Success Factors of Directors in New Normal Era

Directors nowadays are facing a number of complex challenges from rapid technological change to mounting expectations from regulators and shareholders.  As COVID-19 crisis paves way for the unpredictable New Normal, organizations have turned to emphasize on continuous improvement and innovation to respond to demand change and achieve future success.  

RSR Partners, an advisory company on governance for Board and CEO, has recently conducted a Roundtable for directors to share what they have learnt during the crisis and how they drove change toward the “New Normal”.  Most directors agreed that global disruption and ongoing uncertainties requires greater Board engagement.  Therefore, Board’s skills and experiences are crucial in determining direction with confidence and Board leadership will enhance effectiveness.

Characteristics of successful directors in “new normal”

RSR Partners conducted a survey from over 250 directors at public companies ranked in Fortune 50-1000.  The survey result showed that five top characteristics directors should possess in the new normal include

1.  Stewardship

The result indicated that Stewardship is the most desirable characteristic of the Board in the new normal.  The Board needs to provide more guidance and support to build trust in business viability.  This involves engagement with all stakeholders including investors, customers, and suppliers.  The Board should also ensure that employees have job security as this is vital in establishment of a solid organization culture.  Moreover, social contributions will also yield positive impact both on the society and the organization’s performances.  The Board may take the lead in creating favorable environment by listening to voices of employees and customers while demonstrating concerns with social issues to build trust and robust governance.

2. Ability to Pivot

As normal business operations may be suddenly disrupted, the Board should ensure the organization has  “Ability to Pivot” for the benefits of both the organization and stakeholders.  For example, banks may seek to retain customers by granting waiver on fee of late payment, allow staffs to work from home, upgrade technology to facilitate videoconference through applications like Zoom, Microsoft Teams, Google Meet etc.  These changes reflected the drives for innovation and at the same time demonstrated the ability to change the thinking and behaviors to solve problems and adapt.

3. Learning Agility

Remote working efficiency should be quickly developed as it will accommodate employees in many positions to perform better and create more effective work process.  Such development will also improve work/life balance and enhance the organization’s ability to attract and retain talents.   Moreover, the development should also emphasize on sustainability aspects such as reduction of energy consumption, utilization of strategic investment, open working space etc.  With such rapid changes and consequences, the Board should embrace new technology and innovation, enthusiastically engage, have clear vision to predict changes in market and business trends, able to identify relevant risks,  supervise to achieve goals, and continuously develop their competencies.  These will edge up the organization’s competitive advantage and opportunities.

4. Champions of Change

Uncertainties make investors and stakeholders nervous.   The Board must be able to predict and respond to changing economic and market conditions.  The Board must be able to guide the organization or even take action to ensure the management is capable and ready to support staffs to think outside the box  and adapt.  But has the Board today opened to such changes? Has the Board promoted change and encouraged creative thinking of the management? Has staffs been able to create a balance between work, family, risk, financial, and health? It is the Board’s roles to ensure the organization has clear, appropriate and adjustable policies, processes, and communications.

5. Reimagination

Many companies prospered during the crisis and registered continuous growth, demonstrating Reimagination ability.   Platform, data analytic, customer service, and loyalty building are becoming more significance while the launch of new product may require experts with new skills.   Can the Board see the picture and the evolution of the organization? The speed of change, ability to maintain confidence, and determination of future strategies are all vital elements during the transition period.  Has the Board helped the organization identify risk and opportunities, evaluate options, and take parts in solving issues and preserving utmost benefit of stakeholders? If the Board recognize the significance and act swiftly, the organization has a fair chance to be winner and survive. 

We are at the time of diverse opportunities and alternatives.  Any organization that initiates change would have influence in determining business direction.  Any organization that adapts to the change would be able to adjust organization culture and work pattern in alignment with stakeholders’ interest.  This is indeed a crucial time for the Board to play the role of a true corporate leader.

Benyada Kumlungsua
Senior CG Specialist – Curriculum and Facilitators
Thai Institute of Directors (IOD)