The boardroom has always been a challenging place to navigate, but it’s become even more so. Global events, as well as societal shifts, mean that the board director of the present – and the future – needs a raft of new skills, and increased understanding of much broader issues than just reaching the organisation’s profit targets.

On top of being skilled, capable and intelligent, today’s directors must be able to respond to rapid changes in technology, political and economic uncertainty, regulatory changes, market volatility, environmental, social and governance (ESG) issues, the increased need for transparency, investor activism and media scrutiny.

‘The world has changed enormously,’ says Cas Coovadia, CEO of Business Unity South Africa (BUSA). ‘We are living and working in a far more complex environment with new demands on businesses, and it’s vital that your directors understand them. Capitalism is in crisis, and although that’s not to say that it should be dismantled, people are beginning to ask questions because it hasn’t brought equality. This demands that we do introspection on how we do business.’

Referring to Rebecca Henderson’s Reimagining Capitalism, Coovadia says the author raises the point that we need to be more sensitive to the way we manage our responsibilities to communities, employees and the environment.

‘These things are complementary to profit and growth, and we need a multi-stakeholder approach – it’s not just about the shareholders any more. Directors need to be sensitive to these issues.’

Read ‘What it takes to be a responsible business leader’ for the three characteristics that describe ethical leadership in South Africa.

Corporate governance is more important than ever
Shirley Zinn, an independent non-executive director and chair on several boards, points out that being a director is a complex task to begin with. ‘There is so much you are expected to do, know and be accountable for,’ she says, and lists some of the responsibilities of modern-day company directors:

• Keeping up and in line with legislation and other regulations and guidelines, like the King Code
• Representing shareholders and adhering to the board’s code of conduct
• Safeguarding the company’s prosperity
• Fulfilling a fiduciary responsibility

In addition, there are sustainability considerations, such as transformation, inclusion and representation, and doing the right thing for the environment. ‘You have to take into account your social impact and social justice issues. Plus, there’s monitoring, oversight and governance.’

Zinn makes the point that when oversight and governance go wrong, the results can be corporate disaster, as we’ve seen in the recently released report of the Zondo Commission. ‘How do we improve corporate governance and keep people accountable?’

Boards and organisations don’t operate in isolation
Coovadia believes that an important factor will be looking beyond boardroom walls to take context into consideration. Boards must consider their larger impact on all aspects of society.

‘For instance, in South Africa politics is encroaching on business and the economy,’ he says. ‘For many years, the approach of business was to influence the economy without becoming political. And business is an inappropriate political mechanism, of course. But we do need to get involved in politics now – still without becoming political.’

Looking even further afield, he points out that in a globalised economy we can see how various events affect businesses. The Russia-Ukraine war’s impact on food prices is one such example. The disruption of supply chains thanks to the Covid-19 pandemic is another.

‘We cannot be immune to that,’ says Coovadia. ‘Directors need a broad understanding of global dynamics and to have discussions at board level to plan for such occurrences as best they can.

‘Of course, they must understand the business of the board, such as governance and ethics, but given the contexts we find ourselves in, there is more responsibility on directors to understand the broader issues. To me, that’s important.’

Zinn agrees. ‘Soft skills are very important now, and many boards need to learn them. Yes, directors need the business knowledge, experience and wisdom – but mindset, attitude and behaviour are very important too, as are values and purpose, and emotional and social intelligence. Today’s board members have to work together to ensure the best interests of the organisation, to ensure its growth and development – and the advancement of all its stakeholders.’

‘Directors must understand that the line between business and society are now blurred,’ adds Coovadia. ‘Ricardo Hausmann, for instance, the former Minister of Planning for Venezuela and now a professor at Harvard, told me that the second biggest conglomerate in Venezuela was targeted to be nationalised six times, and six times there was a community uprising in response. Why? Because the business added so much value to the community in which it works.

‘When I speak at events, I often say that we are very happy to brag about Sandton being the richest square mile in Africa, but one mile away is Alexandra – the poorest township in South Africa. We can no longer see that as government’s problem. Business needs to start considering its broader influence and adopt a longer-term, more sustainable approach to the society it operates in.

Read ‘The evolving role of the 21st century CEO’ about the demands on 21st century CEOs and executive blind spots that can hamper their progress.

Diversity 2.0
To achieve all the above, boards will require much greater diversity. ‘We should be proactively searching for Black and women candidates, for instance, but also ensure that they meet all the other criteria for serving on a board in terms of their knowledge and expertise,’ says Coovadia.

Zinn takes the diversity agenda a step further, pointing out that diversity goes beyond gender and race to consider disability, diversity of thought, diversity of lived experience, diversity of personality, parental status, level of education, rank and position. It’s really about putting together a board that is as diverse as possible in its worldview to reap the greatest rewards.

Being comfortable and confident with technology
Finally, there’s technology – which board members need a good understanding of. ‘If we are not responsive enough in adapting to the digital environment and the fast pace at which tech is moving, we will not remain relevant,’ says Zinn. ‘We must migrate organisations to be more digitally agile. We also need to consider how we use technology to deal with inequities, poverty, efficiency, longevity and sustainability.

‘In addition, cybersecurity poses great challenges – we need to be able to manage risk from a broad perspective. Cybercrime can affect our prospects, so we must equip both staff and clients accordingly and understand how to manage the risk that comes with it.

‘Tech is a key enabler,’ she concludes, ‘but the future is still human, and human needs will drive the requirements of technology in the years ahead.’

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