Board Perspectives
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HOW ORGANISATIONS CAN thrive IN AN UNPREDICTABLE WORLD - EVEN BLACK SWANS
How does a company navigate a corporate environment as uncertain as the one we’re in today? A well-composed, diverse board is key, insists Chairman of SATS Ltd and Public Service Star recipient, Euleen Goh.
On every metric, Euleen Goh is as much a trailblazer for her storied corporate career as for her commitment to public service.
An accountant qualified in banking and taxation, Goh’s appointment in 1999 as the first Singaporean to head Standard Chartered Bank’s global sales, corporate and institutional banking businesses – 500 offices in 50 countries – was merely the precursor to an incredible career arc. She went on to become the first Asian to sit on the board of Shell plc, the first woman appointed to the board of Singapore Airlines, and is now chair of SATS Ltd and the Singapore Institute of Management’s governing board.
In addition to the high-profile appointments, she also parlayed her accomplishments to worthy causes. She chairs DBS Foundation, which champions social entrepreneurship and community impact, and has served on the boards of Singapore Chinese Girls’ School (her alma mater) and NorthLight School. Significantly, she is also a member of the Public Service Commission and the Council for Board Diversity, a decidedly organic appointment given her long experience with board leadership and corporate governance.
Companies today must operate in what she describes as “a hugely volatile, uncertain, complex and ambiguous” environment. Which is why she prescribes an agile strategic pathway alongside robust execution, and a carefully nurtured ecosystem of culture and people. These, she insists, are three important attributes of an effective board, without which a company would struggle to prosper and grow.
In this context, diversity is key for it “brings about a very wide-ranging radar screen so that there is breadth in insights into not just the markets that the company operates in, but also insights to geographies, tastes, interests and consumer spending patterns”, she shares in this frank and far-ranging interview.
What would you say are the elements of good governance in the context of a modern company?
The first is purpose. What does a company stand for? What is the platform on which the company operates? The second is clarity. You need clarity of the policies that affect you. What are the regulations? What are the shareholder and stakeholder interests? How are you communicating? Is your communication timely and comprehensive? Another element is corporate culture. Culture is the glue that brings the board and company together. It has to permeate the leadership all the way down to every single member of the company. Why do we exist as a company? It’s quite difficult to embed culture and this is where leadership comes in. They need to walk the talk in setting culture.
What, then, is the key ingredient to creating a well-functioning board?
That’s the ten-million-dollar question that all board chairs ask themselves. I think such a board needs to be dynamic, deliberative and decisive. It needs to have members who are frank, trusting and respectful, so that everyone speaks up. It has to have members with different experiences, perspectives and insights. And it’s got to be ready to make some courageous decisions. Sometimes, these are made with speed, and often with conviction.
So, what makes a good board director?
I’m not sure there is a formula, but I know in order to contribute meaningfully to board discussions, I need to have as broad a view and as diverse a perspective as possible. So, I read widely and I listen deeply. I’m always interested in what people have to say. I learn. It doesn’t matter who I’m talking to, I’m always learning because I’m asking questions.
Speaking of diverse perspectives, what are the less obvious benefits of a diverse board?
Diversity means having different perspectives and this brings about a balanced assessment of risk return. Too often, boards only consider returns without thinking about the risks, or think about risks without considering the returns. A diverse board is also better placed to anticipate Black Swan events.
What, then, does a diverse board look like to you?
Gender diversity is the easiest to identify. Very often, board chairs tap the shoulders of people they already know: People who go to the same golf clubs, read the same books, go to the same restaurants. That could give rise to blind spots. And this is where women may be disadvantaged because women aren’t all out there playing golf or drinking. They have other responsibilities to meet. And so, women need to be encouraged to network more.
Another marker is age. Generally, a board member has to be experienced. That said, we shouldn’t set aside first time directors. We need to think about how we bring new directors on board to add to the gene pool of experienced directors.
This is where the Council for Board Diversity plays a critical role in boosting the understanding of the value of diversity; by providing channels for boards to increase their diversity. Basically, by being a little bit of a matchmaker.
Now, you have set the foundations of good governance, and you have a diverse board. How do you translate these touchstones into an effective board?
You need board members to be candid. To put forward their insights and perspectives, even when they’re controversial. The chairman facilitate this environment by creating an open platform where everyone can speak up and feel that their opinions are heard. Where they can contribute and learn from each other. For a good chairman, no question is a stupid question. A good chairman steers the discussion such that every question is substantially considered. This is how you build trust.
Boards need to be battle ready to cope with the speed of change. And that means building agility and resilience into the company’s business model. Black Swan events like Covid-19 fundamentally changed perspectives on businesses and employees and their working conditions. Do we have hybrid work arrangements, for example? Do we restructure salaries? Do we need to rethink our corporate culture? These are all talent retention factors.
Any last words of advice?
Every business needs to ask itself, “So, how is the world going to change, and what will that change mean to my business?” I should add that I do not have all the answers and there are many noteworthy Chairpersons of Boards who operate effectively and whom we can all learn from. For me, the key is to keep learning.
Diversity on boards approaching a momentous milestone