Simultaneous discovery — or the sincerest form of flattery? Board Committee research
Two topics here — how to get Boards focused on science and technology for the long term, and how good ideas can get … um … discovered?
The difference a special Board committee can make
Innovation, transformation, and anything that requires a long-term investment with no guarantee of when it will pay off can be easy for management teams to ignore. After all, if I have a five-year timeframe until success can be reached and my personal tenure is, say, three years, what’s the point (for me personally). This is one of the core problems of managing organizations for the long term — personal incentives are often not aligned with what the organization requires for those time horizons.
But this should be where Boards of Directors come in. Boards are intended to represent the long-term best interest of the organization, with their role being to ensure the “long term sustainability” of the company.
In other words, the Board is supposed to look after the long-term viability of the enterprise, not just to rubber stamp whatever management wants to do. Unfortunately, most Boards are not set up to provide meaningful long-term direction. The three required standing committees — audit, governance and compensation — are not particularly strategic. Where, for instance, does strategy fall? Or transformation? Or paying attention to new digital technologies? Without any ill will, a typical Board member just won’t have the vantage point to question what management is doing (or often not doing) in these critical areas.
This is where my co-author and colleague Ryan McManus has made a significant discovery. By creating a special committee on the board to focus on science and technology, the topics of digital transformation, investment in the future and what the firm is doing about the key technological transformations of our time get focus. That focus on the future is now embedded in its governance structure. He uses the example of Nortech, a full service electronic manufacturing services provider, whose board he serves on.