Gigi Dawe - How Can Boards of Directors Effectively Operate Within a Complex Digital Environment?

Search

Loading...

News

Fellows

Print article
Mar 22, 2021
by
Newsletter
Register for our Newsletter and stay up to date
Register now
Gigi Dawe - How Can Boards of Directors Effectively Operate Within a Complex Digital Environment?

In the latest installment of the Salzburg Questions for Corporate Governance, Gigi Dawe, Director of the Corporate Oversight and Governance Department at the Chartered Professional Accountants of Canada, suggests questions for boards to consider operating in an evolving digitized business environment Gigi Dawe is the author of the latest installment for the Salzburg Questions for Corporate Governance series

This article is part of the Salzburg Questions for Corporate Governance series, facilitated by the Salzburg Global Corporate Governance Forum

The digital economy is developing at a breakneck speed, driven by vast amounts of data about virtually everything. Consequently, boards are operating in a complex, data-intense world.

To put this in perspective, global Internet traffic (a proxy for data flows) was:

  • 100 gigabytes (GB) of traffic per day in 1992;
  • 46,600 GB per second by 2017 and
  • 150,700 GB per second is projected by 2022. [1]

Meanwhile, poor data quality costs the US economy up to $3.1 trillion yearly. [2]

Should This Influence Board Structure?

There is a notion that in a fast-paced, digital business environment in which real-time decision-making is required, board composition and structure should be reconsidered. Board structure has remained relatively stable throughout the last century. [3] Boards typically meet four to six times per year plus committee meetings; contact with management is through board meetings, and composition typically reflects executive leadership and industry expertise. However, restructuring to deal with complexity may be antithetical to what is needed from boards. The current structure supports a board's key responsibility – to ensure that an organization's strategy is developed and effectively executed.

Let's not forget that through the COVID-19 pandemic, many organizations were able to adapt and to be innovative and agile – without changing the fundamental board architecture. To excel in a rapidly evolving business environment, boards require adequate knowledge to examine complex issues honestly. However, they are responsible for assessing the strategy and integrating emerging technologies into that strategy, not for the transformation itself.

That said, shifting to a digitized environment involves fundamental changes in an organization's culture, operations, and processes. It requires agility and technical expertise.[4] Does the board's structure then need to mirror those changes? Do boards need to re-think who is sitting at the table, how and how often they meet, and how they respond to real-time challenges without being present in real-time? Yes, I believe they do, but as an ongoing practice, not just in response to a complex digital environment.

I propose the following questions for boards; to honestly and critically assess whether, or how they can adapt to increasingly complex business conditions.

1) Are we open to taking action in areas previously considered outside of our scope …

  • to objectively assess a strategy for digitization and whether incremental change or a structural change is necessary?

2.     Do we have the confidence to …

  • acknowledge what we don't know?
  • learn content outside of our professional knowledge?
  • question what we hear?
  • demonstrate a voice of reason and stability in a volatile environment?
  • resign if it is more than we feel equipped to oversee?

3.     Do we possess the depth of knowledge, leadership, and business acumen to …

  • challenge management?
  • lead when the organization struggles with increased complexity and real-time decision-making?
  • build a strategy that is responsive to complexities but stable enough that it does not create unnecessary anxiety?

4.     Can we be flexible and agile within our current structure to …

  • shift how and when we meet?
  • make effective decisions in real-time (this may require implementing processes for shorter, more frequent interaction with players previously considered outside of your authoritative scope)?
  • leverage the opportunities data and technology present to enhance decision making?

5.     Can we put in the time required to effectively perform amidst increased complexity?

I am interested to learn what you think. What's been your experience? Is there something I've missed? Comment below, and let me know.

Notes

[1] UNCTAD Digital Economy Report 2019

[2] 25+ Big Data Statistics - How Big It Actually Is in 2020? (techjury.net)

[3] Governance Rebooted – Corporate Governance in a Disruptive Digital Age, Creatingfutureus, March 2020

[4] Data Governance Primer – Mastering and Shaping a Data-Driven Economy, CPA Canada, Feb. 2020


Have an opinion? 

We encourage readers to share your comments by joining in the discussion on LinkedIn

Gigi Dawe leads the Corporate Oversight and Governance Department at the Chartered Professional Accountants of Canada (CPA Canada). She oversees CPA Canada's development of influential, thought leading resources and events that improve board performance. Gigi launched the governance discipline at CPA Canada to facilitate enhanced board and executive response to market demands. Recently she has been actively involved with CPA Canada's initiative to reimagine the future of the accounting profession. Her history includes consulting in organizational development in a variety of industries. Gigi is a board member of Youthdale Treatment Centres. She also co-chairs the International Corporate Governance Network's Corporate Board Governance Committee and sits on the advisory board of Simon Fraser University's Next Generation Governance Project and Advisory Committee of the Canada Climate Law Initiative. She is a past board member of Active Healthy Kids Canada and Family Daycare Services Toronto. Gigi is a member of the National Association of Corporate Directors, the Institute of Corporate Directors, and the International Corporate Governance Network. Gigi obtained a Master of Laws at Osgoode Hall Law School. She teaches Corporate Responsibility and Ethics in the Masters of Financial Accountability program at York University. She is a Fellow of Salzburg Global Seminar.

The Salzburg Questions for Corporate Governance is an online discussion series introduced and led by Fellows of the Salzburg Global Corporate Governance Forum. The articles and comments represent opinions of the authors and commenters, and do not necessarily represent the views of their corporations or institutions, nor of Salzburg Global Seminar. Readers are welcome to address any questions about this series to Forum Director, Charles E. Ehrlich: cehrlich@salzburgglobal.org To receive a notification of when the next article is published, follow Salzburg Global Seminar on LinkedIn or sign up for email notifications here: www.salzburgglobal.org/go/corpgov/newsletter

Related Content

Jeffrey D. Grant - What Are the Board's Key Roles and Responsibilities When Facing Existential Threats to Their Company?

Apr 13, 2021

Roland Deiser - What Are the Challenges Surrounding Business Ecosystem Leadership?

Mar 10, 2021

Ravi Chaudhry - How Do We Pursue Governance Beyond Compliance?

Feb 15, 2021

Zachary Mollengarden - "Human Capital"​ Disclosure: What Is The Role Of Corporate Transparency In Addressing Social Ills?

Feb 02, 2021

Shreya Bose - Are Consumers Ready To Make More Informed Choices When It Comes To Climate Change?

Jan 19, 2021

How Should Boards Be Addressing Black Lives Matter And Broader Issues Of Systemic Racial Inequality?

Dec 20, 2020

Are Companies Prepared To Handle The Converging Risks Of COVID-19 And Climate Change?

Dec 20, 2020

Shared Prosperity: What Is The Role Of The Compensation Committee In Addressing Income Inequality?

Dec 17, 2020

What Does It Take For A Business To Survive An Existential Threat?

Dec 15, 2020

Myeong Cho - Should Audit Committee Members Be Elected Independently Of Other Directors?

Nov 20, 2020

Kayla Winarsky Green - How Can Human Rights Help Corporations Build Back Better?

Nov 10, 2020

What Next for Corporate Governance?

Nov 14, 2018

Anastassia Lauterbach - Why Must Corporate Boards Discuss Innovation?

Feb 25, 2020

Stacy Baird - Europe’s Privacy Law - A Barrier to Artificial Intelligence or an Enabler?

Dec 18, 2018

Carolyn Frantz - How Could Artificial Intelligence Create New Job Categories and How Can a Company Anticipate These Changes in Workforce Needs and Shape?

Jan 22, 2019

Carolyn Frantz - Artificial Intelligence Will Change the Workforce

Oct 25, 2018

Nicole Lew - How Do Companies Filter Out the “Noise” from Stakeholder Engagement?

Mar 18, 2019

Bharat Doshi - How Do We Retrain Vulnerable Older Workers for the Jobs of the Future?

Mar 12, 2019

John Cannon & Stacy Baird - Is The Board Ready to Address Disruption? 

May 20, 2019

Katrina Scotto di Carlo - How Is the Gig Economy Changing the Nature of the Corporation’s Relationship with its Stakeholders and its Role in Society?

Jun 19, 2019

Stephanie Bertels - Why Is It Increasingly Important for Boards to Clearly Signal Their Position on ESG Issues?

Jul 15, 2019

Michael Ling - How Can a Sustainability Committee Better Look at Potential Risks?

Aug 19, 2019

Imanol Belausteguigoitia Rius - Why Should Organizations Prioritize Shareholder Welfare Over Profits?

Sep 17, 2019

Robert H. Mundheim - What is the Significance of the Business Roundtable Statement on the Purpose of a Corporation?

Oct 22, 2019

Barak Orbach - Do Directors and Officers Have a Duty to Monitor Corporate Culture?

Dec 14, 2019

Barak Orbach - Has the COVID-19 Pandemic Affected Antitrust Risks Faced By Companies and Executives?

Sep 23, 2020

Pamela S. Passman - How Can Boards Provide Oversight on Corporate Culture?

Jan 14, 2020

Dottie Schindlinger - What Can Boards Do to Create Structure and Process Around Innovation?

Feb 10, 2020

Jeffrey D. Grant - Are Boards of Directors Better Prepared for Disruptive Events if They Include Scientists and Engineers?

Apr 13, 2020

Christopher Beltran - What Role Can Entrepreneurs Play in a Board’s Aim to Foresee Disruptive Risk?

Mar 24, 2020

Stacy Baird - Is the COVID-19 Crisis an Opportunity for Corporations to Invest in Workforce Transformation?

May 18, 2020

Stephanie Bertels - What Role Should Corporate Directors Play in Reshaping Our Global Economy?

Jun 09, 2020

Nicholas Allen - How Can Independent Non-Executive Directors Remain the Guardians of Good Governance in Times of COVID-19?

Jun 22, 2020

Seda Röder - How Can Corporate Directors Become More Resilient Before The Next Disruptive Event?

Jul 07, 2020

John Cannon - How Does Business Roundtable's Statement Stand Up in Response to COVID-19 and the Black Lives Matter Movement?

Jul 21, 2020

Jodie Adams Kirshner - What Do Companies Owe Their Workers?

Aug 13, 2020

Margaret Beazley - Will Corporate Practice and Culture Need to Change After COVID-19?

Sep 09, 2020

Catherine Brenner - How Do Non-Executive Directors Look to the Future Whilst Navigating Extreme Unpredictability?

Oct 07, 2020

J. Kevin McCarthy and James J. Killerlane III - What are the Practical Considerations for Boards in a Post-COVID World?

Aug 21, 2020

Christopher Lee - Is the Rise of Index Funds at Odds with Good Corporate Governance?

Oct 23, 2020