{ "docId": "019dd923-5e88-73ef-bd58-c84bda633eb1", "docSlug": "6fc593507a0ebe01", "documentTitle": "ey global board risk survey 2023", "authorId": "MorganStanley", "authorName": "EY", "documentKindSlug": "consulting-deck", "documentKindLabel": "Consulting deck", "sourceTypeSlug": "equity_research", "sourceTypeLabel": "Equity research", "presentationDate": null, "orientation": "portrait", "aspectRatio": 0.773, "pageNumber": 5, "pageCount": 7, "prevPage": 4, "nextPage": 6, "slideType": "key_messages", "function": "summarize", "density": "overcrowded", "nDataPoints": 0, "notes": "Includes a quote from Thomas Monahan, public company board member.", "elementsJson": [ "headline_text", "quote_block", "paragraph" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-5e88-73ef-bd58-c84bda633eb1/5", "deckHref": "/decks/019dd923-5e88-73ef-bd58-c84bda633eb1", "deckJsonHref": "/decks/019dd923-5e88-73ef-bd58-c84bda633eb1.json", "deckAnchorHref": "/decks/019dd923-5e88-73ef-bd58-c84bda633eb1#slide-5", "components": [ { "bbox": null, "kind": "callout", "text": "Scrutiny of existing processes is the place to start for boards who are thinking about how to do things better ... especially for those who want to be more supportive of innovation.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-340a-72a9-8459-51e5e140d9be", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.35, "x": 0.057, "y": 0.325 }, "kind": "paragraph", "text": "Thomas Monahan, public company board member", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "228d9c8e-856c-4b7f-ab44-d03531e0402a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.18, "w": 0.42, "x": 0.057, "y": 0.365 }, "kind": "paragraph", "text": "While the elements covered to this point - diversity of skills and experiences; being knowledgeable about changes and potential disruptions; encouraging healthy, productive debate about trends and innovation - have been identified by directors as changes that are essential for effective board oversight of innovation, the processes for boards must also change to enable the right discussions at the right time. The traditional board calendar was developed to distribute the board's work across the year and align board decision-making with annual corporate budgeting and capital allocation decisions. Five or six full board meetings, with an early fall strategy off-site, is a familiar experience for many directors.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "77cb7d9d-fdc5-4457-88f6-96f46fb6c049", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.31, "w": 0.42, "x": 0.51, "y": 0.615 }, "kind": "paragraph", "text": "Another set of practices for future-focused boards is to revise the structure of traditional strategy planning to enable a 5/3/1 planning process (five-year vision, three-year strategy, one-year operating plan). Instead, leaders are putting in a more dynamic process that considers the now, next and beyond horizons that are less time-bound and more change-driven. Starting in the future, the \"beyond\" horizon is where to address futures, scenarios and trend-tracking that informs the vision and strategy for the organization from an outside-in point of view. The \"next\" horizon ties to the corporate strategy that may be a rolling three-year view but should be called into question if any of the tracked strategic triggers are tripped at any point in the operating year. This enables flexibility and a quick response to impactful changes. Finally, stability of planning and budgeting is needed in the \"now\" horizon, which includes the annual operating plan and budget but can be paired with crisis management approaches if the current-year plan has to be revised due to a major unexpected disruption.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7b9258ae-5c2b-4499-953b-6a30950d555a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.18, "w": 0.42, "x": 0.057, "y": 0.745 }, "kind": "paragraph", "text": "Directors we spoke with are very clear that an important part of the board's role is to help management not get distracted by headlines and the noise that comes from our world of social media. However, the importance of understanding and addressing a trend line rather than a headline is still core to how future-focused directors approach their role. They understand there may be times when discussions and decisions may need to be accelerated and critical assumptions in the strategy may need to be revisited. One director spoke for many in sharing that finding the right balance is not easy, noting that full strategy sessions three to four times a year can be \"overkill\" while acknowledging once a year is also insufficient.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a57c35c5-6659-4c47-8f6a-8e591e60bdae", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.18, "w": 0.42, "x": 0.057, "y": 0.555 }, "kind": "paragraph", "text": "Today, however, many directors we interviewed noted the accelerated speed at which the world is changing. \"Generative AI\" went from a phrase few had heard of in Q3 2022 to the dominant disruptive technology in Q2 2023. Traditional board decision-making cadences and processes do not move at the pace of today's decision-making needs. Future-focused boards look for ways to embed opportunities for faster recognition of new innovations, disruptions, and relevant decision-making into their processes. Rather than radically altering the cadence of the board, they identify opportunities to streamline work or discuss cutting-edge issues within the context of existing processes.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "bf6e0a51-0ad8-4b43-95a5-64542886078f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.24, "w": 0.42, "x": 0.51, "y": 0.365 }, "kind": "paragraph", "text": "One practice is to set up an early warning system for potential disruptions. This can be a set of \"triggers\" (metrics/indicators) that are tracked and managed and identify when a disruptive pattern may be emerging at a level that can cause significant impact. In examples shared, boards asked management to first identify the most critical assumptions on which current and future strategy depend. Then look for ways to measure when these assumptions are under threat and what level of tension is necessary to revisit the firm's strategic position. This may also work with, rather than against, existing management processes. \"Telling management what you want tracked helps to focus their energies,\" one board director advised. \"Performance - getting aligned goals, metrics, and compensation models helps management drive innovation in a way the board can assess.\"", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e92bebfe-1384-455f-a771-ef2002f0ff80", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.88, "x": 0.057, "y": 0.245 }, "kind": "quote", "text": "Scrutiny of existing processes is the place to start for boards who are thinking about how to do things better ... especially for those who want to be more supportive of innovation.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "87277c13-8008-43f3-b44b-6eadb342cd13", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "Scrutiny of existing processes is the place to start for boards who are thinking about how to do things better ... especially for those who want to be more supportive of innovation. — Thomas Monahan, public company board member", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd952-340a-72a9-8459-558e6c49d6f6", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.62, "x": 0.19, "y": 0.135 }, "kind": "title", "text": "Build agility into board decision processes", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "bdf5a2ea-a992-4199-b518-dfbe1563a5a1", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Action Titles", "slug": "action-titles", "agent": "Architect", "layer": "slide", "matchId": "019de76c-0cab-770e-b993-37c988fc2476", "evidence": "'Build agility into board decision processes'", "confidence": 85 }, { "name": "Credibility Transfer", "slug": "credibility-transfer", "agent": "Storyteller", "layer": "slide", "matchId": "019de76c-0ccd-724f-86e7-72af227a2c32", "evidence": "Thomas Monahan quote anchors the recommendation", "confidence": 90 }, { "name": "One Idea Rule", "slug": "one-idea-rule", "agent": "Designer", "layer": "slide", "matchId": "019de76c-0cee-76ff-97c0-8907374df367", "evidence": "Single theme: agility in cadence and decisions", "confidence": 75 } ], "frameworks": [], "arcBeats": [ { "to": 5, "from": 2, "beatId": "019de76c-0830-70c6-9916-1f7888f3f3a2", "arcName": "The Consultant's Gambit", "arcSlug": "consultants-gambit", "beatName": "Solution & Approach", "beatSlug": null, "evidence": "Numbered themes 1-4: perspectives, visibility, debate, agility", "position": 3, "confidence": 78, "parentBeatName": null, "parentBeatSlug": null }, { "to": 5, "from": 2, "beatId": "019de76c-08dd-76a8-a011-60f48b09ade2", "arcName": "The Transformation Tale", "arcSlug": "transformation-tale", "beatName": "Future Vision (Gain)", "beatSlug": null, "evidence": "Four future-focused practices articulated by leading directors", "position": 2, "confidence": 58, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [ { "to": 5, "from": 2, "name": "Mece Breakdown", "slug": "40-mece-breakdown", "bestFor": "Problem structuring, ensuring completeness, strategic analysis", "matchId": "019de76c-092f-719c-86a0-2f7009924940", "evidence": "Numbered 1-4 sections, each a distinct dimension (skills, knowledge, debate, agility).", "position": 1, "objective": "Four distinct ways leading boards are redefining innovation oversight", "structure": "The Whole -> Category A (distinct) -> Category B (distinct) -> Category C (distinct) -> Complete Coverage", "confidence": 80, "description": "Divide a complex topic into mutually exclusive, collectively exhaustive categories" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }