THE increasingly challenging and volatile business environment will lead to a heavier workload for corporate board members. This should result in an in-depth strategy discussion at least once a year, and a review of board diversity to identify skill gaps, said business leadership and corporate governance expert Jean-Francois Manzoni.
Professor Manzoni is the Shell Chaired Professor of Human Resources and Organisational Development, and a Professor of Management Practice at Insead. He told The Straits Times: 'The world is much more volatile. Competitive advantages that you would be able to maintain for two to four years are now maintainable for only months.'
Thus, being a board member will require an increasingly intense involvement, as the board needs to be knowledgeable enough to understand and challenge management's reasoning, Prof Manzoni explained.
He added: 'That means a lot more work for board members to keep up with industry dynamics and adjacent industries... The board is going to have to need more frequent discussions.'
One key discussion is in the area of strategy.
Prof Manzoni said: 'The board should have a serious look at strategy at least once a year... it's the board's role not only to make sure the strategy is defined, but also that it's implemented. There's an aspect of follow through.'
The frequency of such discussions, which may entail two to three days of in-depth talks, are more crucial for fast-moving sectors such as technology, telecoms and consumer electronics.
The trend of having professional directors sitting on a few boards without holding a day job is emerging in places such as Europe, as the requirements of being a board member have increased significantly.
He noted: 'It's a lot more time, energy and focus than it used to be. Ten to 15 years ago, they would meet, have serious discussions, then go and have a good lunch. Historically, we had people who were members of five to seven boards in addition to having a full-time job. But it's no longer possible.'
In 2009, the disclosure that DBS Group Holdings independent director Christopher Cheng Wai Chee was a director of 152 companies left some investors uneasy.
Later, it was revealed that he sat on only six listed-company boards, and that the bulk of his directorships were shell companies.
Prof Manzoni also stressed the importance of having more diverse expertise in boards.
It's not just about the networks, but also having specialists on the board with a certain skill crucial to the business or who are able to connect more directly with specific stakeholders, he explained.
This may entail having more younger people or women as board members.
Prof Manzoni added: 'It's about going beyond the usual suspects... Diverse teams are less vulnerable to groupthink.'