The traditional model of board process and management could be on the edge of change because of the vast quantities of data now available to management teams for decision making, according to experts.
Their comments came as part of a special webinar on information technology and resilience hosted by Diligent, the boardroom applications provider, and Board Agenda.
Kieran Moynihan, managing partner at Board Excellence, a specialist board practice consultancy, said data analytics was changing the way boards work as the importance of regular meetings recede, in favour of constant updates.
“There’s a very interesting crossroads coming for a lot of boards,” said Moynihan, suggesting some boards were now becoming used to “continuous” management with a “a lot more ad hoc calls” to discuss data developments as they emerged.
Moynihan added that the sheer volume of data now available to many companies has made selection for sharing between executives and non-executives a sensitive topic.
He said data provision was “raising the bar” on analysis and leaving executive teams “nowhere to hide”, especially on topics such as employee retention and customer reaction.
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“For any non-executive director to intelligently, but robustly, challenge the executive team, they need to have the information to base their assessment on.
“We see executive reporting where it’s not quite ‘the truth, the whole truth and nothing but the truth’. It’s kind of nuanced and it’s very unclear at times.”
He added: “Executive teams have the analytics in front of them, but they can find it challenging to actually convey that and take the consequence of that far more rich insight into what’s happening.”
The sensitivity around data was acknowledged by fellow webinar panelist Nick Lindsay, director of governance and corporate services with the consultancy Elemental CoSec, a provider of company secretary services. He said non-executives would need to co-ordinate with management teams on the data they needed to make assessments if they wanted to use data as effectively as possible. Much filtering goes on before data reaches the board, he added.
“Setting the thresholds, the early warning indicator levels… allows NEDs to gain the comfort they need—and to be alerted of something going wrong as quickly as possible.”
In some cases, the data choices now available to boards now may be more of a hindrance, said Moynihan. “If anything, the executive and company secretary are finding it even harder to actually deliver to the board meaningful action, or guidance and interpretation to help make serious decisions.”
Information resilience is not only about data generation and provision. Henry Jiang, chief information security officer at Diligent, said IT teams would play a significant role in ensuring systems and technology infrastructure remain robust and move with changing business models.
But Jiang agreed IT teams must help filter information for the boardroom. “The challenge is not, ‘We don’t have enough data.’ We have too much data.” He said it was “supercritical” for IT teams to agree with boards and management the “themes” they want to convey in their data analysis and reporting.
Watch the full How Boards Build Resilience webinar.