VISIONARY BOARDS: GOVERNING COMPANIES THROUGH GLOBAL DISRUPTION
With 41 percent of global CEOs expecting their companies to be transformed into a significantly different entity in the next three years, according to KPMG’s ‘2016 Global CEO Outlook’, corporate boards face the challenge of preparing themselves for risks they may not even be aware of. Economic and geopolitical uncertainty, transformational technology, changing demographics, business model disruption and new competitors: each change poses new opportunities, but also new threats to the very sustainability of a company.
In times of drastic change, there may be a corporate tendency to play it safe. Plans to move into new markets may be tabled until political situations quiet down, or investment in new technology held off to avoid committing to systems that may be outdated in a couple of years. And, to withstand severe market and revenue fluctuation, company boards must keep an even closer eye on financial risk management to keep the lights on. The oversight function of a board may indeed need to go into overdrive.
But rather than retreating to safety, these periods of uncertainty are the exact times when boards need to stretch the most – to think far beyond the present and reimagine what a company can be five, 10, 20 years hence. How can boards deliver beyond their oversight role, and provide the kind of governance a company needs to move toward a very different future?
Oct-Dec 2016 Issue