Much has been written about the impact of the pandemic on our daily lives. Locked down in our homes, consumption of technology for business and leisure has reached unprecedented levels.
Many commentators have explored how this will play out post-lockdown; reduced international travel, sustained high levels of video calls and softening demand for office space are just some examples.
For technology businesses and investors, it is not what is happening in our homes that is most interesting, but the conversations happening in (virtual) boardrooms. The pandemic and resulting lockdown precipitated the biggest business continuity test imaginable. And it has not gone well. The failings of large organisations to address their technical debt have been thoroughly exposed.
“Keeping everyone involved when you don’t have those corridor conversations and that office osmosis brings a different kind of challenge,” says Andy Barratt – Managing Director, Ford of Britain and Henry Ford & Son (Cork) Ltd.
Tough times often call for tough measures. In the current environment, directors are likely to be ‘meeting’ more often than usual to discuss, take and implement significant decisions around their business’s response to the COVID-19 crisis.
But with limitations on social contact and gatherings, most boards are being forced to hold these important meetings virtually.
It is important (perhaps now more than ever given the scrutiny that decisions made during this crisis may face) that directors are careful to exercise their decision-making powers in line with the company’s constitution, and also, from a practical perspective, that the virtual meetings themselves are well structured and delivered.
In general, the larger the company, the worse they have fared. Short term focus on maintaining the share price, incentives that reward maintaining the status quo and support an “if it ain’t broke, don’t fix it” mentality, and the inertia that plagues large organisations, have left companies ill-prepared.
The ongoing wave of business disruption that is being led by many technology innovations and their resulting consequences is crashing at our shores.
Boards are concerned, and rightly so, about addressing these issues before their revenue streams, brands, share values and bottom lines are negatively affected.
Moreover, outside stakeholders from activist investors to regulators are starting to demand action and improvement in how companies manage digital risk. Whether leaders fix these deficiencies themselves or are forced to, change is widespread and unavoidable.
NTT Security’s Global Threat Intelligence Report identified a 350% increase in ransomware and called out spyware as the leading malware attack tactic, indicating that hackers are in it for the long haul — waiting for the chance that they know will come.
Boards also need to play the long game and this starts with understanding and governing technology fuelled disruption. Addressing this challenge boils down to improving boardroom digital diversity.
Corporate directors across industries can do this by introducing digital competencies into their boardroom and by actively developing the digital IQ of all of their board members.
Speed is everything in today’s tech-driven business world. In an effort to speed up even more, some so-called progressive business leaders are cancelling in-person meetings in favour of the latest high-tech solutions.
Face-to-face meetings allow for clearer communication. In addition to being able to read facial expressions, body language, and inflexion, in-person meetings often end up being more positive and considered more credible than online or virtual conversations.
Without non-verbal cues, you also run the risk of misinterpreting information. In fact, 60% of people regularly misread tone or message when communicating via email or phone, according to Entrepreneur.
Not only do in-person meetings tend to be more positive, but they also tend to be more productive. On average, an in-person meeting generates about 13.36 ideas versus a virtual meeting, which generates 10.43.
And although virtual meetings are sometimes more convenient, nearly 70% of people admit to browsing social media to pass the time during audio-only conference calls.
Even though there can be a prioritisation of speed over face time grossly underestimates the power of human interaction and the importance of face-to-face communication. If the point of business were simply to accomplish as many tasks as possible, then yes, an email would probably do. But that’s not what real leadership is about.
If you’ve ever been on the bad side of cyber miscommunication, you’ll agree that faster isn’t always better.
Managing a successful team and, consequently, a successful business requires personal connections and trust. Business is, in large part, about building relationships. Being a successful leader requires emotional intelligence as much as it requires drive, discipline and best practices.
Despite some benefits to video conferencing, studies show there is simply no substitute for the effective experience of face-to-face communications. In fact, research from Vanessa Bohns, associate professor of organizational behavior at Cornell University, shows face-to-face interactions are 34 times more successful than emails.
CEOs know that trust and camaraderie build great teams, create loyalty, and are the basis of moving a business forward. Wealth and success depend on it. That success comes from, and is built through, face-to-face interactions and experiences and cannot be replaced in the same way with virtual experiences.
“People still feel they are at a disadvantage when they are remote,” said Rob Enderle, president and principal analyst of the technology advisory firm Enderle Group, in an article for CIO Magazine. “Side meetings, individual breakouts and even social interaction after meetings are not addressed by current video conferencing solutions.”
Technology assists us with many tasks in one way or another every single day. While technology can be an amazing and valuable tool that helps us in numerous ways, the wrong tools and apps can be incredibly frustrating. Most people think of technology as their best friend or their worst enemy. For board directors where many are at or approaching retirement, technology tends to draw more jeers than cheers.
When board directors are using the right technology, it can increase the pace of their work from a snail’s pace to that of a roadrunner. The wrong technology slows the pace of business down, exacerbates mistakes, and opens up dangerous new opportunities for risks.
Boards become vulnerable. The right board management governance software assures compliance, solves security issues, and enhances good governance principles. Boards become productive and efficient and are better able to keep pace with today’s business practices.
Essentially, the right modern governance tools set the stage for ultimate corporate success and profitability.
The Wrong Technology Creates Board Meeting Inefficiencies
The pace of corporate business is such that board directors can no longer wait for quarterly reports and updates. Corporate business happens in real-time. Without the right technology, board directors are left out of the loop and in the dark.
Board directors need the ability to stay continually connected and engaged with management and the pulse of their organizations. The wrong tools and apps can hang them up.
Routine tasks simply take too long. Manual voting processes, delayed meeting RSVPs and paper processes bog down corporate secretaries. Last-minute agenda changes can increase labour time and other costs greatly. Preparing agendas and board meeting minutes takes a lot of time to complete and get approved with manual processes.
Security Is Sorely Lacking in Boardrooms and in Board Processes
Board directors are keenly aware of the high risks of cybercrime. If it hasn’t been drilled into them enough, the media continually reminds them by reporting new instances of data breaches.
By and large, board directors find IT to be too technical and confusing for them to make good decisions about how to protect the board and the company. Cybercrime is more sophisticated than ever. Hackers are working doggedly around the clock looking for ways to penetrate multiple layers of security to make corporations vulnerable.
Nearly everyone now uses email, but once again, the media tells us that using personal and business email accounts and other electronic apps for communication lacks the necessary security to protect confidential board business. Insecure communications also pose a risk of accidentally sending disclosures to the wrong parties with no controls to prevent it.
While security is sorely lacking in the technology realm, boards that continue to use dated paper processes can’t have the assurance that their important documents are safe. Paper documents may be difficult to find if they’re stored in multiple locations, which means that it takes a long time to get the right documents or risk not being able to find them at all. What is worse is that paper is subject to natural disasters such as fire, floods and damage by vermin.
Finally, recent events, however, have identified core values that need to be revisited and enhanced.
Many businesses have, in the past, viewed face-to-face meetings as a cost center or a luxury. The residual trauma of this global experience and the absence of in-person time with one another has now reconfirmed the value of such interactions, purpose and trust.
Successful leaders know that people are their most precious resource. Now they are also realizing that those people, meeting with one another face-to-face is a critical part of business, and more important than ever before.
Regular computer systems lack the features and security to prevent employees and others from gaining access to confidential information, giving control to all the wrong people.
Tech Equipment Can Be Too Complicated to Use
While many boards need to meet more often because of the pace of the organization’s needs, the costs and scheduling can be a nightmare. The travel, food and lodging expenses of bringing on board members from various states or other countries can be quite exorbitant. It can be difficult to quickly find dates that accommodate all directors because of waiting for responses via phone and email.
Technical equipment can be complicated to set up and use. Systems may be electronically incompatible with each other. Poor audio or video quality makes for unproductive meetings. Some pieces of boardroom equipment are less secure than other pieces, setting the stage for spreading pesky viruses. If all that isn’t bad enough, cybercriminals have been known to hack into boardroom cameras, placing company business at risk.
Nokia-chairman Risto Siilasmaa shared his thoughts on why directors should open their minds and consider new ways of thinking about the future even if a company is performing exceptionally.
“When your team considers only a single plan with no alternatives, alarm bells should ring. Not preparing for alternative scenarios – even the most unlikely ones – is a guarantee of being blindsided. Thinking in alternatives is not just about identifying options to an existing situation but about constantly imagining and manufacturing alternatives. By making this mindset part of your leadership team’s culture, you automatically start to come up with a higher number and wider range of alternatives.”