To transform the company’s success, India needs future-ready board’s: Survey
Indian enterprises are under unprecedented pressure to improve their boardrooms due to the requirement to appoint and integrate new directors by 2024, as well as the challenges posed by geopolitical uncertainties and technological improvements.
To transform the company’s success, the Indian organization needs future-ready board members in light of the Companies Act’s ten-year anniversary in 2013.
The secret to competitiveness in business and the prerequisite for a successful enterprise is transformation. Who benefits from the transformation—the board members, the staff, or amazement? According to research, Indian companies that want to successfully transition require boards that are prepared for the future.
Indian enterprises are under unprecedented pressure to improve their boardrooms due to the requirement to appoint and integrate new directors by 2024, as well as the challenges posed by geopolitical uncertainties and technological improvements. In light of the Companies Act’s ten-year anniversary in 2013, enterprises are grappling with the necessity for a boardroom refresh. The 2024 Heidrick & Struggles India CEO and Board Survey provides important insights.
In order to ascertain the business priorities of existing managing directors, board chairmen, and subcommittee chairs in India for 2024, as well as their opinions regarding board refreshments, the poll examined their responses. Within the next 12 to 18 months, three out of five respondents (59%) plan to hire a new director or conduct a board refresh. One in two (48%) want to add new skill sets to their boards, and nearly three-quarters (74%) say they are updating because a director has retired.
In front of the board refresh, “Indian companies are gearing up for a significant change,” Heidrick & Struggles India Partner-in-Charge Puneet Pratap Singh stated. There will be a significant change in the function of the board, where it will be essential to successfully manage upheaval and bring in fresh viewpoints. Our experience has shown that one of the most important things board chairs should concentrate on in order to be prepared for the future is the makeup of the board, and the refresh presents an opportunity to address this. It’s a strategic process that requires consideration of the company’s overall strategy, forward-looking thinking, and a close alignment with the skills’ matrix.”
Challenges in navigating The Great Board Refresh
In the midst of a talent war, half of those polled (50%) said that finding the proper talent would be their biggest obstacle while completing the refresh. Many firms realize they need to find board members with the necessary skill sets and competencies to navigate these new difficulties, with cybersecurity risk (32%) and incorporating AI (31%) ranking among the top issues they expect to encounter in the upcoming year.
Moreover, executive experience is emphasized by two out of every five respondents (41%) when selecting new directors for Indian boards. Even though senior leaders are actively seeking out new certifications and training to enhance their resumes, many large organizations still strongly favor hiring leaders who have served on a board before.
“When recruiting new board members, companies should think beyond the conventional approach,” said Heidrick & Struggles India Partner Suresh Raina. “Companies are encouraged to consider implementing robust succession planning for a dynamic and inclusive boardroom as a means of developing future-ready leadership.” Companies need to begin long-term succession planning sooner, regardless of whether the board chooses an external or internal successor in the end. This gives more space to think about applicants with different skill sets and strengths, which will strengthen the bench of potential leaders. Accepting new applicants can also increase the pool of talent and provide boards with access to a variety of viewpoints and unrealized potential.”
Prioritizing cross-sector experience and specialized backgrounds
“When recruiting new board members, companies should think beyond the conventional approach,” said Heidrick & Struggles India Partner Suresh Raina. “Companies are encouraged to consider implementing robust succession planning for a dynamic and inclusive boardroom as a means of developing future-ready leadership.” Companies need to begin long-term succession planning sooner, regardless of whether the board chooses an external or internal successor in the end. This gives more space to think about applicants with different skill sets and strengths, which will strengthen the bench of potential leaders. Accepting new applicants can also increase the pool of talent and provide boards with access to a variety of viewpoints and unrealized potential.”
Developing future-ready board members
During the Great Board Refresh, Indian organizations will place a high focus on creating boards that are prepared for the future. Organizations are beginning to see the benefits of having board members with subject-matter expertise, cross-sector experience, and a new viewpoint.
It’s critical to incorporate succession planning into the ongoing board process in order to obtain a competitive edge. By initiating succession planning early on, organizations can embrace a long-term strategy for selecting directors. First, the strategic objectives and purpose of the company must be determined. Next, the board’s current capabilities must be assessed in relation to these goals, and any gaps in expertise must be filled.
Board chairmen and the nominating and compensation committees will play a key role in fostering an inclusive board culture, which will benefit boards as well. In order to ensure that the board is cohesive and functions well, this entails doing more than just hiring people from a variety of backgrounds. For example, it entails making sure that directors from a range of backgrounds can contribute completely and truthfully.
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