Enhancing directors’ strategic change capabilities

BoardroomTalk
Dr Proctor Nyemba & Dr Justine Chinoperekweyi

How can boards foster strategic change capabilities? What value do such capabilities bring to organisations? To what extent do existing corporate governance prescriptions promote strategic change capabilities? In our previous article, we reinforced the strategic thinking and strategic leadership roles of corporate directors.

In traditional corporate governance, organisations foster these capabilities through training of corporate directors. Additionally, it is widely held that board diversity facilitates board effectiveness and strategic change. Rules-based corporate governance also focuses on board composition, qualifications, and skills of corporate directors as determinants of strategic thinking and strategic leadership. Sadly, some boards have surpassed these broad corporate governance prescriptions, yet, they exhibit dearth of strategic thinking and strategic leadership.

How is your board manifesting strategic thinking and strategic leadership? Is contemporary corporate governance in a rut? At a time when Zimbabwe is driving innovation and industrialisaation, assessing strategic change capabilities of boards should be a top priority. Our boards must champion the process of building strong institutions and elevating humanity. Mediocre boards cannot match the demands of the fast-paced, highly competitive, and digitized business environment. These boards are repugnant to organisational effectiveness agenda and to socio-economic transformation. To build high performing, resilient institutions, our boards should be challenged to act beyond continuity and stability. Board performance measurement and assessment should be broadened beyond predefined corporate governance prescriptions to capture the realities of business and the dynamics of emergent change.

Organisations are complex adaptive systems. As such their performance cannot be confined to some predefined, rigid measures, neither can we fit the organisation into some well-documented models.

Confining performance standards to specific predefined measures breeds mediocrity in boards, and does not awaken innovation.

Furthermore, predefined standards work under planned change and not emergent change environment.

Focusing on the oversight role of boards, we suggest a multidisciplinary approach to corporate governance.

In today’s organisations, board oversight function should be exercised on self-agency systems, not, frozen, bureaucratic, hierarchical, and political systems. Unfortunately, some boards still adopt 20th Century oversight, which is predatory, relies on top-down decision making, and has deeply entrenched power structures. Such boards have a ‘think tank’ mindset, implying that only boards members have the capacity to think. Managers and all other organizational members are employed

learned helplessness, among managers, is not only frustrating and draining, but thwarts innovation and creativity.

This slows down organisation transformation. Those who assume board leadership roles must be responsible orchestrators of real transformational growth and development.

An organisation development (OD) approach should be embraced by corporate directors to crystallise corporate governance in organisations. Board should be guided by real OD and not the adulterated OD or HR-OD.

The primary concern of organisation development is the health and well being of all organisational members, and the design and implementation of a strong and dynamic business case. In partnership with the CEO and management, boards need to practice OD knowledge to effectively deal with power issues, design strategic change programs, orchestrate cultural transformation, determine the organisation’s mission and values, introduce new systems and processes, and build resilient organisations. Directors should be supported to shift their mindsets from a mechanistic view of the firm towards appreciating values of engagement, participation, and democracy, beyond the boardroom.

Through intelligent inquiry and effective engagement, boards must demonstrate business and strategic awareness and a macro-perspective to corporate management and corporate governance. It’s unfortunate that some of our boards are sugarcoating corporate management as corporate governance. This gives a false sense of corporate governance effectiveness.

This has only supported incremental growth and not transformational growth and development.

Corporate Directors must appreciate the inadequacy of incremental growth, or ‘moving from point A-B’ in an emergent change environment. Boards must be strategic.

To drive organisational effectiveness, boards must:

Apply discovery and prediction techniques to address technical and adaptive issues in organisations.

Foster self-organisation, that is, the ability of the system to transform itself. Exceptional boards enhance the capacity of organisations to actualise their potential.

Their organisations have the capacity to ‘talk to themselves about themselves’ and self-renew.

Self-organisation enables an organisation to effectively adapt, evolve, and to be resilient, boundless, and creative.

Build the organisation’s ability to assess its current functioning to achieve its goals and adapt to the ever-changing environment. In traditional corporate governance, this capacity is an exclusive privilege of board members.

Demonstrate leadership culture and essential leadership traits such as mission-critical, visionary, analytical, and objectivity.

Increase strategic awareness among all organisational members.

Focus more on sustainability, the elevation of humanity, and bringing presence to human systems.

As boards strive to uphold and report corporate governance compliance, it is equally important that directors manifest strategic change.

This can be done through exhibiting transformational growth and development.

Boardrooms, through meaningful and generative dialogue sessions, should be engines for strategic thinking and strategic leadership.

This should be manifested through disruptive insights, establishing novel goals, game changing interventions, healthy workplaces, strategic partnerships, leadership culture, and more.

In addition to the decorated corporate reports, the majority of which shows positive results, may the manifestation of good governance be evident in all our organisations.

Authors

Dr. Proctor Nyemba is Certified Professional Director®-Pro.Dir specialising upon Governance and Strategy, Governance and Risk, Governance and People, Governance and Board Effectiveness, Governance and Resources, Governance Culture and Behaviour. Proctor helps board members and executives understand their role in governance so they can succeed in the boardroom.

Dr. Justine Chinoperekweyi is an OD scholar-practitioner and gadfly corporate governance practitioner. He is CEO of Centre for Organization Leadership and Development. Justine serves as Board member of International Society for Organisation Development & Change (USA), and other regional organisations. He facilitates OD, leadership, and governance programs globally. He is also Advisor at Global Management and Business Group, Inc.,

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