Remote work increasingly rakes out the abusive leaders, who want their employees to be online at all times. On the other hand there are the leaders who keep in touch with management and employees in order to be up to date with the challenges they face, says prof. Andrew Kakabadse, Envisia Business School’s Director of the Board.
How is Pandemic impacting governance and leadership? What do you think are the most significant changes?
Covid19 is considerably affecting governance and leadership thinking and practice. In terms of governance, the compliance side to oversight has been given greater attention with positive results. Board papers are more on time. Virtual meetings are rated by board members as more efficient. Relevant data reaches the board faster than before. However, the stewardship side of oversight is increasingly being neglected. Harassment/bullying is on the increase and board members have little or no knowledge of this in their organisation. Neglect of stewardship means reputational concerns increase and thus the organisation is made more vulnerable. Similarly, the leadership of the organisation is more directive due to fighting the loss of business and budget constraints. The motivation of staff has dipped. The balance is between increased efficiency versus the decline of effectiveness, namely, compliance versus stewardship. Leadership needs to be more innovative and dynamic responding to the needs of rapidly changing circumstances through more engaging, motivating and coaching staff and managers to be even more responsive to challenging circumstances.
What are the main abilities Board members should possess these days? In the area of soft skills, what competencies are necessary for Board Members?
It is vital for board members to find their balance between the contradictory demands of scrutiny versus engagement. The key difference of today from before is the increasing need to be familiar with digitalisation, such as big data, artificial intelligence (AI), machine learning and data analytics. The key abilities of board members remain much the same as before. It is imperative that board members display a mindset of scrutiny – i.e. the ability to work through considerable detail and emerge with a clear picture of what to do and why. Equally, a board member needs to sensitively engage with an array of stakeholders in order to realise full alignment of thinking and strategy so as to win the trust of people, internal and external to the organisation. However, these new technological skills and insights need to be understood in terms of the competitive advantage of the firm. For example, in the UK, 85 per cent of board members did not know or could not accurately state the competitive advantage of their firm. Insights into digitalisation by themselves do not make a big difference in terms of the value provided by each board member or the board. It is how these insights are used in terms of enhancing competitive advantage, that makes the difference. Research indicates that board members are out of touch with the reality of how the company functions and this has been made worse through Covid-19.
Is online the right forum to train leadership abilities?
Online is the worst possible vehicle to train and develop leadership abilities. Sitting in front of the screen, reading or responding to some sort of structured questionnaire does not enable leaders to appreciate how they as individuals are able to effectively work through dilemmas and difficult challenges. Equally gaining insights on how leaders impact others cannot be done virtually or online. Only specific programmes of education are well suited to online learning, such as accounting, finance, digital, etc. However, adaptability, sensitivity, quick thinking, reading the context and other leadership abilities demand face-to-face development and personal feedback.
How does leadership changes in the circumstances of remote work?
For those leaders that were already sensitive to stewardship, they have adopted their skill in circumstances of remote working. They continuously keep in touch with their managers and the staff as much by phone or other media to be aware of the challenges staff and managers face. However, research indicates that these are a minority of managers. Most are over directive, forcing their staff face up to the challenges from the market. Many require staff to be on call from six in the morning until ten in the evening. Sitting in front of the console is a necessity. Yet, in certain organisations needing to go to the washroom for only five minutes is penalised and individual asked “why did you leave your place”? Harassment, bullying, unpleasant behaviour is increasingly becoming a norm.
What are some advice for Board Members before accepting such appointment (i.e. as Board members)?
Before accepting any position, a prospective board member should undertake due diligence by meeting with the Chair, CEO, other board members and if a necessary small sample of senior and middle managers in order to determine the reality of how the board functions and their real contribution and value. Each board member is judged on the value they offer. But in certain circumstances realising such value can be difficult/impossible due to the dysfunctional dynamics within the board and the organisation. Board members should give as much attention to identifying why they should join a board as opposed to why not to join the board.
You have recently been in Romania, what are the challenges Board members are facing in Romania, what are the difficulties they must overcome?
Indeed, I had the opportunity to interact with Romanian chairs and members of the boards of directors, as well as, with top management representatives from various types of companies and industries, with the occasion of an international premiere: the launching in Romania of the post-graduate program Board Practice and Directorship by Henley Business School (University of Reading UK) in partnership with Envisia – Boards of Elite. After the residential week in Poiana Brasov, I met and discussed with boards from some of the most important companies in Romania.
In principle board members in Romania share the same concerns and challenges as their counterparts in Western Europe and the USA who sit on unitary boards. The only real difference is the number of state-owned companies in Romania and their particular dynamics, which will not be the case in the UK or the US. Individual European states such as France still have several state-owned enterprises so that the political nature of appointments parallels what is happening in Romania. The other factor that emerges from our research is that the role and influence of the Chair is less impactfully in Romania than in other countries. The governance responsibilities of the Chair are thus diminished, and in contrast the operational demands of the CEO predominate. This unwelcome balance leaves Romanian companies open of accusations of corruption and inappropriate governance practice. The Chair being of secondary influence leaves Romanian organisations, and by implication, the country, vulnerable to being reputationally suspect and not being trusted. I would like to end this interview in an optimistic note: the Romanian leaders have now the unique opportunity to join the exclusive and exquisite post-graduate qualification programme for practising board members, with academic accreditation recognised within the EU and USA, offered by ENVISIA in partnership with the triple-accredited Henley Business School.