Leadership in transition: business resilience, digital transformation, and employees wellbeing policies are top priorities on the board’s agenda, reveals survey from Mazars
Mazars, the international audit, tax, and advisory firm, together with Board Agenda and in association with Henley Business School, launched the ‘Board Transformation: Leadership in transition, how boards and directors are adapting to a post-pandemic reality’ study.
Organisational resilience starts from the top
Since the COVID-19 pandemic has started, the whole world has experienced a level of disruption and business risk, that no one was prepared for. While some businesses have failed, others came up with new ways of transformation and have succeeded. Business resilience has perhaps never been more important than at this very moment.
According to the survey, nearly three-quarters (72%) agree or strongly agree that the pandemic has prompted the board to increase the long-term resilience of the business. Only one in 10 (11%) disagreed with this notion, though 17% were undecided. Also, more than half of the respondents (56%) believe their boards have made substantial changes to the structure or operations of the organisation because of the pandemic.
Asked „Which board priorities have become more important since the beginning of the pandemic & are likely to remain so for the next 12 months?”, 53% of the respondents say that risk management and organisational resilience are at the top of the board’s agenda, with digital transformation a close second (52%).
These days, every challenge is an opportunity and, because of the global pandemic, at the moment, we can identify many new ways to improve the workplace. Mental health has become a top priority within every company. When asked, eight out of 10 respondents (82%) say their board is strengthening the oversight of their employee wellbeing policies. This is one of the most significant findings of the survey and illustrates how much boards have shifted in their views on corporate wellbeing - observers in the past might not have expected to see such issues this high on the board agenda.
„Businesses have been forced to transform at an unprecedented speed because of the pandemic. Some transformations may have been long predicted and merely accelerated, while others have been unexpected. But all have been disruptive, both positively and negatively. A trend that is evidenced in our survey findings and has impacted local businesses as well is the growing appreciation of the evolving needs of the organisation and its people. The leaders should now be considering how to further strengthen engagement and motivation with employees to get the most out of new ways of working. The positive impact that prioritising both environmental and social issues can have on an organisation is also a key aspect to be considered by businesses and their Boards. Finding the right strategy to significantly transform and increase the pace of change while building its positive contribution to society and environment will give businesses the necessary resilience to grow further.”, mentioned Răzvan Butucaru, Partner, Financial Services and Advisory Leader, Mazars România.
Reviewing the business strategy is essential
Boards have needed to fundamentally review their business strategies because of the pandemic. Some have done this, whereas others have not.
Just over half (52%) of respondents say their boards have reset their long-term business strategy, but over a third (35%) say this has not happened within their own organisation. While many have taken the events of the past 18 months as a clear signal for the need to review strategies, there remains a significant minority that has yet to do so, or indeed see no need to do so.
Now, more than ever, there is a need to improve strategic thinking and implementation capabilities, according to a respondent. If the board is not reviewing its strategy, then there is a clear risk that it could be left behind by its competition.
„A good governance can make a difference in any context, especially in unpredictable times, when the role and the responsibilities of the board members go beyond the border of supervising and monitoring a good management; in short, clear and efficient structures and processes, a management team that promotes accountability, transparency, fairness, organisational sustainability and a well defined purpose. It is a time full of challenges, opportunities and choices. In an increasingly complex context, the functional diversity of the board in terms of competencies and networking, continuous training, independent thinking mentality and impeccable integrity, represents a competitive advantage. Encouraging diversity of opinion and creativity, creating a board agenda to address all stakeholders and the ESG factors, together with an assumed role of support and advisory, contributes to building a culture of sustainability, while ensuring a good balance between short and long term objectives.”, mentioned Adela Jansen, Board Member, The French-Romanian Chamber of Commerce.
The pandemic has forced digital transformation
The pandemic has marked a watershed in digital transformation - the implementation of digital strategies was brought forward to rapid deployment, and the gradual shift to remote working accelerated almost overnight. Nearly three-quarters (75%) agree that the pandemic has prompted the board to accelerate digital transformation.
There would appear to be a real acceptance that the way of doing business has changed, whether it is remote working, an increased online presence or increased automation. But equally, there are oversight challenges of working in a remote environment and the need to balance supervision with trust. There are certainly lessons to be learned from the hybrid model of working, and boards will be keen to ensure their organisation does not slip backwards.
Board directors need to ensure that oversight does not become overbearing - employee wellbeing will not be well served by any growth in a culture of surveillance and digital monitoring.
Integrating ESG into the organisational culture
Environmental, social, and governance (ESG) issues are now more in focus as organisations look ahead to a post-pandemic world. The phrase “build back better” has real resonance as the pandemic has exposed many inequalities and shortcomings.
58% of the respondents agree that the boards are now placing greater emphasis on ESG issues because of the pandemic. Leadership style and corporate culture are key components of an organisation’s attitude towards ESG. Nearly half (46%) say their board has sought to reset the corporate culture of their organisation because of the pandemic.
One respondent can see the need for change in the boardroom, saying: “More agility, more diversity, more focus on ESG factors, different director skills needed.”
Transformation has been a key element throughout the pandemic, and our survey highlights some key issues around capabilities, oversight, and engagement. But one thing is clear: such transformation needs to be sustainable.
Based on a survey of 270 senior business leaders, from UK, European Union, North America, Australia and New Zealand, the study reveals a boardroom community that is embracing change, increasing oversight of employee issues, focusing on the long-term resilience of the organisation, and giving equal weighting to risk management on the one hand and the opportunities for digital transformation on the other.
Emilia Popa, Head of Marketing and Communication, Mazars Romania
Mazars is an internationally integrated partnership, specialising in audit, accountancy, advisory, tax, and legal services*. Operating in over 90 countries and territories around the world, we draw on the expertise of more than 42,000 professionals – 26,000+ in Mazars’ integrated partnership and 16,000+ via the Mazars North America Alliance – to assist clients of all sizes at every stage in their development.
In Romania, Mazars has over 26 years of experience in audit, tax, financial advisory, outsourcing, and consulting. Our strength lies in the people we work with – the local team has 7 partners and 250 professionals.