2020 Vision

  • Date:01 Dec 2007
  • Type:CompanyDirectorMagazine
Is this as good as it gets? AICD CEO Ralph Evans believes that life will not get any easier for directors by 2020.

It’s a director’s life

“Prediction is very difficult, especially about the future”. These sound like words from Mark Twain, but in fact they come from the great Danish physicist Neils Bohr.

When asked to consider what directorship will be like in 2020, I can’t help thinking of those futurist pictures from the 1920s that show biplanes weaving among skyscrapers, which all look like the Chrysler Building. The future didn’t turn out that way, but that’s how it looked back then – and of course the dark times of 1939-45 were not part of optimistic imaginings.

I had a similar sense last year at a small dinner with my old friend and one-time colleague Paul Twomey and his chairman, Vint Cerf. They run the Internet, to the extent that anyone does, through ICANN, the Internet Corporation for the Allocation of Names and Numbers. Twomey is the first non-American to head this global body, and Cerf was one of the true Internet pioneers.

They described an ICANN board meeting, which of course takes place on the Net.

Board members attend from their home bases around the world, including one in Senegal and I think one in Bulgaria as well as others in the US, Western Europe and Japan. They are in voice contact, and each has two large screens. One shows the directors’ faces or the agenda and the other, the pages relating to the current matter under discussion. Board members chatter with each other all the time via Instant Messaging, sometimes with several small boxes open on their screens at a time. These carry private messages from director A to director B such as “When will she come to the point?”. The meeting is open for anyone in the world to listen in to, provided they can find the URLs, and minutes are available as soon as the meeting finishes.

Will corporate boards be like this in 2020? I don’t think so. I rather think this sort of thing will look as quaint then as those scenes of biplanes among the skyscrapers do now.

I doubt that face-to-face meetings will disappear, because our species is so well adapted to them. Video conferencing may become less clunky and replace some physical meetings, but I expect these still to be central to the board experience.

Companies will have become much more global, with the result that boards will need foreign directors. Face-to-face meetings will be all the more important for full and effective communication to be possible. Travel will still be subsonic and time-zones will still exist, so expect board meetings to be fewer in number and longer in length – four or even three each year of three days or more each would not surprise me.

Another reason for longer meetings is that board process is becoming ever more complicated and more specified by regulation. Committee time on audit, risk management, remuneration or the environment will more than double the time required of directors. Large shareholders will want their own briefings, requiring still more time.

I expect directors of large companies (and the big end will be much bigger than now) to need staff, possibly assistants of their own, to help them cope with the detail, the legal exposures and the diary issues.

The life of a director will not be easy. Analysts and governance advisers will scrutinise their work intently. Electronic media (rather than newspapers) will spread news, especially bad news, like wildfire. Plaintiff lawyers will lurk about with class actions aplenty, vultures waiting for carrion to swoop upon.

To me, the big question is whether directors in 2020 will have the time for calm reflection that they need to get a firm grip on where the company is going and whether the management is right – in other words, to direct. I fear that they could become like the operators of nuclear power stations: intensely regulated monitors of a vast apparatus with very little freedom to take any initiative at all.