Fit for the Future: An Urgent Imperative for Board Leadership

For boards and their leaders—the independent chair or lead director and committee chairs—this is a period of challenge and transition that entails a difficult balancing act. In exercising their current board leadership responsibilities, they need to perform against heightened, often short-term expectations and to contend with ever-intensifying scrutiny from a wide range of stakeholders. At the same time, they need to meet the demands of the future by fundamentally reshaping how the board thinks, operates, and interacts with the business. 

This is a report about leading boards into the future and about positioning boards to help their companies meet the challenges of the future. It argues that the pace and scale of change require a different modus operandi from the board governance model prevalent for the last 100 years, a new approach involving greater speed of decision making, proactive behaviors, adaptability, and innovation. 

Boards will need to renew themselves by adding new types of expertise, experience, and capabilities to their ranks. They will need to take a critical look at how they perform and focus on continuous improvement. Their discussions will become more intense, and their structures more flexible. And they will need to carefully fulfill their supervisory and monitoring role while working in close partnership with management to shape business strategy.  

In all of this, the role of a strong and effective board leader—the specific focus of this report—is crucial. It is the leader’s job, as ever, to build and maintain a high-performing board. This is an increasingly challenging task given the demands on boards to ensure that the corporation is fit for the longer term, and it requires new leadership qualities. Board leaders now need to be able to do far more than preside over board or committee discussions. 

They need to be capable of catalyzing and orchestrating a transformation in how the board is composed and structured, how it operates and interacts with the business, and how it holds itself accountable. 

The research summarizes the leadership qualities required with a word not often used in modern business parlance: fortitude. It’s a fitting term, because it has many layers of meaning. Courage, for sure, but also strength of mind and character, boldness, perseverance, and resilience. These will all be needed, because sustaining the new approach will demand vigilance, even from leaders of the best-governed boards who may have already adopted many of the practices we outline in the report. As a Commissioner put it: “It’s easy to slip into a perfunctory frame of mind. Even big companies and high-performing boards need a reminder that none of the attributes of effective leadership can be taken for granted.” And another Commissioner articulated the required mind-set as follows: “Many board leaders know what they should do to improve their boards, but lack the courage.” 

This report takes a deeper look at major, accelerating business trends and their implications for board oversight (Part 1), and recommends specific actions board leaders can take in collaboration with their fellow directors—on board structure, engagement, composition, culture, and disclosures—to position their boards for the future (Part 2). As an aid to implementing the specific recommendations (summarized in Part 3), we offer a set of practical tools, examples, and case studies that board leaders and their boards can use to trigger the changes that we think are essential to keeping the board focused and forward looking—particularly in disruptive and demanding times.