Each step in the 6E agenda supports the next one, creating a virtuous cycle. Just as the challenges are multifaceted and interconnected, so too are the actions.
E1. Elevate efficiency: Reduce burdens on directors and free up time to focus on topics that matter most
Increasing workloads and regulatory demands faced by public company boards drive the need for greater efficiency to free up bandwidth and allow more time for strategic focus. The board should pursue active pre-meeting engagements and collaborate with the management to adopt new technologies, streamline processes and focus agendas on fewer, high-value topics.
E2. Enhance effectiveness: Change ways of working to allow the board to deliver full value
A suboptimal dynamic between the board and management can lead the executive team to miss opportunities to benefit from the board’s wise counsel. Asymmetry in information flow to the board reflects this dynamic and can impede effective governance, which depends on the board and management team openly identifying problems and opportunities and jointly determining the best path forward.
E3. Exercise foresight: Engage the ecosystem to improve foresight and sensing
Boards may suffer from a lack of opportunity for future-oriented thinking, inadequate access to fresh perspectives and insufficient mechanisms for strategic exploration. To address this foresight deficit, boards should engage with the external ecosystem, systematize scenario planning, consider more dynamic approaches to rotation and composition, work in sprints and harness AI to enhance strategic dialogue.
E4. Encourage independence: Prevent governance failures with curiosity and critical challenge
Board effectiveness depends on independent thought and critical challenge. However, internal cultural pressures and consensus-seeking often stifle debate, risking governance failures. To drive robust oversight, boards should cultivate their own robust view of risk, seek unfiltered information and independent sources of information and proactively cultivate a contrarian mindset.
E5. Engineer simplicity: Give directors greater confidence in their governance of the global enterprise
The complex structures, numerous subsidiaries and diverse jurisdictions of large global enterprises create governance challenges and make it difficult to know with real confidence what is happening across the organization. Boards should consider principles-based frameworks that balance global consistency with local adaptation, increase their direct exposure to operations and simplify entity structures (including ownership, organizational and capital arrangements).
E6. Employ AI: Augment board capabilities as part of a broader enterprise AI strategy
Despite AI’s transformative potential, boards fully acknowledge that they are underutilizing the technology in relation to enterprise and governance matters. Boards should oversee the adoption of responsible AI frameworks and foster human-centric governance augmented by AI (e.g., utilizing AI for real-time, data-driven insights and predictive analytics).
Human-centered transformation is key
While innovation and transformation are often headlined by technology investments, these projects ultimately succeed or fail because of people.
EY-Oxford Saïd Business School research found that 96% of transformation programs encounter significant challenges or “turning points”, highlighting the inherently unpredictable nature of large-scale transformation. More importantly, the research also found that organizations adopting a human-centered approach to navigating these turning points are significantly more likely to succeed.
For boards, this insight is critical as governance of transformation should not focus solely on technology implementation or financial performance. Directors play an important role in ensuring that transformation strategies address human factors, from talent development to change management and communication, before these escalate into significant risks to transformation.
