Modern governance is the next frontier of digital transformation

Gov­er­nance is not an area of busi­ness that has been his­tor­i­cal­ly asso­ci­at­ed with dig­i­tal trans­for­ma­tion. Formed pre­dom­i­nant­ly of two very tra­di­tion­al func­tions, boards of direc­tors and legal depart­ments, it cer­tain­ly has not been what com­pa­nies first turn to when they embark on dig­i­tal­i­sa­tion pro­grammes.

Coro­n­avirus has been a dri­ving force for change, how­ev­er. As a major accel­er­a­tor of dig­i­tal trans­for­ma­tion across organ­i­sa­tions, the pan­dem­ic has forced board direc­tors and legal pro­fes­sion­als to work remote­ly, rely­ing entire­ly on dig­i­tal tools to car­ry out their duties.

Mean­while, an ampli­fied envi­ron­men­tal, social and cor­po­rate gov­er­nance (ESG) agen­da, flared up by an upris­ing of social injus­tice issues, has dis­rupt­ed board­rooms fur­ther, in some instances shin­ing a light on a lack of diver­si­ty. And with every­body work­ing from home, an evolv­ing dig­i­tal threat land­scape has ele­vat­ed anoth­er poten­tial­ly crit­i­cal issue of cyber­at­tacks. All this has increased the pace of board activ­i­ty as well as the need for the right tech­nol­o­gy to man­age it.

“Through 2020 and into 2021, there has been a mas­sive increase in work­load for board mem­bers,” says Bri­an Stafford, Chief Exec­u­tive Offi­cer at Dili­gent, a lead­ing mod­ern gov­er­nance soft­ware provider. “Any­time there is a cri­sis, the pace of activ­i­ty accel­er­ates dra­mat­i­cal­ly and, if you com­bine that with the increas­ing­ly impor­tant back­drop of diver­si­ty, the need for more cyber­se­cu­ri­ty tools and the major shift toward stake­hold­er cap­i­tal­ism, boards have had a huge amount to over­see.”

Inter­ac­tions between the board and man­age­ment, and some­times share­hold­ers and reg­u­la­tors, may be the most vis­i­ble part of gov­er­nance, but they only account for about 10 per cent of what board mem­bers do. The oth­er 90 per cent lives below the sur­face. While crit­i­cal to com­pa­ny per­for­mance, such activ­i­ties are rarely observed or addressed, which can result in gov­er­nance gaps that form an incom­plete pic­ture of the busi­ness.

Fill­ing these gaps should be a busi­ness pri­or­i­ty. Hav­ing a more holis­tic view of an organ­i­sa­tion and acknowl­edg­ing the impact a com­pa­ny has on its share­hold­ers, cus­tomers, sup­pli­ers, employ­ees and com­mu­ni­ties – or stake­hold­er cap­i­tal­ism – ulti­mate­ly leads to high­er-per­form­ing busi­ness­es.

This calls for a more mod­ern approach to gov­er­nance to reflect the cir­cum­stances of busi­ness­es today. Mod­ern gov­er­nance is the evo­lu­tion of lead­er­ship, board and oper­a­tional prac­tices to dri­ve sus­tain­able per­for­mance, investor con­fi­dence, stake­hold­er engage­ment and last­ing impact, all pow­ered by the right tech­nol­o­gy and insights. It is the key to the next fron­tier of dig­i­tal trans­for­ma­tion and to unlock it organ­i­sa­tions need to dig­i­talise their gov­er­nance prac­tice with a plat­form that com­bines tech­nol­o­gy, insights and process­es.

“Tra­di­tion­al gov­er­nance was some­thing that hap­pened four times a year in smoke-filled mahogany con­fer­ence rooms, large­ly with a non-diverse group of indi­vid­u­als. That can no longer be the norm,” says Stafford. “Mod­ern gov­er­nance pro­vides more trans­paren­cy, diver­si­ty and fre­quen­cy of insight, com­mu­ni­ca­tion and con­nec­tiv­i­ty, pro­vid­ing boards and lead­er­ship teams with more infor­ma­tion to make the right deci­sions.

“As a result, man­age­ment gets a more diverse set of per­spec­tives for long-term suc­cess, includ­ing see­ing crises fur­ther in advance. Mod­ern gov­er­nance takes infor­ma­tion wher­ev­er it exists, whether that is inside or out­side a com­pa­ny, and ensures the board of direc­tors and lead­er­ship can ask the right ques­tions and make the right deci­sions at the right time.”

As a pio­neer of mod­ern gov­er­nance, Dili­gent pow­ers its solu­tions through a plat­form that brings togeth­er dis­parate tools, data, inte­gra­tions and process­es into one place so board lead­ers can effec­tive­ly gov­ern at today’s fast pace of busi­ness. The plat­form is com­prised of three solu­tions: board and lead­er­ship col­lab­o­ra­tion, oper­a­tional gov­er­nance, and advanced gov­er­nance ana­lyt­ics.

Through any device, board and C‑suite mem­bers can access the Mod­ern Gov­er­nance Plat­form to con­nect to rel­e­vant infor­ma­tion and insights that help them ful­fil their role. This could be pre­sen­ta­tions and doc­u­ments, or data and intel­li­gence about com­peti­tors and the wider indus­try, all curat­ed by Diligent’s team and trust­ed third par­ties.

As the largest glob­al net­work of cor­po­rate direc­tors and exec­u­tives, Dili­gent is relied on by more than 19,000 organ­i­sa­tions and 700,000 lead­ers in over 90 coun­tries. Its plat­form empow­ers lead­ers to turn gov­er­nance into a com­pet­i­tive advan­tage, there­by enabling them to thrive in a com­plex busi­ness land­scape. It also enables dig­i­tal trans­for­ma­tion to start at the very top of organ­i­sa­tions, which is where such pro­grammes are most like­ly to suc­ceed, and then cas­cade down through­out the rest of the busi­ness.

“What we find with the most suc­cess­ful com­pa­nies is dig­i­tal trans­for­ma­tion starts at the top and what bet­ter proof point to show than your C‑suite lead­ing the charge and embrac­ing the lat­est tech­nol­o­gy and soft­ware,” says Stafford. “Start­ing with a few wins and show­ing how you drove dig­i­tal trans­for­ma­tion among the most senior direc­tors is huge­ly valu­able for the rest of the com­pa­ny. Hav­ing that come from exec­u­tive role mod­els is empow­er­ing.

“Gov­er­nance respon­si­bil­i­ties and process­es will con­tin­ue to accel­er­ate in the years ahead, along with fur­ther pres­sure from reg­u­la­tors and activist investors and the rapid­ly evolv­ing ESG land­scape.

“To effec­tive­ly man­age the chang­ing dynam­ics in an organ­i­sa­tion, lead­ers need more infor­ma­tion at a more fre­quent cadence. The role of the board mem­ber is not some­thing that just hap­pens four times a year. It is an ongo­ing month­ly, if not week­ly, role because peo­ple have to be more pre­pared and up to date on com­pa­ny and wider indus­try insights to be good stew­ards of the organ­i­sa­tions whose boards they sit on.”

For more infor­ma­tion please vis­it diligent.com