4 priorities for company boards in 2021

Boards are in a unique position to mold the future of an organization and under the current circumstances of fighting a dual global crisis, it is in their power to drive positive holistic transformations.

2021 is a decisive year for all companies as they evaluate different aspects of their businesses, prepare for a surge in existing challenges and are forced to address issues like creating sustainable value by building resilience in a swiftly changing business environment. Amid increasing stakeholder concerns and accelerating investor scrutiny, focusing on the below four priorities in 2021 will serve company boards well, according to an article by EY.

Overseeing strategy creation that ensures long-term value

Currently, most boards are collaborating with management teams for overseeing a strategy formulation that drives optimal long-term value – a complex process which requires solving issues for the now, probing the next, and re-imagining a world beyond the present.

In the changed business environment dominated by stakeholder-focus, boards should ensure that the new strategy framework defines both non-financial and financial value drivers while considering the interests and needs of employees, investors, consumers and the larger society.

Long-term assumptions while formulating the strategy must be developed using information from both external and internal sources on megatrends, private equity and venture capital investment flows, while also monitoring activities like mergers and acquisitions, alliances and joint ventures. A continuous risk monitoring should also be included in the strategy for early identification of emerging threats and opportunities.

Boards should also review the implementation of the strategy periodically and take adequate measures to course-correct if required.

Encouraging enterprise resiliency amid uncertainty

Globally, boards are playing a crucial role in helping and supervising management as they prepare the organization for the new normal and build resiliency into the business. Such work includes updating boards regarding scenario plans, contingency planning and stress testing which critically highlight key assumptions and different variables across multiple extreme scenarios.

Strong companies will embrace agile approaches for navigating swiftly transforming business environment in boardrooms and at the management level. Boards will be required to anticipate change proactively and address the opportunities and risks associated with new trends shaping the business context.

Boards should promote and ensure that the management uses data-driven intelligence from multiple sources for refurbishing enterprise resilience.

Driving workforce transformation and backing new ways of working

Historically, the norm for boards is to limit their talent oversight duties to C-suite planning and succession. Today, boards recognize human resources as a significant driver of long-term value. The responsibilities of boards regarding human resource will widen throughout 2021.

Currently, the ways of working are shifting rapidly. There are roughly five generations working together amid an unprecedented wave of digitization and technology adoption. The workforce is no longer functioning from a common office space. There are people working remotely and from office, people working free-lance and full-time, with a fixed compensation and annual pay cycle.

The future of work has arrived before-time and businesses are struggling to formulate a new corporate culture that is suitable for all the variables of the system. Further, there is an increasing need to reskill and upskill the workforce. Boards must oversee this great workforce transformation and participate actively in the new workforce management strategy.

Implementing diversity, equity, and inclusion

2021 is expected to be a hallmark year for diversity, equity and inclusion (DEI) progression, as business leaders implement essential changes to recruitment and management procedures and boards own up their and their management team’s accountability.

Leading on the DEI front is much more significant than maintaining social capital. Several studies have proven, and most successful business leaders have recognized DEI as an important priority for driving business value. Many companies have made bold commitments on DEI as well. However, this time, stakeholders are looking for companies that live up to their promises and bring transparency in their proclamations. It is no longer sufficient to make bold claims, those claims must be backed by verifiable data.

Boards can make certain that their companies set their DEI goals right and implement the required strategies and systems for driving DEI within the upper ranks, throughout their workforce and also among business partners.