Boards are accountable for the long-term success of the company; few companies will succeed in the long-term without innovation.
Fidelio’s Board Evaluation and Search assignments, as well as our primary research, indicate that Boards are aware of the primacy of innovation, but struggle to embed it and are frequently unclear of what role the Board should play.
While most innovation takes place at Executive level, the Board clearly has a contribution which is often poorly understood. Indeed, risk aversion in the Board room is easily confused with good governance; to the contrary, risk aversion is anathema to innovation.
Given the importance of innovation for our companies and economy, Fidelio was keen to explore the enablers and drivers with an Executive who brought first-hand experience and track record. Xavier Rolet is currently CEO of credit-focused asset manager CQS, and from 2009 to 2017 was CEO of the London Stock Exchange (LSE), a business he transformed during his tenure.
During the course of a Fidelio Board breakfast, Xavier demystified innovation, and provided practical insights into managing a process which can only ever start with the customer. These insights included a checklist for Board Members keen to add value and promote innovation. This may be summarised as:
- Meet with customers
- Be alert to relevant trends
- Take a shareholder perspective
- Be open to new compensation models
- Embrace diversity of thinking
Boards which are open to innovation are also willing to move beyond their comfort zone. To learn more about innovation, how it can be embedded and the Board culture required to support it, please click here.