Boards built for yesterday will not survive tomorrow

Kendall Langston CMInstD

Ask a New Zealand CEO how their board is performing and most of them, if they are honest, will give it a pass mark. Not a fail. Not a glowing endorsement. A pass.  

That was the broad message from 79 New Zealand CEOs and 19 international executives in a survey we ran earlier this year.  

Internationally, half of the CEOs said there was not much to fix at board level at all. The New Zealand picture was a little less settled, with strategic focus and board composition coming up the most often as the things CEOs would change. 

On the face of it, that is good news. Dig into it, though, and the question I keep coming back to is this: are New Zealand boards good enough for today, or built for what is coming? Because they are not the same thing. 

CEOs told us the defining challenges of the next decade are AI disruption, the energy and infrastructure transition, and a tighter, more volatile capital environment. Their international peers added geopolitical change to that list. None of those are problems you solve with the kind of governance that worked in 2015. 

The retiring accountant or lawyer who used to round out a CV with two or three board seats is, with respect, an artefact of a slower era. If you do not have a management role, or a foot in the door of one, you can become out of date inside 12 months. The technology is moving that fast. The customer is moving that fast. The capital markets are moving that fast. Sitting through a couple of Institute of Directors courses a year and reading the board pack the night before does not cut it. 

I say that as someone who values the IoD enormously. It does important work, but there is still a stubborn tail of static boards that admire the past more than they shape the future. CEOs feel it. They tell us about it. And in an environment where every quarter brings a new structural challenge, an admiring board is a slow-motion liability. 

What does a board built for the next decade actually look like? 

It looks like directors with insatiable curiosity. People who read widely, who come from diverse industries and backgrounds, and who have the courage to put up a counter view in a room of clever people and the humility to be convinced by them.

The best directors I work with walk into a meeting 60% or 75% decided on the big questions but leave room to have their minds changed.

It looks like a more mature appetite for risk. Growth is risky. Not growing is risky. Doing nothing is risky. A board’s job is not to eliminate risk; it is to have an honest mature conversation about which risks are worth taking, and to back the management team to execute and iterate. Risk-averse boards are quietly more dangerous than the ones that swing too hard. 

It looks like real diversity and I do not mean that as a tick-box. I mean diversity of operating experience, technology fluency, customer perspective and lived experience. Boards that lean too heavily on one professional discipline can end up litigating the same arguments in the same way, year after year. 

And it looks like a chair who prioritises the strategic agenda. The single biggest predictor of a board that adds value is a chair who drives the future-facing conversation rather than the minute book. When the chair sets that tone, everything around the table lifts. 

The CEOs we surveyed are not looking for a revolution in governance. They are looking for sharper, more robust conversations, the right people in the seats, and a board that will move alongside them, not behind them. 

That should be the bar. A pass mark is fine when the environment is forgiving. The next decade will not be. The boards that survive it will be the ones that stop admiring how the business got here and start governing for where it needs to go. 

Roll your sleeves up. Stay ahead of the management team. Get the right people around the table because the next 10 years will not reward boards that wait for permission.  

Kendall Langston CMInstD is co-founder and partner at strategy and implementation company Pivot & Pace. He advises CEOs and boards, and holds governance roles in New Zealand and Australia.