Developing digital capability is not as simple as appointing a digital expert to the board.
The Institute of Directors (IoD) has updated its cornerstone publication to help directors thrive in today’s disruptive and challenging environment.
The IoD’s Four Pillars of Governance Best Practice is a comprehensive guide for people serving in governance roles, and the new edition, which include a digital format, includes updates on technology and information governance.
The latest edition, which is also being released for the first time in a digital format, picks up on global trends relating to stakeholder engagement, board diversity and technology and information governance, says IoD Governance Leadership Centre manager Felicity Caird.
“The landscape in which organisations are operating are demanding and constantly changing,” says Caird.
“Globalisation, geopolitics, rapid advancements in technology, disruption to business models, climate change and shifting demographics are contributing factors which today’s directors need to have on their agenda.”
“Using this guide will help directors lead governance, face the challenges and grasp the opportunities of tomorrow,” says Caird, who explains the guide was last refreshed in 2012.
“This means going beyond a compliance approach, instead aspiring to meet the highest standards of the profession.”
Institute of Directors CEO Kirsten Patterson and IoD manager Governance Leadership Centre Felicity Caird talk about the new challenges boards face today.
Globalisation, geopolitics, rapid advancements in technology, disruption to business models, climate change and shifting demographics are contributing factors which today’s directors need to have on their agenda
Institute of Directors CEO Kirsten Patterson says the digital edition ensures IoD members have access to the latest governance best practice guidance and resources “at their fingertips – whenever they need it.”
“One of the challenges in leading in this current environment and a challenge to organisations is the constant updating in real time information,” adds Patterson.
“That creates interesting governance challenges in terms of how do you prepare or lead an organisation that is so iterative?
“Iterative real-time information is our new way of working now,” she states.
Caird says with the digital edition, she cites a director can look up technology and governance, and there will be references to IoD’s Cyber-Risk Practice Guide.
Caird says when there is a new code or legislation, the IoD can load this information straightaway.
The latest guide points out boards should consider whether they have the right mix of knowledge, skills and experience to provide leadership and governance in a digital era.
The guide recommends regularly reviewing the composition of the board to ensure effectiveness and ongoing success.
“In today’s board, the diversity of skills, experience and thinking around the board table needs to include technology know-how so that there can be robust discussion and challenge to enable the board to add value,” it states.
“Developing digital capability is not as simple as appointing a digital expert to the board. It is about developing the digital capability of the board so it can navigate challenges and future success in a digital world. It may be relevant to consider whether digital capability or social media/online marketing skills are part of the board’s overall up-skilling and composition.
Options organisations can take will be to appoint a digitally savvy director to supplement existing board expertise or establishing an advisory committee with external experts to advise the board.
The board can also invite digitally-orientated executives to board meetings to discuss strategic opportunities and risks – from both an organisational and an environmental scanning perspective.
The IoD’s cornerstone publication has been updated to reflect the challenges in the digital era.