The ability to challenge and debate actively can keep boards away from the trap of groupthink in which changes to industries and disruptors are dismissed too easily. Directors we spoke with noted that productive and constructive disagreement among directors can help uncover hidden but strongly held assumptions that may need to be revised to enable innovation and strategic changes. Embedding debate into director education is one way to help foster collaborative criticism. “The board should engage in some exercises around disruption, bring in external speakers, and create an environment that makes it OK to ask contrarian questions,” said a board member. This may help socialize all board members to become comfortable pushing back and providing productive critique to ideas, wherever they may have come from.
Other practices shared included premortems, appointing a rotating “contrarian” at each meeting or using frameworks such as parallel thinking designed to encourage everyone to voice positive and negative viewpoints and provocative questions. One technique is to leverage future-back thinking, in which the group is encouraged to think through possible future scenarios where the company could be disrupted out of its market position and ask how that could happen, how it could be avoided, and implications from those futures to the current strategy and investments.
Regardless of which tools and tactics are used, directors emphasized the importance of making active, robust debate a deliberate part of the discussions for the board rather than relying on individuals taking an ad hoc approach depending on the issue. “It is hard to talk about difficult things, and questioning management is hard. You need [multiple] directors willing to raise questions,” said a seasoned director. “You can’t afford to have one person — no matter how great they are — be the gateway to all the changes and answers,” another board member said.
4. Build agility into board decision processes
While the elements covered to this point — diversity of skills and experiences; being knowledgeable about changes and potential disruptions; encouraging healthy, productive debate about trends and innovation — have been identified by directors as changes that are essential for effective board oversight of innovation, the processes for boards must also change to enable the right discussions at the right time. The traditional board calendar was developed to distribute the board’s work across the year and align board decision-making with annual corporate budgeting and capital allocation decisions. Five or six full board meetings, with an early fall strategy off-site, is a familiar experience for many directors.
Today, however, many directors we interviewed noted the accelerated speed at which the world is changing. “Generative AI” went from a phrase few had heard of in Q3 2022 to the dominant disruptive technology in Q2 2023. Traditional board decision-making cadences and processes do not move at the pace of today’s decision-making needs. Future-focused boards look for ways to embed opportunities for faster recognition of new innovations, disruptions, and relevant decision‑making into their processes. Rather than radically altering the cadence of the board, they identify opportunities to streamline work or discuss cutting-edge issues within the context of existing processes.