The Institute of Corporate Directors Malaysia (ICDM) recently concluded a comprehensive survey in collaboration with its eight partners under the ASEAN IOD Network, shedding light on the critical need for boards across Southeast Asia to enhance their foresight.
The survey, encompassing 335 respondents from boards and C-Suite management, emphasises the urgency for boards to evaluate their effectiveness and strategically prioritise key threats anticipated over the next two years.
The survey identifies four key threats that boards need to address urgently:
- Having the right talent and leadership
- Diplomacy in managing macro and geopolitical uncertainties
- Sustainable and effective operational strategy
- Board-management relationship and dynamics
Michele Kythe Lim, president and CEO of ICDM, underscores the importance of a paradigm shift at the board level to confront the evolving challenges in their pursuit of growth.
She said: “Amidst the ongoing economic challenges, we remain steadfast in our commitment to navigating leadership in the dynamic landscape of Southeast Asia. Governance is coming into focus on a more profound level in the wake of heightened stakeholders’ expectations, as evidenced by the many changes taking place on boards around us recently.
As leaders, we recognise the pivotal role of talent, the power of effective leadership and the imperative of sustainability in our current environment and that a paradigm shift at the board level is necessary to confront the reality and barriers in their pursuit for growth.
This regional survey is part of our hope to collectively transform leadership and drive businesses to greater heights by encouraging them to launch into action and openly address the critical areas in board and corporate governance that will nurture deeper cohesion in organisations.”
The 2024 ASEAN Board Trends Survey outlines five critical areas for intervention to reinforce board effectiveness:
- Realign Board Agenda and Set Priorities Right: Boards must adapt to changing circumstances and align their priorities with current and future business trends.
- Improve Board-Management Relationship and Dynamics: Aligning priorities between boards and management is crucial for increased effectiveness.
- Progressive and Forward-looking Board Architecture and Culture: Boards need to cultivate a culture of open dialogue, courage, and candor among members to support evolving business needs.
- Board Effectiveness at Taking Stock: Boards should internally assess their value proposition, skills, governance, and mindset for effective growth.
- Navigating Board Sustainability Challenges: Boards must address sustainability beyond reporting, acknowledging the importance of supporting human capital function through talent governance.
As organisations strive to address these critical areas in governance, the survey recommends undertaking a formal board effectiveness evaluation, reevaluating composition and remuneration packages, and fostering strong board-management relationships.
Additionally, it emphasises the importance of talent governance, organizational culture, and authentic embrace of sustainability agendas for driving organizational success.
ICDM also introduced the ASEAN Directors Registry, set to be fully operational in July, aiming to elevate global recognition for ASEAN board talent and advocating for enhanced ASEAN representation on the boards of businesses in the region.
The survey, conducted in collaboration with ASEAN IOD Network partners, can be accessed on ICDM’s website here.
