Connecting Key Decisions to Strategy and Purpose

Day three of the NACD Directors Summit 2024 highlighted the board’s vital role in in aligning short-term decisions with long-term strategy and purpose to drive sustained success and organizational resilience.

Leading organizational transformation, developing effective succession plans, building digital resilience, and fostering inclusive leadership are all vital to a company’s success. Aligning these activities with the company’s long-term strategy is a critical responsibility of the board. Numerous sessions on the third day of the NACD Directors Summit™ 2024 focused on this topic.

The premier annual conference, which brings the governance elite together to shape the future of boardrooms, is being held at the Gaylord National Resort & Convention Center in the Washington, DC, area through Oct. 9, 2024. Attendees had the opportunity to participate in tailored learning tracks on critical governance issues and join different networking events. Learn more.

Keynote speakers on Oct. 8 included Clare Martorana, federal chief information officer of the Office of Management and Budget; Maggie Wilderotter, interim CEO and chair of DocuSign, and a director on the boards of public and private companies; James P. Gorman, executive chair of Morgan Stanley; George Kurtz, CEO and founder of CrowdStrike; Dominique Shelton Leipzig, a renowned expert in data privacy, artificial intelligence, and cybersecurity; and Tarang Amin, chairman and CEO of e.l.f. Beauty.

Here are key takeaways from some sessions.

Technology is the foundation of everything we do. As artificial intelligence (AI) and other emerging technologies, like quantum computing, continue to evolve rapidly, Martorana highlighted that AI is poised to fundamentally transform how organizations and the government function. The learning curve for AI is steep. To stay ahead, businesses should leverage federal guidance, such as President Biden’s Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, to establish a governance framework for these innovations within companies. AI development and implementation needs to be a public-private partnership, and companies must gain public trust through transparency when implementing AI frameworks and principles.

Communication is key—really. To succeed as a CEO, Wilderotter shared that she made it a priority to stay connected with employees who did not directly report to her. “We have to think through their perspectives,” she said, emphasizing that leaders are “standing on the shoulders of their people.” Wilderotter conducted “lion hunts,” spending two hours every Friday speaking with employees and discussing with management the issues employees raised. This practice led management to adopt these “lion hunts” as well, resulting in a 360-degree transformation in how people communicated across the organization.

The ideal CEO successor must strike a balance between self-interest and commitment to the organization. CEOs should have just enough ego, drive, and resilience to take calculated risks, paired with a commitment to the organization; too much of the former can lead to decision-making that negatively impacts the company, while too much of the latter can create a vacuum when the CEO leaves, Gorman said. Good CEO candidates should approach opportunities with a mind-set of being “capable” of the role instead of “wanting” the role. Boards should consider candidates' strengths alongside their imperfections. “We’re all incomplete,” Gorman said, emphasizing that while we may have exceptional qualities, most of us are not exceptional. Boards should prioritize preparing CEO candidates for success rather than striving for an ideal.

AI legal precedents emphasize human control over AI. About 100 countries across 6 continents around the world have drafted AI legislation, Leipzig said. These drafts include 17 prohibited AI use cases, such as social scoring systems that classify individuals as “good” or “bad” based on their social behaviors or personal characteristics. In addition, there are 141 high-risk AI use cases, which boards should prioritize. While concerns exist about AI's potential to reshape society, boards play a crucial role in ensuring proper oversight, emphasizing that AI must protect and empower humans as its adoption grows.

Democratizing access strengthens business resilience. Companies should represent the diverse communities they serve, both in their workforce and boardrooms. The business case for inclusion is compelling, Amin said. Aligning the organization’s vision and mission with the values of all stakeholders, especially consumers and employees, enhances engagement and performance.