More than a decade ago, most boards spent the majority of their time discussing growth, performance and strategy. These conversations still happen of course, but they’re increasingly interrupted by something else that’s far more ominous – uncertainty.
Not uncertainty in a traditional sense, organisations have always faced risk as markets rise and fall. Governments change and unexpected events take place.
What’s different today is the sheer number of variables which boards are being asked to consider simultaneously.
If you spend enough time talking to directors across associations, federations, NGOs and commercial organisations a similar theme begins to emerge. Many feel that they’re operating in an environment that is becoming much harder to read.
A geopolitical event on the opposite side of the world suddenly impacts supply chains, while a regulatory decision creates unintended consequences for members, and another technological development raises questions no one around the board table has had to answer before.
Stakeholders expect organisations to respond to issues siting well beyond their traditional remit.
One chair recently described it to us rather well: “Every meeting feels as though we’re discussing three crises at the same time.” Many directors will recognise this feeling. The challenge isn’t that boards are performing badly. In fact, most are working harder than ever. It’s that many governance systems are designed for a world that once felt considerably more stable and predictable than the one organisations are currently navigating.
This matters because governance has always been easier when the environment is broadly understood. When it isn’t, the board’s role changes.
We have found that the organisations which navigate uncertainty most successfully are usually those that remain clear about why they exist, and who they ultimately serve. Without such clarity, every decision becomes more difficult.
Experience alone is no longer enough
Twenty years ago, many membership organisations could focus primarily on serving members, developing professional standards, and supporting their sector. While these responsibilities are still central, boards are now often expected to engage with broader questions around sustainability, technology, regulation, workforce challenges and social expectations.
At the same time, members themselves are becoming more diverse in their views and priorities.
As one association chief executive recently explained to us: “The challenge isn’t deciding what members want. It’s that different groups of members often want entirely different things.” The observation captures something important. Modern governance is becoming less about administering consensus, and more about navigating difference.
Some of the effective directors we meet are rarely those who claim to have all of the answers. More often, they are the ones who remain curious, ask questions, and seek alternative perspectives.
One of the most common assumptions in governance is that experience naturally leads to better decision-making and this is true, up to a point.
This is particularly true for membership organisations forced to take a public position on a divisive issue affecting its wider profession. At this point, the question has to be asked – should a federation ever prioritise the interests of one stakeholder group over another? Or, how should an organisation balance financial sustainability against member expectations? There are rarely perfect answers to these scenarios and whatever decision is ultimately made, someone is bound to disagree with it.
That reality makes judgement increasingly important.
When circumstances are complex, purpose is often the anchor that helps guide decision-making. Furthermore, experience provides perspective. It helps directors recognise patterns and avoid the mistakes that others might miss. But there is also another side to this story. Some of the most vulnerable boards we encounter aren’t inexperienced. Quite the opposite in fact.
They are often populated by highly accomplished individuals who have led highly successful organisations, managed major change programmes, and built truly impressive careers.
This doesn’t make experience any less valuable. It simply means that adaptability matters just as much.
Some of the effective directors we meet are rarely those who claim to have all of the answers. More often, they are the ones who remain curious, ask questions, and seek alternative perspectives.
And they are comfortable admitting when they do not yet know enough.
That quality is becoming increasingly important as governance translates into an exercise of judgement. We often remind boards that governance is rarely about choosing between a good or bad option.
Most often, it involves choosing between several, reasonable options, each of which can carry varying consequences.
The boards that are coping best
Not all boards are struggling and, in fact, some are adapting remarkably well. What is particularly interesting is that they are not necessarily the boards with the greatest resources, or the most sophisticated governance frameworks. Rather, they tend to share a number of core behavioural characteristics that:
- Encourage challenge without allowing disagreement to become personal.
- Spend time looking beyond immediate operational concerns.
- Invest in learning.
- Bring different perspectives into discussions.
And, perhaps most importantly, they recognise that uncertainty is not something to be solved ‘once and for all.’ It is something to be managed continuously.
One chair recently said to us: “We’ve stopped looking for certainty. We’re focusing instead on becoming better at making decisions when certainty doesn’t exist.” This may be one of the most important governance lessons of our time.
A different leadership challenge
There’s a temptation to see uncertainty as a problem that will ultimately pass. History suggests otherwise.
The specific issues facing organisations will change, but complexity is unlikely to ever disappear. If anything, it is becoming a permanent feature of organisational life. For boards, this means governance can no longer be viewed as a straightforward compliance exercise, or an oversight function.
Increasingly, it is a strategic capability. The boards that will thrive over the coming decade are unlikely to predict every challenge correctly. That’s never been realistic. More likely, they will be the boards which remain adaptable, thoughtful and open to learning as conditions evolve around them.
Professors Andrew and Nada Kakabadse are internationally recognised experts in leadership, governance and board effectiveness. Their work focuses on helping boards, associations and organisations strengthen decision-making and leadership in complex and uncertain environments.