For the first time in modern history, we now have technology affecting every single sector in the economy. From agriculture to shipping, companies take inputs and collects data to help drive business. This, as an example of the 21st century business environment, requires directors to be up-to-date and will most probably drive the addition of younger board members. It used to be that in any industry, years of experience meant knowledge, leadership, and wisdom. But if you work in entrepreneurship, technology, or digital media, this framework may be dated. This next generation director’s contributions will be essential to how the very best companies make judgments, forecasts, and decisions. Davos replacement of economists with tech CEOs in high-level speaking slots is an example of how board members may need to be more data driven in the future when weighing in on strategic assumptions and economic potential from technology. There is no check-the-box or absolute right person for your next director. This is a company-by-company conversation. One thing is certain, new people with different experiences will bring new perspectives. Here are a few questions that can help drive the next director conversation:

·         What is the optimal mix of experience and knowledge for our board as the world, economy, and markets change?

·         Who has the breadth and depth in the industry to help address what the company will face going forward?

·         What are the key board and committee leadership skills needed?

Today’s business environment , where everything is in play, the possibilities, vulnerabilities and uncertainties make for an increasingly dynamic environment and clearly require more of sitting directors. A 21st century mindset that fits and can produce “deep smarts” is what I would like to propose in this blog.  With that in mind, I recently read a list for 2015 governance focus points posted on the Harvard Law School Forum.  From the items described for boards, I was most interested in the impact of shareholder activism on board decisions. Here are a few ideas to consider around the idea of a modern boardroom:

· To what degree does your CEO look to the past verses the future when presenting to the board?

· Do you get a solid impression that your CEO is listening – entertaining viewpoints especially opposing ones, from the board?

· Who are the sources, formal or informal that your CEO goes to for information at “the scene of action” per the company strategy or key risks?

Part of the reason why CEO and board relations intrigue me, is the fact that shareholders seem to be gaining in their efforts to influence the boardroom. While this may, in some cases, produce positive results for the company, it may come at the expense of other values that are central to the sustainability of healthy corporations. In other words, if directors put more time and attention to one of the most ambiguous aspects of their role, CEO and board relations, it may bring increased clarity when shareholders present concerns.

The single most important task before you join a board is due diligence. Being a director on board is a tradeoff. On the one hand, there is exposure to reputational and financial risk. On the other hand, there are benefits – tangible and intangible. In a world marked by disruptive forces, sharp scrutiny, and tighter board accountability, wise director candidates are asking more questions. Whether you are considering a for-profit, non-profit, government, or advisory board seat, examining both the risks and rewards in a systematic fashion sets the groundwork for a thoughtful career move.

Joining a board is a significant decision. That said, as a potential board candidate, it is wise to invest the time and money into a systematic due diligence process and discuss the results with an attorney, a board consultant, or other professionals before making the final decision to join a board.

For more information: New Director Board Due Diligence

Here are a few biases that directors can fail to recognize in a boardroom decision-making process. As your board moves forward on investment decisions, consider how each of these may be playing a silent but potent role.

Anchoring: Looking at past and present successes and not giving proper weight to adjustments in strategy when new information is presented.

Bandwagon Thinking: Other directors think this is a wise decision, so it must be worthwhile.

Confirmation Bias: The assumptions surrounding the decision are overwhelmingly positive without taking equal time to explore the possible negative outcomes.

Need for Closure: The need to draw a conclusion, or escape feelings of uncertainty, hurries the decision-making process, even when the environment is evolving.

Sunk Costs: The time and resources already invested are believed to be so great that a healthy debate on alternatives is dismissed.

Competition can be fierce for certain director candidates making director succession planning a key to company health. Leading companies pay attention to their ability to attract and retain the best people, and this philosophy is no different at the board level. Director succession planning can also help mitigate risk in the case of an emergency exit of a director. On the human side, the shock of an unexpected death can be softened with work that has already been completed in a thoughtful manner. For the progressive board, being proactive in succession planning is a best practice. With the average age of the U.S. director being 60-plus, common sense demands, not only an awareness, but to have some of the pre-work in place. Here are a few benefits gained from conducting director succession planning:

• Plans for the impact of losing aging directors 
• Advances the organization’s strategic and competitive position
• Increases the talent pool of board candidates
• Improves the board’s ability to respond to changing environments