The Centre for Creative Leadership (CCL) has conducted a research study on Board Leadership for the Asian boards and offers an insight to the board members to improve their performance and reminds them that they need to play a more strategic role in the next decade by fostering a collective sense of teamwork and shared mission for the board as a whole. As the study has been concentrated on Asian Boards, wherever possible, reference to India has been given at appropriate places.
The key findings of the study across its six parts are as follows:
In wake of rapid changes in equity, currency, inflation, interest rates, etc. the Asian boards have serious concerns about risk management which is emerging as a key governance challenge and requires a larger role to be played by the board and not by the management only. The key risks observed are market risks, operating risks, global competition, economic uncertainty and cyber security.
It has been observed that Asian Boards lack diversity and are less accountable as compared to their western counterparts. On Indian boards, 55% of the respondents shared that the boards conduct 5-8 meetings in a year having 5-8 directors on board.
The composition of Indian board has dominance of chartered accountants, lawyers, ex-CEOs, and in some cases government officials with traditional skills on business management, industry and financial expertise and seriously lack skills on technology, innovation, understanding of sustainability and international business. The dominance of men has also been found as compared to Vietnam and Malaysia, having higher percentage of women directors.
II. BOARD LEADERSHIP CHALLENGES IN ASIA
The following factors have emerged as unique in terms of challenges for the Indian corporate governance eco system :
The Survey also disclosed an interesting fact that in almost 50 percent of the organizations, relationship between management and board can be termed as “sparring partners”. A “sparring partner” board is a group of directors who have a very open and honest relationship with the management in general and CEO in particular.
III. BOARD LEADERSHIP SUCCESS MODEL
The interviewees emphasized upon the need for shift in the mindset of independent directors based on following commandments of success in effective discharge of their duties:
The study has also placed forward some key behaviors of a good director.
IV. FUTURE READINESS OF BOARDS IN ASIA
The study inferred, based on the responses, the importance of developing understanding of technology and digitalization for the advancement of the company.
In an inquiry to capture the reflections of the boards about the future boards and the likely issues and trends, the following key opinions have been captured by the research:
Moreover, on the immediate actions required to make the boards future ready, respondents expressed the importance of the following six tactics:
V. BOARD LEADER SUCCESS – KEY PRACTICES
For the leader of the future boards to succeed, the following key practices have been placed forward by the directors as respondents to the study:
VI. ACTIONABLE ADVICE
The interviewee board members highlighted the following action steps as Do’s and Don’ts for the first time directors:
The report captures a number of areas for the learning of new as well as experienced Independent Directors in terms of variables which contribute to the success of the board. It is advisable to refer to the detailed report for complete understanding as well as a comparative analysis of boards across the region.
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