The Evolution of Board Membership
We’ve entered an era of dramatic change. Time is moving quickly, and the pace at which business evolves even quicker. The traditional board membership model is not exempt from this change. Board membership today is a much different experience than it was a decade ago. Today’s board members are faced with new priorities, challenges and opportunities.
Let’s explore a few of the ways that board membership, as we know it, is changing.
1. It’s not just about the money.
You could argue that business, overall, is no longer focused exclusively on the bottom line. In fact, a recent article by the Sloan Review refers to “the triple” bottom line, where board members are being forced to measure the firm’s success on its environmental and societal impact in addition to its financial performance. With the increase in new businesses focused on philanthropy and other social initiatives, there’s no getting around the fact that success in business is no longer limited to financial gain.
2. Board members are accountable for more.
Along with an increased focus on societal and environmental impact is an accountability for those things. The public and, in some cases, the government are now holding companies accountable for how they impact the community. New stakeholders are now at play. In several U.S. states, a company can become incorporated as a benefits corporation, which legally requires board members to consider other stakeholders. The result is that the board is able to prioritize other things in addition to financial performance, without looking at financial performance as the only measure of the company’s success.
3. Technology is making board membership more manageable.
It’s a good thing technology has evolved – because managing boards the old-fashioned way in such a fast-paced world is next to impossible. Board empowerment software now allows board members to communicate with fellow board members, employees and other stakeholders in real time through their mobile device. Easy access to information yields better and more timely decisions, making board membership much more manageable.
4. We’re operating in uncertain times.
There’s no getting around the fact that things are no longer “the way that they always were.” In this environment, leaders must challenge conventions and assumptions. What was true about business, even five years ago, may no longer apply. We’ve entered an age of new paradigms. Our models must be redefined.
What are your observations about the changing nature of board membership? Share your comments below.
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