Boards must do more to lead transformation: SID chair Wong Su-Yen
By TAN NAI LUN
The Business Times, 21 August 2023
BOARD directors should actively help to transform their organisations, instead of merely focusing on conforming to regulations and meeting today’s performance goals, said Wong Su-Yen, chair of the Singapore Institute of Directors (SID).
For this to happen, directors must understand the organisation’s strategy and have oversight of various topics in an ever-changing environment.
“It’s about taking knowledge of rules and regulations, plus understanding the strategy and direction of the organisation, because one of the biggest threats that organisations face (arises from) transformation,” Wong said.
The ever-changing environment is causing organisations to rethink how they operate. As such, boards should have diverse expertise in charting different areas of uncertainty, she added.
In an interview with The Business Times, Wong said the three key pillars for future-ready board directors are to conform, perform and transform. A board that adds value should also comprise diverse backgrounds.
Yet, many directors nowadays are still focused on compliance.
According to SID’s Singapore Board of Directors Survey 2022, less than 50 per cent of companies surveyed held sessions dedicated to strategy. Of these, more than half said that development and execution of strategy was left to management.
To establish “holistic” standards and help boards identify those with the requisite competency, SID in August announced an accreditation framework for board directors.
The framework, based on SID’s Director Competency model, goes beyond the conventional focus on directors’ duties and governance. It also considers sustainability, strategy, digital skills, human capital, and financial skills. According to Wong, this is to ensure that accredited directors have a broad-based view of organisations to help lead them into the future.
SID’s survey also found that while 78 per cent of respondents have a board diversity policy in place, only 53 per cent intend to increase the diversity of their board.
Wong said that diversity is additive: “Just because you have people who fulfil one criterion of diversity, it (doesn’t) mean that you don’t need to fulfil the other criteria.”
Diversity is also multidimensional, and extends beyond gender, race and age.
“We’re trying to go beyond gender, to ensure that we have other dimensions of diversity represented in the boardroom, because the boardroom of the future will require that kind of multifaceted view,” she added.
But while it is important to have different views in the boardroom, directors also need to provide and be aligned with constructive ideas – this means striking a balance between challenging and supporting the management, Wong said.
Thus, SID is also looking to train directors on the behavioural aspects of the job, beyond building the skills and knowledge.
In late July, SID launched a new year-long Board Readiness Programme to prepare senior executives and professionals for board directorship positions.
It includes experiential modules that go into case scenarios and mock simulations. It also focuses on other skills needed by directors, such as influence management.
“Very often, if somebody comes from an executive role, they may be more hands-on, for example. In a board, however, a lot of it is about trying to influence fellow board directors,” Wong said.
With its first edition in collaboration with Singapore Computer Society Women in Tech Chapter, she hopes this can contribute to building the community of not just female directors, but also those with digital expertise.
Speaking on recent media reports on poor governance by boards in Singapore, she said these help provide clarity around what expectations are.
These expectations are rising, she noted: “The more we shine a spotlight on both good and bad behaviour, the more we can understand what that standard is.”
In future, Wong hopes to increase SID’s reach, improve the nomination processes of boards, as well as build links for SID members to overseas markets.
Bringing in more members can increase the number of progressive or better-trained directors on a board, making it easier to effect change.
Organisation transformation also requires pushing boundaries and challenging the status quo. This requires tapping on new skills and perspectives that often go beyond immediate contacts and networks, Wong said.
According to the 2023 Singapore Governance and Transparency Index, just 12 per cent of listed companies tapped on external sources when identifying board candidates.
Meanwhile, with local organisations trying to grow globally, directors also need to have a good pulse on how to grow their business in overseas markets.
Board directors are often caricatured as policemen or school principals, tasked with protecting the organisation and enforcing rules, Wong said.
“Perhaps an updated depiction of the board director is that of an expedition leader. His or her role involves plotting a path forward, navigating uncertain conditions, and at all times ensuring safety is paramount,” she said.