Demands on organisations and their leaders are shifting what it means to be an effective board. The constant chop and change everywhere in modern life—from politics to technology change and AI, to the challenges of dealing with climate change—are all putting pressure on boards.
Even traditional stakeholders such as customers are changing as they want to express their values in what they buy, and ask businesses to not only produce a product efficiently, but also to stand for an ideal. Sometimes different stakeholders even want contradictory things, with different customer groups wanting organisations to take differing stances on diversity, equity and inclusion (DEI).
The fast-changing landscape in which organisations exist requires new ways of working, not only for the executive, but also for the board itself. Necessity has become the mother of invention. Take the example of the coronavirus pandemic. Ever since the restrictions of Covid, boards have had to learn to operate in a hybrid world where meetings are not always in person. Covid required boards to operate differently, and boards responded, because they had to do so.
Changing with the times
Beyond experimentation with how they meet, what are the other changes required to thrive in the landscape of today? Most importantly, boards are more diverse than ever before, in part because they have responded to the need to pivot quickly in the face of change that is hard to predict.
The best boards have also spent increasing time focused on values and culture, knowing that processes and procedures change, but core values are timeless. Even in the face of changing political winds, boards have embraced greater diversity of backgrounds because they have to do so to survive.
All these changes are disruptive and have the potential to hinder effective governance by consuming a great deal of director time and making it hard for them to identify meaningful change. Such changes, however, also have the hallmarks of innovation.
The boardroom of 2025 bears little resemblance to the one of 2000 (for example, the people around the table, the content of much of the discussion, and the technology supporting the board are all significantly different) and will no doubt be significantly different to the one of 2050.
My own research indicates how this is likely to change. Because we’re living in a world that is becoming less and less predictable, less and less certain, we are likely to continue to engage a different type of director. Not only will those directors likely be ever more diverse, my research also suggests that we will have more directors who are high on agreeableness.
Is it non-negotiable?
When companies need to test, experiment and constantly iterate processes and products, it may not be helpful to take an approach based on the belief that there’s a right or wrong answer. Management saying, “This is how it is and I don’t care whether you like it or not” – which is how many experts proceed – is not conducive to success on many fronts. You can still go to the expert and try to ascertain helpful facts and information, but in a scenario where there’s no single right answer, you have to add your judgment on top of that.
This is where agreeableness comes in, because if you’re high on the agreeableness scale, you will tend naturally to want to test your opinion out with other people: It compels you to want to talk to lots of people and ask, ‘Does this make sense? Does that make sense?’ And, if lots of people think it does make sense, it’s more likely to be a solution that will work for most people, almost by definition.
By contrast, people who are low on agreeableness are likely to be increasingly unproductive in an uncertain world. In times when running a business or managing a team was more straightforward, a more categorical ‘it’s-my-way-or-the-highway’ approach might have fared better for accomplishing certain tasks.
But what people who deploy that closed right answer/wrong answer approach forget is that the distinction between fact and judgment becomes blurred. They like to make judgments that are yes or no, right or wrong. They’re just not able to get out of that hard-judgment mode and beyond focusing on what’s literally true. That means their judgment is often not very well-informed, which means it is not helpful, at best.
Randall Peterson is professor of organisational behaviour and academic director of London Business School Leadership Institute