Boardroom Challenges and Priorities for 2022
Boardroom challenges and priorities for 2022
The disruption and challenges of the last two years have forced organisations of all sizes and industries to make rapid change.
The Covid-19 crisis has accelerated operational changes and, in some ways, has created a stronger collaboration between directors and management. Such robust collaboration is key to a board’s success.
The unparalleled disruption has also forced boards to implement new structures and processes. They have become more flexible in their agenda setting, more focused on strategy and corporate resilience.
More flexibility in agenda setting
As we move into 2022, it is not entirely clear which of the many changes boards have made during the last two years will maintain momentum. Though it is widely agreed that boards will need to continue to take a more flexible approach to agenda setting.
Such flexibility will help boards stay on top of emerging issues and topics, new risks, and implement strategic alternatives, if the need arises.
The rise of risk appetite
Risk appetite, namely the level of risk an organisation is prepared to accept in pursuit of its objective before action is deemed necessary to reduce the risk, is poised to be a key focus of boards in 2022.
According to a survey by Gartner, fifty-seven percent of Boards of Directors (BoDs) have increased, or expect to increase, their risk appetite heading into 2022.
The research found that among the top risks to business performance is economic uncertainty, disruptive business models from competitors, and cost inflation due to supply shortages.
Digital technology remains a priority
The same survey found that digital technology remains a leading priority for many BoDs. Not only are boards focusing on greater levels of technology integration, but they are also creating more enduring and systemic digital economic architecture. The survey found that 64% of BoDs have attempted to alter their enterprise economic structure to a more digital economic architecture.
Hybrid models will gain momentum
One of the most prevalent changes the pandemic brought to corporate life was transiting meetings from physical to virtual. The multiple benefits virtual board meeting makes it clear that they are here to stay.
That said, in-person meetings can be deemed more productive and better focused on strategy and key topics. The pros and cons of both styles of meetings is paving the way for the rise of a hybrid style of board meeting, with a mix of in-person and virtual meetings as the ‘ideal’ compromise.
One of the key challenges the pandemic created for organisations is related to talent management. Numerous challenges have reared their head in relation to talent, including hiring freezes and layoffs, salary freezes, cancelled bonuses, pay reductions, teleworking, increased employee stress and burnout, and more.
In light of the talent management challenges of the current climate, boards are having to play a major role to secure the best talent in a highly disrupted world.
Creating a comprehensive talent plan that’s coupled with business strategy is something boards will need to prioritise in 2022.
Greater focus on boardroom equality
Boardrooms still have a significant gender gap. The number of women on boards is rising across the globe, but research shows the rate of increase has slowed for three of the past four years.
The focus on promoting gender equality in the boardroom will continue into 2022 so that the push to more fairly represented women in UK boardrooms makes better progress.