Last week I ran a half-day program on Integrating an Innovation Mindset with Effective Governance for Bursa Malaysia (the Malaysian stock exchange) attended by 160 company directors.
Over the last years I have annually run two-day innovation programs for the Malaysian Director’s Academy (MINDA), designed to develop company directors’ capabilities and mindset to engage with and promote effective innovation in the organizations they lead. I was pleased to have the opportunity to take these ideas to a broader audience of senior company directors in this dynamic economy.
The key issue for company directors is balancing their fiduciary responsibilities to manage the risk of organizations with the imperative of innovation. Organizations that do not change in a rapidly shifting world will inevitably be left behind.
I would argue that it is not just a question of “balance”, but one of actively integrating innovation and governance, in that understanding that NOT innovating effectively – which requires actively moving into uncertainty – is often the greatest risk.
For many years I have developed and evangelized the concept of “governance for transformation”, which focuses as much on enabling innovation and useful risk-taking as managing and mitigating risk, where governance is an enabler of organizational transformation rather than blocking it.
Of course it is not the role of directors alone. The CEO and executive team need to set innovation strategy and drive innovation across the firm. However I see 7 key roles of company directors in driving innovative organizations. This is supported by establishing the fundamental structures and elements of effective innovation governance.
It is a core responsibility of company directors to drive innovation and organizational change in a rapidly shifting world, in full alignment with their responsibilities for governance. These responsibilities are effectively the same.
We are seeing a new breed of directors that recognize this and put this into practice in their roles. The organizations they lead are likely to be the ones that excel in the exceptionally fast-moving years ahead.
Image: Martin Snicer Photography