A former Director General at the European Investment Bank (EIB), and Transpire Global Director Member Cheryl Fisher shares her perspective on governance, how risk has evolved and the importance of putting people first.
What does governance mean to you?
Boards and our current approach to governance have been designed as a way to manage risk – especially financial and compliance ones. However, the nature of risk has evolved significantly in an era of social media, geopolitical uncertainty and fast environmental changes.
Society, and customers, have been expecting more from business, which has led to a more holistic interpretation of the role of Boards, from representing shareholders, to considering the interests of a larger and more diverse group of stakeholders.
The challenge for commercial organizations is to strike the right balance between managing their impact as a company, ensuring it stays true to its mission, and maintaining profitability. Some tradeoffs are not easy, and having a diverse Board that can bring about a diverse set of perspectives is key.
In this context, what motivates you to be a non-executive Director?
Well-functioning executive teams collaborate closely; however, each individual has a clearly defined set of responsibilities. By contrast, Boards are expected to take a collegial approach. I think of this as a compromise, rather than consensus – diversity of opinions is still important. But it also requires for non-executives to be able to have a holistic understanding of what’s going on, in the company and in the broader market. I find that incredibly motivating.
I also see a great opportunity for medium and long-term impact, by staying one step away from daily operations, but shaping the thinking of the company.
Good NEDs bring a predictable approach, showing understanding and focus, and setting boundaries and clear priorities, that will allow an organization to thrive in alignment with its own values and mission. And through collaboration and openness, they can prepare it to thrive even in a context of rapid change. In this way, the opportunity for impact is fantastic.
You mentioned change several times. How are Boards changing, in your view?
I believe there’s an increased need for true diversity – not just gender, but also background, age, way of thinking. Every NED should make sure their Boards really have the right skills needed, including a sufficient understanding of ESG, technology, and people management. This also makes the role of the Chair particularly important, because managing that diversity while maintaining emotional safety is critical.
I also expect to see more emphasis on succession planning, at all levels, as the talent market tightens. And more attention to non-financial events and risks, how organizations are coming across outside of their quarterly reports. Whether key leaders are leaving, for example, and how they are perceived in their supply chain.
Overall, there is a need for strong organizational cultures and values, and the ability to be bold – to look beyond the obvious and compliance, and look at how organizations will continue to be successful and meaningful into the future.
