Why COVID places innovation as one of the top demands of boards of directors
We often hear that the board only makes sense for large companies and in particular, if they are listed or subject to complex regulatory regulations, so that the board properly fulfills the oversight function and can prevent wrongdoing. regulatory issues and risks, and therefore sometimes even reputation. The essential function justifying the existence of the board of directors thus constitutes the control function, structuring the agency’s theory, according to which the directors receive the mandate to act from the investors whose interests they represent on the board.
However, in the value creation matrix of the company, one of the main tasks is to maintain innovation, that is to say to make sure that an innovative product or service persists in the long term for customers, by improving or renewing it. Thus, the main task to be defined by the board of directors will be precisely to ensure that the company innovates, renews the product, brings continuous improvements to its customers and meets the demands of other stakeholders.
The importance of innovation cannot therefore be left in the hands of general management or management, without being contrasted and controlled by a professionalized board of directors, with members who have a specific profile for it. Questions like:
Cul es el procedimiento de innovacin en la empresa Utiliza la empresa el mejor ecosistema para innovar Qu recursos is destined for innovacin Qu resultados se obtienen y cmo se explotan los procesos de innovacin Cmo se sita la empresa en el ecosistema de innovacin Cmo se busca a los partners en el proceso de innovacin Qu porfolio de proyectos de innovacin se gestionan y con qu periodicidad Cmo impacta la innovacin en los resultsados econmicos de la compaa Qu nuevos negocios puede generar la innovacin o qu cambios y qu impacto puede tener in the gestin of the business
they are more important than ever in today’s environment. Thus, the governance activity of the board of directors must be measured in terms of innovation and new activities, and as such, it requires profiles, so far little sought after in the usual boards of listed companies, profiles that reflect the marked diversification. through the introduction of new categories and markets, internationalization, the acquisition of other companies and companies or the capacity for entrepreneurship and the compression of the innovation ecosystem and new economic models by the leaders.
In the model of governance functions of the board of directors, the function of business revitalization and development of the company is therefore placed, before strategic planning, that once it has the product, it will analyze the market situation, its strengths, weaknesses, opportunities and threats, as well as the competitive position to be achieved and the definition of the resources required to achieve it. Much of innovation and new businesses must be based on digital models, which therefore require profiles of male and female entrepreneurs who are familiar with innovation ecosystems.
In this context of innovation, the European Innovation Scoreboard 2020 (EIS) provides a comparative assessment of the performance of research and innovation in the countries of the EU, EFTA, Australia, Brazil, Canada, China, India, Japan, Russian Federation, South Africa, South Korea and the United States. The EIA includes indicators related to innovation activities in enterprises, investments in research and innovation and elements of human resources and employment. Under it, EU countries are divided into four performance groups. In its ranking, Spain is below the EU average, in the last group, behind even countries like Ireland, Portugal, Greece or Poland.
On the other hand, research also indicates that innovation is the key element in generating wealth in society, creating new jobs and contributing to the competitiveness of companies. For this reason, understanding the functioning of the innovation ecosystem, knowing what content may be of interest to innovate in the company and how to promote innovation in the business world, is undoubtedly one most important challenges for boards of directors today. the Spanish councils do not give enough priorities judging by the statistics and their composition.
For family businesses, this need to have a board bringing together these profiles is even more important, especially in the second and third generations, who must maintain the level of innovation and tackle internationalization. The board government will thus be able to provide a basic professional vision to survive in this environment of constant renewal and demand for an understanding of constantly changing market regulations. In addition, it will be very useful to provide the company with:
an eternal vision, more demanding and professional in the management of the company and in family collegial decision-making, which will be more in-depth and support tailored for the training and professionalization of teams and executive family members support and professionalization in the succession process, the perception of inefficiencies, inconsistencies, incompetence and possibly non-conformities in the company and its management.
In this era of covid, where we have seen that the essential replaces even the important, innovation must be the number one priority of consulting, precisely to keep the company within the parameters of competitiveness demanded by the market and demands. of the consumer, and this in particular in family businesses, which need new wickerwork to ensure their sustainability.
The Woman Forward Foundation offers training courses, mainly intended for potential women directors, particularly focused on the commented aspects of corporate governance, related to the relationship with the various stakeholders next March. More information can be obtained at the following link: https://womanforward.org/formacion-en-liderazgo-femenino/
Click here to register for the training