Programmes and Profits
Confronted with disruptions to business conditions, some companies freeze; caught like the proverbial deer in headlights, with plenty to keep bosses awake at night. Next year may be challenging for businesses and their senior executives, with companies already stepping up governance on cyber security, while CEO pay ratio, ESG, disruption and digital transformations are other tricky areas where reputations and returns are at risk. With increased shareholder engagement and more extensive press coverage, 2019 looks to be a testing year for corporate boards.
Notorious board disasters, an explosion in activist investing, the disruptive forces of technology and the proposed introduction of increased reporting requirements and corporate governance code changes in 2019, are a few reasons why effective board governance is becoming even more important. Industries and institutions are changing faster than ever before, so smart, senior managers and directors are returning to the executive education classroom to stay on top of their game.
Up to twenty years too late for many businesses, cybersecurity is finally seen as a key business risk, and boards call for more transparency and understanding in this area, placing cybersecurity high up the agenda. With the number of threats increasing, corporations have to up the ante and become adept in dealing with cyber-attacks. More and more boards are debating the extent to which their directors should have cyber expertise as there will undoubtedly be an upward trend in the security challenges raised by the IoT in the coming years.
“Big, established companies tend to struggle with disruptive change”
Despite the push for greater pay transparency and the upcoming introduction of pay ratio reporting, the median remuneration among FTSE 100 CEOs was £3.93 million in 2017 compared with £3.53 million in 2016. From 2020, Britain’s biggest companies will be legally required to publish the gap between the salary of their CEO and what they pay their average UK worker, holding big businesses to account for the salaries they pay. The unknown impact of Brexit is also looming over many UK based companies, and boards must be well-equipped due to the high level of uncertainty around it and the expectation that there will be a marked slowdown.
Understanding a company’s environmental, social and governance (ESG) impact has become an increasingly important feature to assess its performance and long-term sustainability, and there has been a relatively recent change in attitudes around integrating corporate responsibility into company strategies, policies and stakeholder engagement processes. While this generates a positive social impact and business value, with all these factors at play, strong leadership is essential to stay focused, stay resilient and stay profitable.
Confronted with disruptions to business conditions, some companies freeze; caught like the proverbial deer in headlights, with plenty to keep bosses awake at night. And while there is no ‘right’ method in leadership, with different approaches and techniques working for different companies and circumstances, the best leaders know when to develop their skills and fine-tune their direction. Likewise, there is no ‘perfect’ way for boards to operate – instead, each board must develop practices that suit the unique needs of the company and management.
“There are many executive education courses and programmes that will equip you with the strength needed to face these boardroom challenges”
Big, established companies tend to struggle with disruptive change, and this organisational inertia, where companies stay on the same trajectory no matter what the outcome, has cost jobs, profits and entire corporations. Albert Einstein reportedly once said, ‘Insanity is doing the same thing over and over and expecting a different result.’ For corporate survival in 2019, its time to deal with disruptions, not dismiss them.
There are many executive education courses and programmes that will equip you with the strength needed to face these boardroom challenges, and Henley Business School offers numerous leadership programmes including the Henley MA Board Practice and Directorship, an 18 month programme aiming to enhance your value as a board director that will help drive business impact, and, alongside the necessary technical knowledge, will engage you with the leadership capabilities needed for your board to create value, or the Board Directors’ Programme, a 2-day programme, that looks at what it means to be an effective board member. Alternatively, the MBA of ISEG – Lisbon School of Economics and Management is a prime choice, including subjects especially designed for the development of leadership, communication, and team management skills, ideal for those interested in actively building a better future.
Shareholders have a role to play in inspiring change in matters such as executive pay, but the real accountability for revolution is found within the boardroom. Directors have always played vital leadership roles, but modern challenges like sustainability, globalisation and evolving business models in response to digital technologies, are all changing the face of leadership. In an effort to meet today’s corporate board challenges, where oftentimes like-minded people are unlikely to defy each other’s beliefs, we demand a boardroom shake up.
Organisational learning and wisdom stops when the corporate culture stifles inquisitiveness and innovation or, even worse, if strategy actively discourages it. Executive education allows you to breathe new life into your profession and your position, so step up, sign up and be the leader your company needs.