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Corporate Governance in the Digital Age

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This webinar, hosted by Directors & Boards, provided an overview of the book, "Governance in the Digital Age: A Guide for the Modern Corporate Board Director" featuring Dottie Schindlinger, co-author and Vice President of Thought Leadership of Diligent Corporation. The session included key take-aways from the book which focuses on modern governance practices, including specific examples of how corporate boards and directors are evolving to meet the challenges of the increasing speed of information and fast pace of digital disruption.

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Corporate Governance in the Digital Age

  1. 1. ©2019 Diligent. All rights reserved. Diligent Confidential. Governance in the Digital Age Dottie Schindlinger, VP of Thought Leadership, Diligent David Shaw, Editor, Directors & Boards April 18, 2019 Directors & Boards Webinar
  2. 2. Dottie Schindlinger Vice President, Thought Leadership Diligent Corporation Your Hosts For more information, visit diligent.com/governance-in-the-digital-age Contact: thoughtleaders@diligent.com David Shaw Editor and Publishing Director Directors & Boards
  3. 3. Themes: • Impact of digital technology on board governance & future implications • Features global research and interviews with directors in six countries • Insights from this work could apply across sectors, industries, regions New Book John Wiley & Sons Publishers
  4. 4. Central Theme: What impact is technology having on board governance? (and why hasn’t it been faster/bigger/more obvious?)
  5. 5. Guiding Questions • What practices are boards adopting in response to the fast pace of change? • What are the biggest “gaps” for boards to close in terms of their technology savvy? • Are there different “behavioral profiles” for the ways boards respond to tech? • What are the implications for the future?
  6. 6. Context: Average Age of Directors is 63 During the “dot.com” era of the late 1990s, most board members were already in their mid-forties. 38% 62% Under 60 Age 60+ SOURCES: KPMG: home.kpmg.com/jm/en/home/insights/2017 /03/age-diversity-within-boards-of- directors-of-the-s-p-500-companie.html PwC Annual Corporate Governance Survey, 2018: https://www.pwc.com/us/en/services/gover nance-insights-center/library/annual- corporate-directors-survey.html Spencer Stuart Annual Board Index, 2018: https://www.spencerstuart.com/research- and-insight/ssbi-2018
  7. 7. According to research by Deloitte: • Only 17.4% of corporate boards have directors with technology expertise • For the S&P 500, the percentage of boards with tech directors is higher, at 28.5% • The highest performing S&P 500 companies are more likely to have tech directors – at 31.3% • Source: https://www2.deloitte.com/insights/us/en/focus/cio-insider-business-insights/bridging- boardroom-technology-gap.html Technology Expertise in the Boardroom
  8. 8. I don’t know that much about cyber, but I do think that’s the number one problem with mankind.” -- Warren Buffett in 2017
  9. 9. • Foster a boardroom culture of respectful disagreement & curiosity • Expose board members to new ideas (outside the boardroom) • Expand board diversity - backgrounds, skillsets, leadership styles • Remember that trust is essential to a collaborative mindset Boardroom Practices: Value Creation
  10. 10. “Most of my peers working in technology are not used to the culture in the boardroom, which is overwhelmingly white, male, and ‘grey.’ In my experience speaking with board members who are age 65-plus, these directors are very interested in what you have to say and are amazed at what’s happening in technology, but then they don’t move forward because of that cultural fit…. People love the familiar.” -- Anastassia Lauterbach, PhD, Board Director for Dun & Bradstreet, Wirecard, Censhare, and author of The Artificial Intelligence Imperative: A Practical Roadmap for Business. What Directors Told Us…
  11. 11. Boardroom Practices: Building Resilience Update board infrastructure • Measure the right things • Use online tools • Encourage self-education Double-down on performance • Rethink meetings • Empower decision- making year-round Diversify board composition • Use tools to find gaps • Explore new talent sources • Focus on diversity’s advantages
  12. 12. “Directors can’t be passive receptacles of what their companies share. They need to build their own informed frameworks. And if they’re going to be personally accountable, they need to stay contemporary.” -- Betsy Atkins, CEO and Founder of Baja Corporation, Board Director for Cognizant, Wynn Resorts, SL Green Realty, Schneider Electric, and Volvo Cars What Directors Told Us…
  13. 13. Board Behavioral Profiles How different boards approach governing in the Digital Age… FOUNDATIONAL BOARD STRUCTURAL BOARD CATALYST BOARD FUTURISTIC BOARD Description & Focus • Meeting basic requirements & driving results • Focus: growth • Board serves as “watchdog.” • Focus: governance & oversight • Board drives results in a “turn-around” capacity. • Focus: transformation • Board is a strategic resource for long-term performance • Focus: legacy Common Traits • Board is small (<7 members) • Informal processes • Board grows in size • More independent directors • Processes formalized • Governance staffing • Directors drive change • Separate CEO & Board Chair • Focus on outcomes drives adoption of new processes • Independent directors • Succession & board resilience are top of mind • Innovative board processes Board Meetings & Processes • Efficient, but informal • Few meetings & committees • Minimal documentation • No board support staff • Meetings focus on reporting and discussion of results • Extensive board materials • processes are better defined • Focus is on discussion of adaptation, positive change • Increased board education & committee engagement • Directors drive the agenda • Meetings are strategic discussions • Director create broad peer networks
  14. 14. ©2019 Diligent. All rights reserved. Diligent Confidential. Discussion
  15. 15. Dottie Schindlinger Vice President, Thought Leadership Diligent Corporation Thank you! For more information, visit diligent.com/governance-in-the-digital-age Contact: thoughtleaders@diligent.com David Shaw Editor and Publishing Director Directors & Boards
  16. 16. ©2019 Diligent. All rights reserved. Diligent Confidential. Thank you For more information, visit diligent.com/governance-in-the-digital-age

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