Geopolitical and economic challenges and expanding stakeholder expectations have made boards of directors’ work more complex than ever before. Beyond ensuring effective organizational performance, boards are expected to work effectively as long-term stewards. Organizations trust board members to be responsive to critical stakeholders and constituents.
Specifically, boards today are expected to deliver:
- Organization performance: Overseeing long-term value creation delivered by management and key talent
- Sustainability and future proofing: Guiding the organization to be poised for ongoing sustainable growth and financial success
- Governance and risk mitigation: Ensuring regulatory and legal compliance, risk mitigation and oversight.
This model serves as a comprehensive framework guiding responsible decision-making and value creation in corporate stewardship. There are five key dimensions: Performance, Protection, People, Purpose and Planet.
As a result, organization stewardship has evolved into an overarching principle that incorporates five key elements that are essential for long-term organizational resilience, visibility and growth (Figure 1). WTW works with boards and their organizations’ leaders to evaluate and enhance the board’s effectiveness as they relate to these five key interdependent dimensions.
To ensure your board is continually able to navigate today’s challenging environment, begin by evaluating and enhancing board effectiveness. This also will help your organization deliver on its stewardship and sustainability goals – which are imperative for good corporate and global citizenship.
Ensure your board is prepared to rise to modern challenges
When you examine your board’s effectiveness, it is important to look at:
- How your corporate strategy and direction are set to ensure that your board is setting sustainable strategy, structure and policies
- Board governance and oversight and how it balances commercial strategy while acting responsibly
- Board composition to ensure collective diversity that enables robust decision-making processes
- Boardroom conduct and dynamics to ensure that your board champions culture and dynamics that create an open environment for discussion
- Board management and operation to ensure that board setup, process and structure facilitate effective collaboration and discussion, and the entirety of the board’s remit is being addressed
All organizations, including for-profit companies and not-for-profit entities, can benefit from examining board effectiveness. The fundamental role of boards is consistent across purposes, industries, ownership structures and sizes. Issues that are relevant to all boards – regardless of organization size – can be assessed, including:
- Board diversity
- Skills mix
- Technical capabilities
- Succession management
- Industry experience
- Committee experience
- Leadership skills
Softer skills also can be assessed, including approaches to decision making, stewardship experiences, inclusive chairperson behaviors, leadership and conflict management.
How we partner with organizations
We work with organizations of all sizes and structures to advise boards more broadly on people, risk and governance issues, including compensation issues and other board challenges and opportunities, including:
- Board effectiveness assessments
- Board training
- People governance clarification
- CEO performance evaluation facilitation
Together with our clients, we define what is expected from the board as well as the required level of engagement to ensure the board delivers on promises and organizational expectations.
To unlock value and deliver exceptional outcomes, you need a partner who sees the full picture. Together, let’s turn today’s challenges into tomorrow’s opportunities.
