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In 2017, Ridgeway Partners issued a report on ‘The Future of Boards‘ following an online survey conducted among executive and non-executive directors based in the U.K.
256 directors took part in the survey ~ 52 (20%) holding executive directorships, 204 (80%) holding non-executive directorships. Only 8% of the survey sample held both executive and non-executive directorships.
The survey focused on four key areas:
- Understanding Stakeholders ~ only 25% felt they had a ‘very accurate’ view of their customers
- Board Diversity ~ in ascending order in terms of most satisfied; experience outside the U.K. (50%), Gender (48%), Age (38%), Social/educational background (29%) Representation from the wider company (25%) and Ethnicity (13%)
- Risk and Governance ~ 53% of respondents had a specific risk committee on their boards. Of those boards with a risk committee, 57% of respondents felt risk management was addressed very well by their boards
- Technology ~ Whilst most felt their boards were engaging very or fairly well with cyber security and technology, only 10% felt they were engaging ‘very well’ with big data as a potential disrupter
The report goes on to state 66% felt the optimal length of term for a non-executive director was seven to nine years.
Interestingly, 65% felt full-time executives are able to devote the necessary time to a non-executive role.
This raises some interesting questions, not least who is best placed to advise the board on the potential disruption from emerging technologies, cyber security and big data?
The rise of Digital Advisors
As the insurance industry experiences ever more digital disruption, it is essential board members and executives alike receive the right digital advice.
It has become increasingly more difficult to attract and retain the right digital ‘talent’, whether that be at executive or board level. In response, some firms have engaged Digital Advisors who sit outside of the normal corporate structure and provide strategic advice and insight on an advisory basis.
These digital advisors can hail from a number of different areas, depending on the specific objectives of the firm:
- Consulting firms ~ who provide advice on corporate and innovation strategies
- Educators ~ such as Business Schools, who provide ad hoc advice, consulting and Executive Education
- Entrepreneurs ~ individuals who have succeeded (and failed) to launch and scale enterprises
- Actors from the ecosystem ~ these could be innovation labs, incubators, technology networks, investors (angel, early-stage and growth)
As the pace and complexity of technological disruption increases, executives and board members alike will need to build a strong sounding board.
It is likely this will comprise a mixture of advisors who bring an entrepreneurial mindset and unique perspectives, derived from years of experience across a number of different sectors and industries.
As firms attempt to drive insights from vast amounts of unstructured data, understand the complexity of direct and indirect network effects, business model innovation and the evolving demands of customers, the need for Digital Advisors will only increase.
Reciproco provides knowledge integration across risk, solvency and strategy, including digital transformation, leading complex and unique projects in regulated sectors. Helping senior executives and management teams focus on strategic challenges to create a competitive advantage.
Darren Munday is the founder and Managing Director of Reciproco. An experienced executive with over 20 years’ global experience with multinational companies, including Chief Risk Officer reporting to the Board.
Darren is an Honorary Visiting Fellow of the Digital Leadership Research Centre, Cass Business School where he also holds an Executive MBA. Darren is a Certified Fellow of the Institute of Risk Management (CFIRM) and Chartered Insurance Risk Manager (ACII) of the Chartered Insurance Institute.
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