Directors and Boards: Reimagining The Board
We are in the midst of a third wave of how we understand the role of the board.
October 2021
Venture capitalist Scott Lenet once described the changing nature of competitive risk as "less the shark that might come and eat your lunch and more death by a thousand tiny piranhas." In other words, any one competitor may not be cause for concern, but the cumulative effect of many competitors, if not monitored and taken seriously, can overwhelm an established brand.
The role of the board is going through its own "thousand tiny piranhas" moment. Ask any director to identify the transformative events that mark out changes in board governance, and they will likely point to the series of high-profile governance failures that led to Sarbanes-Oxley and a recalibration of risk oversight, or the passage of Dodd-Frank 10 years later as a response to governance failures that helped fuel the great financial crisis.
We are in the midst of a third wave of how we understand the role of the board, and this time the change is not driven by a legislative event but by a number of converging forces that are reshaping the definition of good governance, including technology, talent, climate change, social demographic shifts and the increased transparency driven by social media.
"In the last 15 years or so the level of strategic complexity that boards and directors have to face has increased exponentially, ..."
