GC leadership: Boardroom insights part 1
In the first of our five-part series, we explore the biggest board challenges, priorities, and areas where general counsel and in-house legal teams can contribute to their organisations' long-term growth.
Organisations are operating in a context of continuous change, contending with social, economic, environmental, and political challenges which are stress-testing business strategy.
In this unpredictable environment boards must keep adapting; solely focusing on management fundamentals could leave businesses ill-equipped to respond to more interference. Securing ongoing sustainable growth and economic progress requires a level of transformational action.
- More than one in ten (13%) board leaders believe their organisation will need to completely transform its business model to stay relevant.
- But around two-thirds (64%) are concerned that boards are relying on familiar ways of operating rather than innovating their practices.
Top priorities for boards today*
1. Growth
2. Revenue and cash flow management
3. Long-term strategic planning
4. Boosting productivity
5. Employee wellbeing and mental health
6. Pivoting our business model
7. Recruiting and retaining talent
8. Equality, diversity and inclusion
9. Meeting ESG regulations
10. Reskilling/upskilling – L&D
*as ranked in our opinion research amongst 550 UK board members or equivalent across six sectors, in Spring 2023, under the ethical research guidelines set by both the MRS (Market Research Society) and ESOMAR.
"These priorities are the basics of managing a business well and it makes sense that they are viewed as critical, given the current economy. Focusing on the here and now is important but it means we're seeing less transformational activity which can result in a feeling that we're treading water. It's important, in the long term, that we don't lose sight of the importance of transformation."
Jennifer Tippin
Group Chief People and Transformation Officer, NatWest
Repositioning to play the long-term game
An overarching theme that came from our C-suite interviews is that to build the longevity of their business and to have real impact on the world around them, boards may want to reposition their focus. Rather than planning their future for the next three to five years, the outlook could be 10, 12 – even 15 – years ahead.
But this timespan falls beyond the typical lifecycle of a board. When there is already a cocktail of challenges to be rapidly responding to – and an urgent need to increase organisational agility – what incentive is there for leadership to prioritise change that will only bear fruit long after their tenure?
If you assess the priorities of your board – not just what they would like to prioritise, but where they are actively investing time, resources and money – are they the problems of yesterday, today, and tomorrow? Or are they about fortifying the business for the next iteration of challenges? Take your workforce, for example. Is there meaningful investment in recruitment, retention, upskilling and reskilling? Or are the day-to-day demands of hybrid working still causing headaches? When it comes to digitisation, is there an earnest push to integrate new tools, like AI or automation? Or is your business entrenched in legacy infrastructure?
At a glance, it may seem that long-term planning means devising an enduring strategy and sticking to it rigidly. In practice having a clear-but-distant goal can create room for fluidity, creativity and innovation along the way. This is where in-house lawyers and general counsel can help business leaders steer the course, forecasting and analysing long-term risks against the more apparent short-term ones, helping boards better understand their position and prospects.
With this in mind, what tools can help leaders reframe the focus and transition to more long-term impact over short-term commitments?
Investing in sources of long-term sustainable growth
Boards will benefit from having a clear idea of the trajectory of their markets, competitors and consumers, identifying the megatrends that can profitably align with their business over time. Components of ESG are clear contenders for this; setting long-term goals and initiating clearly defined actions can help organisations play a part in shaping the future and embark on their journey to reach it.
Real-time data and scenario planning
Experimentation and organisational intelligence are critical factors in having greater operational agility. A key part of this is having access to real-time data and using them to predict possible futures and then planning responses and actions as a result. General counsel can apply this to legal operations, using data to spot trends in particular areas and feeding those trends back into strategic decision-making, streamlining processes and spotting commercial openings or risks.
The stakeholder pool for organisations is becoming increasingly complex, and as your business affects diverse employees, suppliers, and communities, 'company performance' becomes something more than just profit. Understanding what success looks like to different cohorts – and how your business currently stacks up – can help you close weak spots that may have become a vulnerability in the long term. The role of the general counsel typically reaches across the whole organisation, enabling them to give a broad perspective and effectively navigate internal pathways to solutions and opportunities.
In turbulent times, employees are increasingly looking to their employers for support and stability. Investing in the 'S' of 'ESG' – that is, the social responsibility of your organisation – is a growing aspect of retention. People are a fundamental part of an organisation and often central to growth. This extends beyond the walls of a workplace – the human impact of supply chains at a micro and macro level is an intrinsic component to an organisation's overall sustainability, and stakeholders will expect boards to realise and manage the risks associated with every link in their network.
When asked specifically about the top areas where businesses believe they need more support from their senior legal team, board executives point to diversity, equity, inclusion, and wellbeing, saying that general counsel can play a critical role in advising businesses on how to shape their social impact.
So far, in the transition to net zero, organisations have largely been focused on establishing methods for measuring their carbon emissions and devising appropriate targets for reduction. While strategy is important, stakeholders are also looking for evidence of wider business impact. Leaders and boards can drive this by making conscious choices in every aspect of operations and leaning on the due diligence and risk-assessment expertise of their general counsel and in-house lawyers. They can identify vulnerabilities or support decision-making in areas where legislation or reporting requirements are not yet in place.
As a board, it's tempting to protect operations and minimise risk by setting achievable targets and reaching for low-hanging fruit when it comes to environmental and social responsibility. But boards can occupy a more meaningful space than this if leaders look to champion significant change. If business leaders set their sights on this well outside the walls of their company, they have the opportunity to leave the global community a better place than they found it.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
