Compliance
Risk
Succession and incentives
Performance
DEI
ESG
Future-back strategy
How boards can guide their companies through growing turbulence and the rise of stakeholder capitalism.
The New Board Playbook
PURPOSE
FUTURE-PROOF BOARD AGENDA
BOARD OPERATING MODEL
Engagement with management
Governance
Engagement with stakeholders
ETHICAL CODE OF CONDUCT
The New Board Playbook
Back
PURPOSE
• As the Custodian of Purpose, are we steering the dialogue with management to collectively define our company’s purpose?
• Are we pressure testing management’s key decisions and trade-offs using the purpose lens?
• Are we ensuring that management sets clear goals, actions, and accountability for the commitment to delivering purpose?
• A clearly articulated purpose
• A long-term strategy that supports the fulfillment of that purpose
Purpose
• Purpose-driven companies outperform on all dimensions
• A strong purpose creates greater value, should be linked to
• strategy, influences culture, drives decisions and resource
• allocation, and inspires the organization to unleash
• discretionary energy and creativity
CONTEXT
QUESTIONS THE BOARD SHOULD ASK ITSELF
TARGET OUTCOME
• Are we pressure testing management’s view of the most significant trends and possible scenarios?
• Are we challenging management to reassess portfolio decisions and resource allocation against future scenarios?
• For multicore businesses, are we regularly reviewing the corporate strategy with management with the lens of portfolio
• and financial choices, role of the parent, and roadmap to achieve the ambition?
• The most successful future-back strategies maximize the
• potential of the current business by making it cheaper, better,
• faster, broader, and greener, while also taking the first steps
• toward the company’s future vision
• Scenario planning supports visionary thinking for the core and
• new growth engines, while also providing superior risk mitigation
• A strategy that addresses the most disruptive trends of the
• coming 5–10 years
• A balance of focus and execution across growing the core,
• reinventing the core, and building new growth engines
Future-back strategy
CONTEXT
QUESTIONS THE BOARD SHOULD ASK ITSELF
TARGET OUTCOME
Future-back strategy
CONTEXT
QUESTIONS THE BOARD SHOULD ASK ITSELF
TARGET OUTCOME
Environmental, Social, and Governance (ESG)
• True sustainability and responsibility (environmental, social,
• and governance) means accelerating a company’s core strategy
• by proactively addressing challenges, risks, and opportunities
• to create a business that delivers profitable growth in a truly
• sustainable way
• Are we engaging with management on defining a bold ESG commitment and ambition and monitoring their performance?
• Are we ensuring that the company’s value creation agenda incorporates the sustainability interests of a wide set of stakeholders?
• Are we regularly covering sustainability and responsibility at Board meetings and building sustainability metrics into the
• remuneration plan of management?
• Are we ensuring a robust process of assessing the relevancy and importance of major risks and opportunities regarding
• sustainability within the Board and the management team?
• A sound strategy for sustainability and corporate responsibility
• that creates value for the company
ESG
CONTEXT
QUESTIONS THE BOARD SHOULD ASK ITSELF
TARGET OUTCOME
Diversity, Equity, and Inclusion (DEI)
• DEI is an organizational mindset, not a human resources
• program, and companies will be judged by their results
• DEI is a journey of challenging transformation inside
• and outside of the company’s walls
• Have we aligned with management on a clearly defined DEI ambition and strategy that is integrated into the overall business strategy?
• Are we ensuring adherence to DEI principles within Board operations while also overseeing DEI implementation across the organization?
• Are we engaging with the CEO to set up accountability for the DEI program throughout the organization?
• Embed DEI in strategy, operating model, business practices,
• decisions, and everyday behaviors of the company
• Reflect DEI in the composition of the Board, management,
• and employees
DEI
CONTEXT
QUESTIONS THE BOARD SHOULD ASK ITSELF
TARGET OUTCOME
Performance
• Business reviews must focus on key sources of value creation,
• and create a closed feedback loop across the management
• system, addressing strategic planning and prioritization and
• resource allocation, to enable transparent, insights-driven,
• action-oriented dialogues
• Do we understand what is behind our financial performance and are we ensuring that underlying KPIs are closely tied to critical
• strategic initiatives?
• Are we effectively monitoring performance and risks, including managing fundamental value creation?
• Are we intervening in a timely way and supporting management’s right trade-offs and prioritization of resources to address
• any underperformance?
• A systematic process of monitoring actual vs. expected
• outcomes that ensures accountability by reflecting on lessons
• learned and taking appropriate action (such as continuing,
• adapting, accelerating, or stopping work)
Performance
CONTEXT
QUESTIONS THE BOARD SHOULD ASK ITSELF
TARGET OUTCOME
Succession and incentives
• Talent management is more important than ever as technology
• changes the nature of work and employee expectations shift
• Do we have a clear view of the business-critical roles we need moving forward and new capabilities required to fulfill those roles?
• Are we managing the talent strategy, ensuring that it allows the company to attract and retain talent for business-critical roles?
• Do we have a robust plan for emergency CEO and executive leadership succession?
• Do we have the right incentives in place for business-critical roles?
• A robust CEO succession process and an effective operating
• model that attracts and retains the best talent for
• business-critical roles
Succession and incentives
CONTEXT
QUESTIONS THE BOARD SHOULD ASK ITSELF
TARGET OUTCOME
Risk
• Resilience requires prediction, accelerated recovery from
• disruptions, and adaptability to retool for a new world
• Resilience is multidimensional and driven by strategic, financial,
• operational, technological, and organizational factors
• Have we approved a Risk Appetite Statement as part of integrated planning process and ensured that management is accountable
• for the integrity and implementation?
• Have we ensured that adequate systems and processes are in place to effectively anticipate and manage risk?
• Have we reviewed the company’s risk position across dimensions (including rapidly evolving risks) and the remediation plan if a risk
• appetite threshold is breached?
• Have we approved any activities that present significant new risk?
• The ability to navigate through growing complexity and risks,
• including market disruptions
Risk
CONTEXT
QUESTIONS THE BOARD SHOULD ASK ITSELF
TARGET OUTCOME
Compliance
• Compliance is being reshaped by regulatory changes,
• increasing liability, pressure to derisk, changing role of CCO,
• organizational complexity, and a need for an effective, efficient,
• integrated compliance approach.
• Are we advising management to define the compliance strategy as an integrated part of business strategy?
• Are we regularly reviewing and approving key compliance policies and procedures?
• Are we ensuring our compliance program stays current in satisfying all legal and regulatory requirements?
• A robust compliance program to help the company manage
• risks and build resilience
Compliance
CONTEXT
QUESTIONS THE BOARD SHOULD ASK ITSELF
TARGET OUTCOME
Governance
• Depending on the type of organization, there are different
• considerations for Board governance, such as risk profile, size,
• composition, priorities, and nature of engagement
• Boards benefit from diversity, clear decision roles, and clear
• processes and structures
• Is the Board composition (competencies, diversity) consistent with long-term strategy?
• Have we established processes for effective onboarding and integration of new Board members?
• Have we established adequate Board structures, with necessary ad hoc committees, and clear decision roles among Board
• and management?
• Have we clearly defined individual accountability and mutual responsibilities, established an effective Board assessment feedback
• loop, and invested in building a strong culture to deliver top performance?
• Institute robust Board governance (composition, structure,
• processes, and culture) that allows the board to function
• effectively to create value for the company
Governance
CONTEXT
QUESTIONS THE BOARD SHOULD ASK ITSELF
TARGET OUTCOME
Engagement with management
• The engagement model with the CEO and management team
• is foundational to success of the Board, the CEO,
• and the company
• The need to refine delineation between Board and management
• and improve effectiveness of engagement is growing
• Have we clearly defined the Board’s role and operating methods in line with evolving business contexts?
• Have we sufficiently delineated the roles between the Board and management to ensure effective engagement?
• Have we worked together with management to create an effective corporate governance approach?
• Are we instituting a culture based on effective relationships to drive collaboration with the CEO and management?
• Building a CEO-Board engagement model that fosters effective
• collaboration and decision making to help create value
• for the company
Engagement with management
CONTEXT
QUESTIONS THE BOARD SHOULD ASK ITSELF
TARGET OUTCOME
Engagement with stakeholders
• Companies are shifting from a primary focus on shareholders to
• stakeholder capitalism and the highest performing companies
• embed stakeholder management within their operations
• Are we developing an understanding of the priorities and desired outcomes for relevant stakeholder groups?
• Are we prioritizing stakeholder groups based on potential impact and potential for alignment?
• Are we engaging with management to ensure that stakeholder interests are embedded in company’s strategic choices
• and operating model?
• Are we ensuring continuous monitoring of the company’s stakeholder management, for example through stakeholder
• outcome metrics?
• An effective stakeholder management strategy that allows
• addresses the interests and priorities of a wide range
• of stakeholders
Engagement with stakeholders
CONTEXT
QUESTIONS THE BOARD SHOULD ASK ITSELF
TARGET OUTCOME
Ethical Code of Conduct
• Ethical business practices support sustained value creation,
• especially when focused on sustainable growth, evolving
• stakeholder expectations, and rising reputational risk
• As the Custodian of the Ethical Code of Conduct, are we building a culture of integrity, ensuring that ethics are embedded in the
• company’s strategic choices and operating model?
• Are we engaging with management to create an incentive structure based on integrity performance indicators that track long-term
• value creation?
• Are we engaging with management to create robust governance mechanisms, keeping in mind the balance of interests of
• different stakeholders?
• A holistic Ethical Code of Conduct with a strong ethical
• infrastructure that balances the interests of
• multiple stakeholders
ETHICAL CODE OF CONDUCT
FUTURE-PROOF BOARD AGENDA
BOARD OPERATING MODEL
ETHICAL CODE OF CONDUCT
PURPOSE
FUTURE-PROOF BOARD AGENDA
BOARD OPERATING MODEL
ETHICAL CODE OF CONDUCT
Purpose
CONTEXT
ETHICAL CODE OF CONDUCT
BOARD OPERATING MODEL
BOARD OPERATING MODEL
BOARD OPERATING MODEL
FUTURE-BACK BOARD AGENDA
FUTURE-BACK BOARD AGENDA
FUTURE-BACK BOARD AGENDA
FUTURE-BACK BOARD AGENDA
FUTURE-BACK BOARD AGENDA
FUTURE-BACK BOARD AGENDA
FUTURE-BACK BOARD AGENDA