The Consequences of Information Disengagement
The consequences of the information paradox are clear. Advancement and integration in social media and communications platforms has made it easy for information, misinformation, and negative coverage to spread. This has exposed companies to an increased level of risk and has made those risks significantly harder to manage. The influence of information disengagement has also made them less equipped to take early advantage of market shifts and opportunities.
It has become increasingly common for companies to find themselves in a position to take reactive—rather than proactive—measures when evading risks and pursuing opportunities. The pressure often falls on the general counsel (GC) and corporate secretary (CoSec) to prevent incomplete oversight and ill-informed decision-making.
The Rise of Governance IntelligenceGovernance intelligence arose as a structured means of combating the information paradox. The term "governance intelligence" simply describes the streamlined distillation of content—news coverage and industry metrics—into insights which inform a board's decision-making. Governance intel serves as a framework for leveraging market and competitive intelligence in the boardroom. It provides a methodology for breaking free from the constraints of "analysis paralysis" and gaining a competitive advantage in today's fast-moving information environment.
Contextualizing Information DisengagementThere are three universal truths in governance intelligence. These truths give context to the struggle board members face in fighting the effects of information disengagement. It doesn't hurt to keep these tenants in mind when formulating strategies for better boardroom decision-making.
1. "Big Data" Does Not Always Mean "Useful" DataBig data" can be little more than a buzzword and a burden to those without the means to make sense of a mountain of information. It's is a double-edged sword. Decision-makers are effectively tasked with finding needles in haystacks. A larger haystack might yield more needles, but it can also drastically increase the time it takes to find them all. In this way, access to "big data" does not necessarily give you access to "useful" data. Of course, well-designed intelligence software can be a metaphorical "metal detector" when searching for "needles" in a "haystack" of data.
2. Raw Data Means Nothing Until Insights Are ArticulatedRaw data is only the beginning. Information used in governance intelligence has little value if it's not used to articulate actionable insights aimed at achieving one of three objectives:
- Identify unforeseen risks,
- Highlight unclaimed opportunities, or
- Present board members with a course of action.
3. Insights Are Worthless if They're Ignored
If a tree falls in a forest and no one's around to hear it, does it make a sound? If a director has the intel they need to make informed decisions but never uses it, what's the point of giving it to them in the first place? Board members want to see insights first, information second. This falls in line with a core mantra of governance intelligence: "read less, learn more".
These universal truths provide a frame of reference for the challenge boards face in fighting the information paradox. This is to say nothing of the time constraints directors face in tackling these obstacles. Information to must be curated for quality, filtered for relevance, synthesized for insights, and acted upon; all while competitors are still lacing up their proverbial boots.
Combating the Information Paradox
Putting governance intel into practice in fending off the malaise of analysis paralysis means implementing efficient methods of distributing information. The most straightforward method for disseminating governance intelligence often comes in the form of an email newsletter or downloadable brief. Regardless of the medium by which intel is distributed, your goal is always to build towards and support an actionable insight. The intel you present must tell a story (with "insights" serving as the "moral of the story").
The information you present to board members must also be worthwhile. If the content and metrics shared confirm what the board already knows, then it's not worth sharing in the first place. When building a case around specific insights or courses of action, it helps to think persuasively. There are three layers to a persuasive argument:
- Assertion: the insight or course of action you support.
- Evidence: supporting your claim to pursue a given course of action.
- Commentary: closing your "argument" by tying evidence into your assertion, restating the perceived benefits of taking action and the consequences of inaction.
- Passive collection describes the process of gathering intel without an intended target. Your objective is to passively monitor the latest market or industry developments (making sure nothing important falls through the cracks).
- Active collection describes the gathering of intel ahead of or following board, committee, and executive meetings. The intel almost always relates to a specific agenda item or topic of conversation and is often delegated to proactive GCs, corporate secretaries, and executive assistants.
Ensuring board members have access to intel necessary for making informed decisions at the earliest possible opportunity is an effective way to keep directors engaged. Always assume industry competitors are keeping pace with (if not two steps ahead of) your efforts.
Getting ahead of the curve doesn't mean reinventing the wheel. Establishing narrowly-targeted news alerts, filtering out providers of low-quality or derivative content, and implementing email alerts or mobile notifications is a great first step in ensuring your directors aren't left in the dust.
This has been merely a brief glimpse into the complex web of challenges the information paradox poses to today's decision-makers. Making a commitment to champion modern governance in your boardroom and adhere to the best practices of governance intelligence gives directors a fighting chance at cutting through the noise to make effective, well-informed decisions.
To learn more about the role of governance intelligence in combating the effects of information disengagement, visit Diligent Insights.