Unlocking the Potential of Singapore Boardrooms

In today’s dynamic and complex business landscape, a board’s effectiveness is greatly influenced by the diversity of its members and their collective ability to critically evaluate decisions, opportunities, and challenges.

Recognizing the importance of this, director succession and board renewal have become increasingly critical in ensuring the optimal composition of boards. Consequently, the traditional reliance on personal networks for board appointments is gradually giving way to a more systematic approach. In tandem, high performing boards are also becoming more open to taking a critical, outside-in view of their make-up and performance, as they look to future challenges that may need to be faced.  Firms like Russell Reynolds Associates are taking center stage in conducting board searches, successions, and evaluations to help support and drive boardroom performance.

To examine board renewal trends and deliberate what makes a high performing board, Russell Reynolds consultants Anupama Puranik and Euan Kenworthy held a closed-door roundtable with a small group of experienced independent directors and senior executives from the Singapore Chapter of INSEAD’s Director Network. The session was moderated by RRA’s Alvin Chiang, and yielded the following takeaways at the end of a lively discussion:

Diversity matters

There is a growing emphasis on diversity, not just in terms of gender representation, but also in terms of backgrounds and perspectives. Initiatives around topics like gender diversity include longlists of board candidates that showcase equal gender representation and increasing openness to first-time women board members to expand the talent pool.

Diversity is also achieved by seeking international representation on the board. However, this definition can vary amongst boards. For example, “Asian” representation may mean prioritizing candidates with extensive experience of living and working in Asia, versus having Asian heritage only.

In identifying board candidates, the traditional focus on hard skills is also undergoing a significant shift. Boards are increasingly acknowledging the need for expertise in diverse and specialized areas, such as HR, technology, innovation, sustainability or DE&I (diversity, equity and inclusion). Moreover, boards are placing increased importance on behavior and soft skills. This shift recognizes that effective board dynamics and decision-making are influenced not only by technical competence, but also by qualities such as emotional intelligence, communication, collaboration, and ethical leadership. Boards are seeking individuals who can contribute to a high performing board culture, engage in constructive dialogue, positively debate key issues in an honest, transparent manner and navigate complex interpersonal dynamics.

As the board’s role grows increasingly complex—especially around governance and risk management—the ability to avoid the ‘group think’ trap and foster an environment that encourages robust debates and discussions have become more critical than ever. Ensuring that prospective board members align with the organization's values and vision is crucial to maintaining harmony within the board and facilitating effective decision-making. However, high performing boards also need individuals who will speak up and critically analyze issues.

When selecting new members, boards also prioritize two key factors: culture fit and reputation. Boards are more carefully evaluating the reputation and track record of external candidates, as their past experiences and achievements can serve as indicators of their potential contributions to the board. Simultaneously, boards are increasingly aware of the need to diversify their own ranks. This recognition stems from the realization that a diverse board can bring fresh perspectives, innovative ideas, and a wider range of experiences to the table. To achieve this, boards are inclining to cast a wider net, actively seeking out candidates beyond their immediate networks or traditional pools. By doing so, they can tap into a wealth of talent and expertise that may have previously been overlooked. However,  the chair and/or a senior director must be prepared to mentor and help develop new or less experienced directors, giving them the confidence to speak up and bring all their experience and judgement to bear.

Being future-ready

Today’s market environment is rapidly evolving, so it is imperative for boards to be future-ready and forward-thinking. This involves asking the right questions, understanding the ever-changing global landscape and staying current on emerging trends and technologies. To foster a culture of innovation and exploration, some boards establish dedicated innovation committees. These committees serve as platforms for board members to delve into new ideas, evaluate emerging strategies, and drive the organization's ability to adapt and thrive in a competitive environment.

Being future-ready also means identifying where the current gaps are in the board. Board evaluations play a crucial role in assessing board effectiveness and identifying areas for improvement. Evaluations can help identify gaps in skills and knowledge, promote diversity, and ensure boards are equipped to navigate future challenges. High performing boards are willing to put themselves under the microscope and receive constructive feedback as to where and how they need to evolve to prepare for a future ready organization.

Governance expectations are changing

As the board landscape undergoes a shift from conformance to performance, it is crucial to maintain a good balance between the two. Board governance and compliance play a pivotal role in ensuring this equilibrium, particularly in times of challenge and uncertainty. Today’s boards face increased responsibility and liability, and hence the need for robust governance structures to protect shareholder interests. The evolving nature of board responsibilities has resulted in a higher demand on directors' time and an intensified workload. This increased workload and responsibility can deter potential directors, especially when it comes to public boards. The commitment required to fulfill these roles may be perceived as a challenge, and individuals may hesitate to take on such positions. To attract the best directors, chairs and NomCos need to be aware of such issues and willing to discuss them transparently.

The importance of an effective board cannot be overstated in today’s complex business landscape, yet building a forward-thinking board presents its own set of challenges. By embracing diversity, being future-ready, and adapting to changing governance expectations, organizations can ensure their boards are well-equipped to navigate the complexities of tomorrow to drive sustainable success.

Authors

Euan Kenworthy is a member of Russell Reynolds Associates’ Board & CEO Advisory Partners and the Industrial & Natural Resources sector. He is based in Singapore.
Anupama Puranik is a member of Russell Reynolds Associates’ Board & CEO Advisory Partners and the  Healthcare Practice. She is based in Singapore.
Laura Syn leads Russell Reynolds Associates’ Knowledge Team in Asia Pacific. She is based in Hong Kong.

Acknowledgements

Alvin Chiang is a member of Russell Reynolds Associates’ Board & CEO Advisory Partners. He is based in Singapore.