OWP liVe REPORT

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The proof is in the profit: How your board canmake a successful shift to values-based governance

M A N A G E M E N T

Integrity is the defining factor for achieving great governance, says Professor of Governance Didier Cossin. In a world deeply changed by COVID-19, people are losing confidence in their leaders. But this lack of trust dates to before the pandemic began, after the 2008 economic crisis and scandals that rocked the business and non-profit world – from FIFA to Adecco to Volkswagen and more. Didier Cossin, IMD Professor of Governance and Founder and Director of the IMD Global Board Center, believes that by bringing back integrity as a primary value, organizations can rebuild trust, increase revenues and play their part in transforming society for the better. “The most important part of this transformation must come directly from the decision-making heart of a company – its board,” said Professor Cossin.

important aspect of proper governance is successful board work, said Cossin. Different boards may have different strategies but, by performing these crucial actions, your board can achieve great governance and, ultimately, even greater organizational success. As the central organ of governance in an organization, the board should set both objectives and overall tone. “Where and how does the board play its role?” he asked. “Ideally, it is not just a supervisor, but a co-creator.” There should be no tug-of-war between the board and the CEO or executive leaders. Boards should clarify which possible interpretation of strategy they want to focus on and, if several matter, which one should dominate. These decisions may change as the situation evolves: Some strategies may be more essential in the medium-term and 1 Examine the role of your board

others in the long-term.

Prepare contingency plans

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Cossin has been teaching boards – for decades before the current crisis – that they must prepare in advance for possible disruptions. “Preparation is everything,” he said. “But surprisingly, more than half of companies do not have proper crisis management strategies in place.” Boards are facing major shifts in areas from technology to geopolitics, and from M&As and consolidation to supply chains. “Your board may have a blind spot,” Cossin explained. “It could be based on historic biases or decision-making biases, but you must work these out.” By recognizing the weak areas on your board, you can take proactive steps to build up knowledge and experience to 3 Admit where there are gaps

DIDIER COSSIN Professor of Governance

Five steps for a successful board

What makes great governance today? One