Board directorship is a serious commitment, not a leisurely retirement gig. This is the key sentiment Enterprise Explores with Michele Kythe Lim, President & CEO of the Institute of Corporate Directors Malaysia (ICDM), and Tunku Alizakri, Former Chairman of Penjana Kapital and current board member of Petronas Dagangan and Bumi Armada.
Board directorship is often seen as a cushy retirement reward, a final, comfortable stop for seasoned executives (or even friends and family). However, in today’s fast-paced and complex business environment, this view is not only outdated but also potentially harmful. The role of a board director is demanding, requiring continuous education, a deep understanding of current issues, and a commitment to governance and operational oversight. It’s far from a leisurely retirement gig.
As the responsibilities of boards grow increasingly complex, Michelle and Alizakri emphasise the need for professionalisation as they share their experiences and insights on the true scope of the role of board members, the importance of board selection and diversity, and the shift towards viewing board roles as professional careers rather than retirement perks.
Among key topics we discuss include:
Professionalization of Board Roles: The need for professionalisation of board roles is emphasised, moving away from the outdated view of board positions as retirement perks.
Chairperson’s Role and Skills: The chairperson plays a critical role in managing board dynamics, ensuring diverse perspectives are heard, and guiding the board towards effective decision-making.
Board Diversity and Performance: There is a direct correlation between board diversity and company performance. Diverse boards bring a variety of perspectives that enhance decision-making.
Board Remuneration and Talent Attraction: Adequate remuneration is necessary to attract and retain talented board members who can bring valuable insights and expertise to the board.
Transition Challenges for Executives: Transitioning from an executive role to a board role requires a significant change in mindset, focusing more on oversight and strategic guidance rather than day-to-day operations.
Balancing Governance and Operational Roles: Board members must strike a balance between providing governance and understanding the operational realities of the business without overstepping their roles.
Importance of Continuous Development: Continuous education and training are essential for board members to stay effective and keep up with the evolving business and regulatory environment.
Regulatory and Compliance Pressures: Increased regulatory and compliance requirements, such as sustainability reporting, add to the responsibilities of board members, necessitating a deeper understanding of these areas.
Shareholder Dynamics: The influence of majority shareholders and the need for independent directors to balance shareholder interests with the company’s long-term goals were discussed, highlighting the importance of objective decision-making and potential conflicts of interest.
Future of Board Career: Board directorship is a viable and rewarding career path, with both Alizakri and Michelle encouraging more professionals to consider this route and contribute their expertise at the board level.
Tune in to understand the critical importance of professionalising board directorships and the continuous development required to meet the demands of today’s fast-changing business environment.
This story was first aired on BFM.
