On November 28, 2024, Boards Impact Forum and Climate Governance Initiative, in collaboration with the INSEAD Corporate Governance Centre hosted the webinar titled “Strategic Governance for a Disrupted World – Board Pulse 2024.”
In this webinar board leaders and experts engaged in a rich dialogue about the evolving role of boards in addressing sustainability while navigating an increasingly complex business environment. The discussion revealed how AI and geopolitical challenges are reshaping corporate governance, requiring boards to develop new competencies and approaches.
This session delved into key findings from a joint research study, conducted by INSEAD Corporate Governance Centre, BCG, and Heidrick & Struggles with the contribution of the board directors’ communities from INSEAD Directors Network, Boards Impact Forum and the Climate Governance Initiative.
Presenters and Panellists:
- Claire Skinner, Global Managing Partner Heidrick & Struggles Consulting
- Ron Soonieus, BCG & INSEAD https://www.insead.edu/bio/ron-soonieus
- Susanna Campbell, Board Professional, Investor and Entrepreneur. Chair at Syre and NOD, Board Director at H2 Green Steel, Northvolt, Kinnevik, Indutrade, Estrid. Background as CEO of the Investment Company Ratos and Consultant at McKinsey.
- Johan Raslan, independent director and audit committee chairman of Sime Darby Property Berhad, board member of the Institute of Corporate Directors Malaysia and the Malaysian Securities Commission’s Audit Oversight Board. He is a Council member of Climate Governance Malaysia, member of the Institute of Chartered Accountants in England and Wales (ICAEW) and a former Executive Chairman of PwC Malaysia. Most of his executive career was spent in public accounting and consulting: for 10 years in London and 20 years in Kuala Lumpur and the ASEAN region.
- Dr Patricia Rodrigues Jenner is a Porfolio NED and purposeful leader with two decades of institutional investment experience across real assets, including at Macquarie. She has a breadth of sustainability experience, including as co-founder of the UK Government’s Green Investment Bank in 2011. Patricia is co-founder of InfraNEDs (www.infraneds.org) and Leading Woman of Influence in Private Markets. She holds an Engineering Ph.D. (Cambridge).
- Sonia Tatar: https://www.insead.edu/bio/sonia-tatar
- Liselottte Engstam: Chair of the Boards Impact Forum, Chair and NED at listed and private companies https://www.insead.edu/bio/liselotte-engstam
Moderation by NED and Liselotte Engstam, chair of Boards Impact Forum and professional NED and chair and Fernanda Torre, Operations Director Boards Impact Forum.
Table of Contents
Key Findings from Latest Research
According to the latest INSEAD and BCG study on board effectiveness, boards are making significant strides in sustainability integration, though the journey is far from complete. The research unveiled a striking statistic: 80% of board directors now acknowledge their responsibility to address broader environmental and societal concerns. However, this recognition comes with its own set of challenges, as boards grapple with balancing these responsibilities against traditional business objectives.
The study also highlighted an emerging confidence gap in boards’ ability to address AI and geopolitical risks effectively. While many boards have established frameworks for sustainability governance, they are still developing their approaches to these newer challenges, indicating a need for continued evolution in board competencies and structures.
Sustainability as a Business Opportunity
One of the most compelling themes emerging from the discussion was the paradigm shift in how boards view sustainability. Rather than seeing it merely as a compliance requirement or risk management issue, leading boards are recognizing it as a fundamental driver of business innovation and growth. Susanna Campbell, whose board portfolio includes pioneering companies like Northvolt and H2 Green Steel, made a powerful case for this perspective, emphasizing that climate action represents “one of the biggest investment and business opportunities of our lifetime.”
This shift in mindset is driving concrete changes in how boards approach sustainability:
– Board directors are increasingly pushing for sustainability integration into core business strategy, moving away from the traditional approach of treating it as a separate initiative or compliance matter. This integration extends to capital allocation decisions, innovation strategies, and market positioning.
– The discussion highlighted how companies that fail to embrace sustainability risk becoming obsolete in their markets, with examples from various sectors showing how sustainable practices are becoming a key differentiator in customer choice and investor preference.
– A particularly interesting development is how leading boards are actively fostering collaboration with startups to drive innovation in sustainability. This approach helps established companies stay agile while accessing cutting-edge sustainable technologies and business models.
The AI Challenge and Board Readiness
The discussion revealed a gap in board readiness for AI transformation, with only about 36% of directors feeling confident in their understanding of AI’s implications for their businesses. Patricia Rodrigues, drawing from her extensive experience as a non-executive director in insurance and infrastructure sectors, emphasized that AI is not merely another technological trend but a revolutionary force that will fundamentally reshape business operations and competitive landscapes.
AI is here to stay and revolutionize our business. It’s crucial for boards to get up to speed quickly to avoid lagging behind.
The dialogue highlighted how boards need to move beyond surface-level discussions about AI to develop deeper understanding of its strategic implications and governance requirements.
Emerging Markets Perspective
The global nature of sustainability challenges was particularly evident in insights shared by Johan Rasian from his experience in Malaysia and Southeast Asia. His perspective highlighted how sustainability priorities and approaches differ across markets, yet are increasingly interconnected through global supply chains and stakeholder expectations. A new BCG study focusing on board effectiveness in emerging markets provides valuable insights into these regional dynamics.
The discussion revealed how emerging market boards are often dealing with unique challenges, including the need to balance rapid economic development with sustainable practices, while also responding to evolving global standards and expectations.
Key Recommendations for Boards
In this context, several key recommendations emerged that can help boards navigate today’s complex challenges:
– Integration over Isolation: The most successful boards are those that avoid treating sustainability, AI, and geopolitical challenges as siloed issues. Instead, they’re developing integrated approaches that recognize the interconnected nature of these challenges and their impact on business strategy.
– Enhanced Board Involvement: There’s a clear trend toward more active board engagement in strategy development. Rather than simply reviewing management proposals, boards are increasingly co-creating strategy with management teams, bringing their diverse perspectives and experiences to bear on critical decisions.
– Concrete Impact Assessment: Leading boards are developing sophisticated approaches to link sustainability initiatives to tangible business metrics and bottom-line impact. This includes scenario planning and integration of sustainability metrics into strategic planning processes.
– Cultural Transformation: The complexity of today’s challenges requires a board culture that embraces humility, courage, and continuous learning. This cultural shift is essential for boards to effectively navigate uncertainty and lead their organizations through transformation.
Looking Ahead – Conclusion and Next Steps
As highlighted in INSEAD’s latest findings, while boards are making progress on sustainability integration, they must continue to evolve their approaches to address emerging challenges. The increasing complexity of the business environment, coupled with rising stakeholder expectations, requires boards to demonstrate both courage and humility in their leadership. This includes being willing to challenge traditional assumptions while acknowledging the uncertainties inherent in today’s rapidly changing business landscape.
The discussion concluded with a clear message: successful boards will be those that can effectively balance long-term sustainability goals with immediate business priorities while navigating the complexities of technological disruption and geopolitical uncertainty. This requires not just new skills and knowledge, but a fundamental shift in how boards approach their role in corporate governance and value creation.
About Boards Impact Forum and the blogpost
Event arranged by Boards Impact Forum and Climate Governance Initiative, in collaboration with the INSEAD Corporate Governance Centre
This blogpost is also shared at the blog of of Digoshen, www.digoshen.com.
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