Re-inventing the board

When it comes to re-inventing the board, one of our sources of inspiration is Professor Ludo Van der Heyden, Founder of INSEAD’s Corporate Governance Center, and leader of the International Directors Programme at the time that Fennemiek participated in this thought-provoking course. At our book launch, we interviewed both him and Liselotte Engstam, a fellow INSEAD IDP-C and thought-leading Swedish Non-Executive Director. Together they do research on best practices for sustainability renewal in boards, using the sensing, pivoting, and aligning framework from their earlier research and article “Innovation and corporate renewal also disrupts board”. 

More and more investors are embracing a long-term Environmental, Social and Governance (ESG) perspective, expecting companies to commit to ESG standards. The pitfall of ESG metrics is that they are used for compliance. To have real impact, sustainability needs to be an integral part of your business strategy. Ultimately, it requires you to redesign the way you do business and redefine what growth means to you. We see sustainability as an opportunity for business innovation, and are inspired by Nordic companies like Maersk, a 118-year-old Danish global logistics company that is leading the way in sustainable business models for the shipping industry. They have pledged to launch the first carbon-neutral containership by 2023. 

At our book launch, Liselotte Engstam referred to her colleague Jim Hagemann Snabe, former Chair of the Board of Maersk, who said “The role of the board is changing. It needs to help executives formulate a compelling and relevant dream and then create the conditions that allow executives to experiment and not be constrained by too many details. The board’s focus has to shift towards the future rather than the past.” She told us about one of his best practices; putting the looking back part on the board agenda in the morning, and the future-oriented part in the afternoon, and then challenging the team with the remark ‘you decide when you want to have lunch’.

How much time does your board spend on discussing the future? Are you using sustainability as a source of innovation?