The role of modern corporate boards is the juxtaposition of grounding and stargazing.
Grounding is about making sure that the company fulfills all of its legal requirements, manages its risks properly, and does business in a responsible way. It is about all of the vital things we associate with board oversight tasks in corporate governance, compliance and corporate risk.
But with that comes an equally and perhaps even more important role: grounding needs to be complemented by stargazing. This is where a board demonstrates its mettle in making sure that their organization is ready and able to expand its horizons, to strive to achieve more and stretch itself to become the robust and resilient business that is capable of responding effectively to the unknowns in its future. Stargazing should be a big component of the strategic work that a board does.
Both grounding and stargazing require asking questions, looking beyond the obvious and the comfortable, and actively engaging with the organization.
The emphasis these days seems to be on the tick-boxing of risk management. In speaking with fellow board members from around the world and across a wide variety of sectors, I've found that concern for risk exposure coupled with a desire not to appear too meddlesome and the time commitments required to do the job properly means that they sometimes leave too little time room for discussions of strategy.
This is a real loss for organizations of all sizes, as part of the purpose of having independent directors with a broad range of skills is to draw on the knowledge and understanding around the table and the broader perspective they bring to help propel the organization to new heights.
Grounding is a big part of the vital role of directors -0 ensuring that companies are managing their risk, fulfilling their requirements, "playing by the rules", and being good corporate citizens. But even when fulfilling that role, strategy needs to play a part. In every audit committee and compensation committee, there must be room for considering what the company can do to push itself that much further to achieve more, and better, things for all its stakeholders.
Most importantly, getting the balance right between the two functions of grounding and stargazing helps to ensure that the company is doing what it needs to future proof itself, and it requires board members who can think outside the box and who also know when to get back in the box.
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