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‘New world, new corporate boards’ – Minister

by Marlon Madden
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Senator Kay McConney

The role of boards of companies needs to change, Minister of Innovation, Science and Smart Technology Senator Kay McConney has suggested, owing to rapid technological advancements.

Arguing that customer expectations are shifting and a sweeping technological transformation is underway, there was a power shift in the relationship between corporations and individuals on the ownership of data.

Boards of companies needed to bring “fresh perspectives with the foresight, the insight and the oversight” to businesses, Senator McConney suggested, warning that companies and industries now considered giants could become “casualties”.

“The role of the board at this time must change,” Senator McConney declared as she addressed the opening of the BSE’s 7th annual Corporate Governance and Accountability Conference at the Hilton Resort.

She said for companies to thrive “in this fast disruptive climate” it will require the profile of board members to “reflect what the company values”.

She warned that it would require “collaboration, diversity of perspective, including gender, proactive thinking, creativity and innovation”.

The Minister for technology said: “It will also take board members getting out of the board rooms and connecting directly with the customers, management, investors and partners and other stakeholders to understand the environment and their expectations first-hand.”

The Government senator, who declared she was speaking on behalf of Prime Minister Mia Mottley, said that like climate change, the digital age has ushered in a business climate change.

She described this change as one in which the pace of technological change was faster and disruption was more widespread, adding that “the opportunity for mass collaboration to alter the fortunes of businesses, large and small, has never been more right”.

She explained: “Corporate boards are now straddling. You are straddling the reality of disruption on one side and the need for certainty and predictability on the other side.

“Disruption, where speed, creativity and change are at the forefront of innovation and predictability and certainty where regulations, controls and standards must anchor compliance and good business practice.”

Senator McConney said besides the change in customer expectations there were changes in the regulatory environment, which she said was impacting relationships and rules of engagement with international partners and governments.

“Because we do not live in a world of our own we have to care about these relationships,” she cautioned.

On top of that, she stated that the media, shareholders, investors and residents were watching “with an eye on companies’ environment, sustainability and governance”, which she said was increasingly being factored into investment decisions to “bring transparency and accountability of performance indicators of companies to the fore”.

“It means having to transform under increased scrutiny, which from a government’s perspective is a good thing because that is in the public’s interest,” she said.

Insisting that in the digital age, security becomes paramount, Senator McConney gave the assurance that the Mottley administration was doing all it could to ensure the data of individuals were protected by law.

She also suggested it was important that companies consider “data governance” in their corporate governance practices so as to minimize risk, reduce cost to ensure compliance, and to increase the value of data as an asset.

Calling on companies to “value people as much as profit”, the minister added that the risk of not caring about the “expanded role” of data protection and security was “too high”.

“You could lose not just your profits, but your companies. You should care because what it will save you by taking the necessary steps is far more than what it will cost you,” she warned.

Senator McConney said that besides reputational and financial risks, there were also infrastructural and other risks that could have implications for shareholders and clients.

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