The secret key to Excellence at the Board of Directors…
Not many business schools or company management programs recognize it (yet) as a core skill for board members. There are some attempts to push, for example, stoicism as a management “philosophical hype” for some of the Silicon Valley’s top shots but these can barely represent a common board pattern. Despite, or because, of this, we consider Philosophy as the secret key for Excellence in Boards of Directors.
We should think twice before accepting the status quo that philosophy would only be an academic, theoretical, non business related activity reserved for intellectual dreamers.
We should better understand how the mega trends (technological, societal, governance, environmental) will impact on the skills board members will have to even better master.
And then only will we realize how Philosophy understanding is a MAJOR asset for boards to operate.
Bring Philosophy to where it belongs: The Board of Directors
Let’s start with the definition of philosophy and link it to boards’ duties:
Philosophy: (from Greek φιλοσοφία - philosophia, literally "love of wisdom") is the study of general and fundamental questions about existence, knowledge, values, reason, mind, and language. (Wikipedia)
“Love of wisdom”: If there is one single company, or shareholder or employee that does not want the board members to be wise, please raise your hand!... Nobody? (I appreciate that few readers may consider that some boards do not show a lot of wisdom, but this is not today’s topic).
“general and fundamental questions”: Who else than the board should be the warrant that fundamental aspects of the organization and the world it evolves in are well analyzed, prepared, debated and articulated in actionable initiatives?
“existence”: What is the purpose of the organization? Is it alive? Is it evolving?
“knowledge”: What does the company do? How? With whom?
“values”: What drives people in the organization? What do we stand for? What legacy are we building? What are the governance principles?
“reason”: To be understood in term of reasoning. What is the decision process leading the board? How does the board approach challenges and debates? What kind of board “style” do we want?
“mind”: How is the awareness of the board to the world? How are external and internal influences factored? How is the state of mind the board wants the company to be led with?
“language”: Brand and communication… What are the stakeholders’ perception and the desirable company reputation the board is striving for?
These are the basics and for all of these elements the link from philosophy to board duties is pretty straight forward to understand. In fact, the board is no less than a philosophical body. And its philosophical purpose will become extremely relevant with the ongoing and fast accelerating mega trends.
We are now going to review four mega-trends -technology, society, governance, environment- and for each of them see how philosophy helps us to address the challenges and how obvious its relevance to boards of directors will be.
Technology, digitization, robotics and AI: Welcome to “Philo 5.0”
Aristotle is recognized as one of the ancient philosophers that had the most influence on (modern) Western philosophy. He developed what is now called syllogism, a data and logic, deductive reasoning based, decision process. He also is a reference on how to question and approach ethics dilemma.
When faced to today’s technological steps both are high on the board’s agenda. The decisions a company board have to take in terms of Artificial Intelligence programming bias (what is right/wrong in the automated deductive based decision of an autonomous driving car, or how much private information is collected and sold), or digitization and robotics (how many jobs are to be terminated with the introduction of new robots or virtual teams), are not answered easily. What role does our technology play in our society, and what responsibility do we, the creators of these innovations, have in shaping the societal and economic consequences that accompany them?
Boards have to take care of the usage, the morale and the consequences of possible bias in their decisions. The art of rhetoric to drive these discussions in the board and a grasp on ethical questioning are essential. Both are an integral part of philosophy studies.
Society and generation Z: Welcome to the search of truth
Generation Z (born 1995 to 2010) are true digital natives: Since their childhood they have been surrounded by an hyper-connected society through internet, social networks, and mobile systems. Used to vast amounts of information at their disposal, they are more pragmatic and analytical about their decisions than members of previous generations were.
A very important attribute of the Z generation is their search for truth. They expect organizations to be transparent and reliable. This search of truth is a challenge because as philosophy would put it: What is truth? What is your truth? Is there a single truth? The questions and dilemma boards have to solve are related to reputation, authenticity, communication and employer attractiveness. We are shifting from the Millennials that mostly wanted to find a purpose for their job to Gen Z that want to contribute to a company with a purpose. Generation Z is growing and is the future workforce as well as the future consumers. So, the board would be well inspired to have a company purpose and to communicate it. (Not fake it, it won’t pass the Gen Z trust test)
Governance and the fragility of values: Welcome to exemplary
Ethics should be an integral part of any business. Yet it is too often lost in “reporting traps” and diluted in compliance manuals whose main function is to document theoretical best practices. Documenting is nice, living it is better. The board’s duty in making sure the organization has high standards of governance and behavior should be embedded in its mandate. The boards have to answer to questions such as:
What drives people in the organization? Why?
What do we stand for? Why?
What legacy are we building? Why?
What are the governance principles? Why?
Over the last decades there has been a shift of credibility that is even accelerating. People are less inclined to “trust” churches or temple leaders. In most regions the religious values that were holding people together have been either fading away or interpreted by some minorities on more radical stances. Yet the same trend seems to happen on a political level. Most democracies are suffering from high abstention and nationalistic leaders are on the rise in many regions.
Without taking position about these 2 shifts it can be derived that corporations have, even more than before, a societal role to play. Many people will (and already do) mirror the values displayed and lived at their working place. And here come the philosophical choice boards have to do: What are our values? To do these choices board members may consider leaving their ego at the door and consider some of the stoicism principles developed by Greek Zeno and supported by Romans Marcus Aurelius and Seneca. A bit of self-discipline, mastering emotion (not hiding or lacking emotion but being emotionally intelligent, empathetic), being rational and having a peaceful mindset may well be the attributes and skills your future board will appreciate. Board members are looked at by many stakeholders and they have to contribute to the exemplary of the organization they are involved with.
Environment and the meaning of life: Welcome to the final choice
The meaning of life as we perceive it is derived from philosophical and religious contemplation of, and scientific inquiries about existence, social ties, consciousness, and happiness (Wikipedia).
From a philosophical perspective there are many different views on the meaning of life such as: Platonism (attaining the highest form of knowledge), Aristotelianism and Stoicism (having in common virtue and its exercise), Epicureanism (freedom from pain and freedom from fear), Kantianism (deontological theory) or Nihilism (life being without objective meaning) to cite a few.
We could add Theism, Existentialism, Pragmatism, or East Asian perspectives of Confucianism (achieving virtue through strong relationships and reasoning) or religious meanings of life from Abrahamic religions (Judaism, Islam, Christianity), Hinduism and Buddhism or Taoism or Shinto.
The point is not on what meaning we want to give to our lives, there are plenty, but simply: Is there a meaning? And if the board of directors’ answer is yes, then there is a logical step: We can’t further destroy ourselves. Meaning: save the planet…
If there is no meaning to life but just a race to the highest possible short-term profit, then boards will decide to let the planet and its population exponentially suffering. Mining of finite resources (like cobalt for our electric batteries with associated child labor and slavery) will continue, deforestation (as well for our “bio” fuel and “bio” plastics) will accelerate, the oceans will be plastic full and fish empty and the rising sea level will kill and displace million humans.
OR, boards take a philosophical overview of the challenges and mitigate the negative trends with dedicated resources allocations to alternatives models and take decisions considering the human integrity and the respect of humanity and biodiversity.
Excellent boards should contribute to answer fundamental questions. There are wise choices to be done. Comprehending philosophy will help . Final quote from Aristotle:
The original article has been published on Linkedin on June 25th 2019 by Igor Allinckx, Managing Partner CXOs & Co.