A world that looks set to remain volatile, uncertain, complex and ambiguous presents a myriad of challenges and opportunities for boards in 2018 and beyond. Here are eight items that will be priorities on the Board agenda for the coming year.
General Data Protection Regulation (GDPR)
The General Data Protection Regulation will come into force on 25 May 2018 and will affect all organisations that collect or process the personal data of European citizens, regardless of where those organisations’ physical offices are located. The regulation strengthens and enhances the previous Data Protection Act and introduces new elements designed to safeguard individuals’ privacy and control over their personal information in the modern era. Greater emphasis is placed on organisations’ accountability and compliance, meaning that strong governance and oversight will be key factors in successful implementation by organisations.
Boards need to confirm that their company has robust procedures in place for compliance with the regulation, including actions to be taken in case of data breach and the ongoing management of individuals’ data. Penalties for non-compliance will be significant and boards will closely monitor the first test cases of companies that are in breach to establish how the regulation will be interpreted and enforced.
See how Diligent can help you better plan your board agendas and adhere to better governance practices in 2018.
Uncertainty continues to reign on the terms of the UK’s exit from the European Union but the lack of clarity may, conversely, have had a stabilising effect upon the economic and business response, with markets remaining relatively steady while no hard and fast facts have been determined. This situation cannot endure indefinitely, however, and the UK will leave the European Union on 29 March 2019, barring an agreement by all 27 member states to extend negotiations. Brexit is a situation without precedent and there is no doubt that risks and opportunities will abound, hence its importance to board agendas globally.
Foster a transformative mindset
In a volatile climate, boards have a responsibility to embody and promote a transformative mindset. Disruption is the co-pilot of technological innovation, as evidenced in industries such as transport (Uber) and visitor accommodation (AirBNB). Boards must ensure that they challenge the status quo before it is challenged for them. Asking questions that provoke visionary investigation, such as looking forward twenty years and more, reduce complacency and short-termism and enables organisations to identify the innovative projects and areas of R&D that will improve competitiveness in the long term.
The nature of business and pace of innovation means that change is a constant and therefore needs to be managed. From personnel management to infrastructure enhancements and the implementation of new technology, every aspect of an organisation is subject to change and helping the business to adapt is crucial to success. The ability to incorporate change enhances business agility and its ability to respond to challenges and threats. Therefore, ensuring that the organisation is managing change in a productive and positive way is a key responsibility for the board.
Talent acquisition, engagement and management
Ensuring a dynamic pipeline of employees with the skills and vision to drive an organisation’s progress is a critical challenge for businesses. The increasingly global nature of today’s workforce widens the pool of potential recruits but also heightens the competition among companies to attract and retain great talent. Employees, particularly millennials, choose to work for companies that align with their personal values, offer clear-cut opportunities for career development and support a positive approach to work-life balance. At the same time companies need to maximise successful recruitment and reduce attrition rates by identifying those strengths, skills and character traits that are critical to achieving their business goals. Ensuring that the business is adapting and honing its recruitment and ongoing employee engagement strategy to meet candidate expectations and business priorities will reap significant rewards.
Allied to the increasing pace of innovation and change is the necessity for boards to ensure that their skills and experience continue to reflect the opportunities and challenges faced by the organisation. A balanced board comprises individuals with complementary skillsets and diverse experience who can offer counsel and challenge in a constructive and appropriate way. Reviewing board make up should be a standing item on the agenda to guarantee that its duties are being discharged with maximum effectiveness.
Whether an organisation has ten employees or ten thousand, security will remain high on the agenda. From human error or unanticipated machine failure to malicious multinational cyber attack, the scope for managing security risk in all its forms remains immense; the consequences of a breach can be catastrophic. Ensuring that organisations have worked to identify and manage risk and drawing on expert counsel to mitigate it will be standing items on the board agenda for the foreseeable future.
Crisis preparation and reputation protection
Linked to the above, crisis preparedness and reputation protection go hand in hand and should be a natural priority for board members who are often thrust into the limelight when crisis strikes. Boards should challenge management to deliver a clear picture of the organisation’s procedures and fail-safes in the event of a crisis. Boards should also work to put a framework around their own response to a crisis. This provides a reference in what will be immensely challenging circumstances and should improve reaction times, something which in itself can improve the situation. It’s hard to predict the exact nature of a crisis, but committing resources to preparation can reap untold rewards should the worst happen.
These are just eight of the many priorities for boards in 2018 and beyond. Facilitating board performance is at the heart of Diligent Corporation’s business and we wish all our present and future customers a very happy and successful 2018.
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