track record acquired through hard work.

It is to point out that their track record on its own is incomplete. Their board is in needs of a complementary skill and knowledge set for proactive decision taking in the decades to come.

[1] ESG / Sustainability is one area where board diversity is of utmost relevance because the world we shortly will be living in will be unrecognisably different from the one we live in now. This is not to say that other subjects – digitalisation for example – do not require it. They do. The difference is fundamental however: ESG / Sustainability requires a fundamental different economic modus operandi made possible by new, so far unknown business models. Digitalisation in contrast will certainly result in new business models, but may not necessarily affect the fundaments of the economic system as such.

Four Winners of the Inaugural IDN Award for prestigious board positions

October 16, 2020

Four Winners of the Inaugural IDN Award 2020 for prestigious board positions

The INSEAD Directors Network (IDN) is an official Global Alumni Club, whose mission is to foster excellent corporate governance through networking, communication and self-improvement.

Our more than 1500 Alumni work on boards around the world, sharing knowledge and managing businesses across all industrial sectors. They also provide invaluable support for Not-for-Profit organisations.

We want to celebrate this success by recognising some of the most prestigious mandates that have been given to IDN Member.

The winners were selected from the 230 mandates, shared via the quarterly IDN Board Position Announcements*.

Selections were based on the size and and importance of the organisations they represented, their global relationships and the position at the board, in combination with pursuit of  INSEADs mission ‘Force for Good’. Four winners were selected, which all have an outstanding track record and have demonstrated the highest levels of integrity.

The winners are:

Not-for-Profit Category

 

Carole Ackermann

 IDP 8 2015

Chair

École hôtelière de Lausanne

 

Gbenga Oyebode

 IDP 6 2014

Trustee

Ford Foundation

 

For-Profit Category

 

Anita Hauser

 IDP 5 2014

Board Member

Roche Holdings AG

 

Denise Koopmans

 IDP 10 2015

Board Member

Swiss Post

 

A task force including four members of the IDN Board worked to define the selection critieria and examined the candidates. Selection criteria included: position shared via the IDN quarterly Board Position, candidate holding INSEAD Directors Program Certification IDP-C, excluding current IDN board members, the size and importance of organisation, pursuit of INSEADs mission ‘Force for Good’. Verifications were made by INSEADs Corporate Governance Centre and the winners were unanimously supported by the full IDN Board.

The awards was presented at INSEAD Directors Network 2020 Annual General Management Meeting.

 We congratulate the winners. They reflect well on IDP, INSEAD and IDN and we can be proud of their achievements.

 

On behalf of the IDN Board,

The Award Task Force Members,
Jeff Scott, Hagen Schweinitz, Thomas Seale and Helen Wiseman.

*Ref. Latest of the quarterly IDN Board Position Announcements Sep 7, 2020.

Holding the moral compass – Boards social responsibility

By Florence Kaminska, IDP-C and Non-Executive Director

The COVID19 crisis led to the abrupt halt of an economic model, increasingly challenged in the past decade with climate and social warnings. Faced with such unprecedented situation, in varying degrees, consensus around the world was to choose health over economy, humanity over profit. The speed of reaction and solidarity – displayed by individual actions, state intervention to protect employment, companies adapting their production to produce masks, gel, ventilators … gave us a glimpse of what ‘the world of tomorrow’ could look like, demonstrating the impact of citizenship and value driven decisions.

It also raised expectations on the way companies create value in future and address the social impact of the decisions they make.

The pandemic broke out in a period of great existing instability and unrest resonating across the world through social media. Citizenship pressure is likely to increase and have a louder voice, as the economic consequences of COVID19 crisis massively impact employment. It will present great risk for society and business, but equally a great opportunity for companies that are delivering value for both shareholders and stakeholders (1). In this context, the Board’s role in keeping a moral compass whilst ethically charged, short and long-term, decisions are made and their consequences managed, is key.

What value does the Company create and for whom?

Beyond their responsibility to the long-term sustainability of the company, the current context is a compelling call for boards to drive, as part of their duty of care, the value the company is creating to society at large. Such commitment will increasingly determine the company’s ability to access market capital, attracting and retaining talents and ultimately impacting brand reputation and Investors Relations. Private investors increasingly want to see their savings and investments to produce as much good as dividend and are becoming more demanding. Equally, many people not just millennials, want to work for an organisation whose philosophies and actions resonate with them intellectually and emotionally. As the debate on shareholder Vs. stakeholder primacy is gaining momentum, the ‘S’ in ESG is gaining a new prominence in the Boardroom, accelerated by the COVID19 humanitarian and economic impact on businesses, communities and people’s lives. The way boards chose to approach cash and liquidity will have both social and governance implications and, as such imposing social responsibility at the highest strategic level. (2)

Are we moving towards new dimensions of leadership?

Much publicised heads of state, New Zealand, Germany,  as well as CEOs from Danone, Unilever, AirBnb, to name a few, have demonstrated, beyond they undoubted ‘technical’ talent and experience, a form of moral authority and leadership attributes already emerging as differentiators such as accountability, humility, transparency, proximity as well as empathy and compassion. These new leadership attributes will equally impact the board profiles and composition, as such public examples raised the level of awareness on ‘purpose leadership’. (3)

How does it impact the Board?

The social impact of decisions made by companies, imposing a form of moral compass to navigate these complex times, is likely to determine the levels of trust from stakeholders, and ultimately impact the bottom line and the shareholders.  Holding the moral compass is not about holding management accountable for vague, all being righteous principles. It is about maintaining a dialogue with shareholders whilst collaborating with executives to manage the complexity and conflicting needs of the multiple stakeholders, assessing risks, opportunities and trade-offs, setting priorities and measuring purpose-based decisions.

Holding the moral compass is not about holding management accountable for vague, all being righteous principles. It is about maintaining a dialogue with shareholders whilst collaborating with executives to manage the complexity and conflicting needs of the multiple stakeholders, assessing risks, opportunities and trade-offs, setting priorities and measuring purpose-based decisions.

To do so, some fundamentals will require attention, such as:

  • Defining or revisiting the corporate social purpose – 2008 Financial crisis led to new governance framework and enhanced regulations but did not address social unbalances. COVID19 crisis is accelerating societal impact in governance through by-laws and legislations. Proactively embracing the trend and using existing best in class examples will determine the sustainability of a business starting with access to capital and talents (4). The ability to measure the authenticity and results of their actions will impact the reaction of both stakeholders and shareholders, as will the Board ability to drive an ESG culture.
  • Aligning scorecards and KPIs – Driving an ESG culture implies revisiting governance, scorecards and KPIs. Finance may have neglected qualitative and quantitative assessment of management in the past. As the concept of the Triple bottom line expands (5), there is likely to be more effort from the investors side in understanding how to manage companies well in future and pushing their goals under the OECD agenda or reference the UN’s SDG agenda (6). Remuneration committees will consequently need to reflect these new imperatives in the Executives compensation & incentives, including those of the Board.
  • Enriching the composition of the Board – The Chair brief is expanding as his/her effectiveness will be determined by the ability to interpret complex ESG landscape and implications of shifting social, political and regulatory expectations and their associated risks. The pandemic situation has also revealed new skillsets required among the non-executive board members, such as technology, HR, alternative financing, restructuring, and critical leadership attributes such as collaboration, agility, humility and courage. Leading by example will become an integral part of the role of the Board, promoting agility to adapt fast to new challenges whilst never conceding on the violation of core ethical principles related to the corporate social purpose. The Nomination Committees are likely to revisit the needs, profiles as well as the selection criteria, methods and breadth of candidate pipeline.

An opportunity to shape the ‘world of tomorrow’

Company boards will play a key role in creating the ‘world of tomorrow’ as they guide and hold management accountable to rethinking the company social purpose, embedding it in their decision making as they navigate the complex post COVID19 economic landscape.

The writer George Sanders used the following analogy for the current COVID19 moment, ‘we’ve slipped on ice but haven’t hit the pavement yet. We are caught in a suspended state between losing control and feeling the full impact’.

Companies will be faced with tough dilemma. Cost savings and profit motives, which may have served them well in the past are likely to backfire (7).  Without a moral compass in making tough decisions and building a more sustainable model, in the way wealth is created and redistributed, the prophecy of the French writer, Michel Houellebecq , ‘the world after will be the same…in worse’ may well materialise. Yet, ESG has raised in awareness and reaching an inflection point. The priorities Boards drive, the courage to do ‘the right thing’, the moral authority they hold and their leadership in shaping sustainable and equitable long-term corporate strategies will define the, much hoped for, ‘World of tomorrow’.

References
(1) https://corporatefinanceinstitute.com/resources/knowledge/finance/stakeholder/
(2) Fidelio partners. Cash is King! ESG? May, 10 2020
(3) https://hbr.org/2020/03/a-time-to-lead-with-purpose-and-humanity
(4) Examples such as B Corp certified companies, https://bcorporation.eu/ 

(5) https://www.business.com/articles/triple-bottom-line-defined/
(6) http://www.oecd.org/dac/sustainable-development-goals.htm  https://www.un.org/sustainabledevelopment/sustainable-development-goals/
(7) When Crisis strikes lead with Humanity. Harvard Business Review April 23 2020, Doug Sundheim