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Robots at the top table?

Divina Paredes | Aug. 15, 2017
Institute of Directors chief executive, Kirsten Patterson, and EY director, Una Diver, talk about the modern boardroom and its growing reliance on big data.

She says key skills required of directors are now emerging that were not critical five years ago, with cyber skills being one of them - increasing the scope of risk oversight.

"There is also more expectation, especially from institutional investors, that boards must play an increasingly meaningful and prominent role in shareholder engagement that extends beyond general meetings.

Diver says, "The risk and compliance landscape for directors is likely to change significantly in the next 12 months, as boards get to grips with the NZX's new corporate governance code.

"The code, which mandates higher standards of transparency and disclosure in areas such as director and CEO remuneration, auditing and health and safety monitoring, will inevitably increase directors' workload.

This is the third year the IoD has worked with EY to undertake the annual IoD Directors' Fee Survey, and this year saw a boost in survey participation, making it the most comprehensive to date.

There was more than double the participation rates from non-executive directors on Maori and iwi boards, while input from non-executive directors identifying as from other ethnicities was up 82 per cent.

 

The forward-looking board

Patterson says forward-looking boards have diversity of thought around the table. This is important so that when the board is looking at complex and uncertain issues, each person will bring a slightly different perspective.

"When you piece those different perspectives together, it gives you insight."

She points out having diversity alone in the board is not enough. It is one thing to get diversity around the board, it is another thing to get it work effectively.

"You need to ensure you have board dynamics environment, where people can participate," says Patterson.

She says the need is for directors who are well connected to their shareholders and stakeholders.

They are scanning the environment, reading a lot, engaging with different networks and management teams and consider geopolitical issues and consumer trends, says Patterson.

"What is happening in the digital space in terms of technologies coming through? What are opportunities and threats as a result of these changes?"

 

'Go beyond the dashboard'

"The best directors are collectors, are curious and are curators," says Patterson. "They are out collecting information, are interested about what is happening and are curious about a range of topics, and are able to curate that information really well."

Diver says the not for profit sector can be a launching pad for the director role. This is a complex and challenging sector that is always looking for support, she explains.

Have some governance education that helps you think about the role from a new lens, adds Diver.

 

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